Bayer saw its fourth quarter net income fall by a third today, and its Frankfurt-listed shares fell more than 4% in mid-morning trading as investors expressed their disappointment with the results.

German chemicals and pharmaceuticals group Bayer has posted a 56% leap in fourth quarter earnings before interest and taxes (EBIT) to 615 million euros, driven by its HealthCare and MaterialScience units.

Sales rose 16% to 7.1 billion euros, but net income fell by a third to 46 million euros, hit by a 322 million-euro antitrust charge associated with its former rubber business. The results disappointed investors, sparking a 4% drop in Bayer’s Frankfurt-listed shares in mid-morning trading today.

The HealthCare unit put in the strongest sales increase, up 24% to 2.55 billion euros, helped by the acquisition of Roche’s over-the-counter business in January 2005, as well as a good performance by erectile dysfunction drug Levitra (vardenafil), Kogenate (recombinant antihemophilic factor) and Trasylol (aprotinin) for preventing blood loss during surgery, which helped offset the continuing effects of patent expiry on Bayer’s big-selling antibiotic Cipro (ciprofloxacin).

Meanwhile, MaterialScience grew 16% to 2.78 billion euros, although CropScience saw a decline of 5% compared to fourth-quarter 2004, at 1.38 billion euros.

Bayer’s chief executive Werner Wenning said in 2006 sales would rise by around 5% and there would be a slight increase in earnings. He reiterated the view that two of Bayer’s new drugs, Nexavar (sorafenib) for non-small cell lung cancer and the oral Factor Xa inhibitor for thrombotic diseases, could both top a billion euros in sales.

For the full-year, sales rose 18% to 27.4 billion euros, while net income jumped 133% to 1.6 billion euros.

More details from Bayer’s annual results conference will be reported tomorrow.