Bayer Healthcare’s head Arthur Higgins has been chosen to take the reigns of newly-created Bayer-Schering Pharma, it was announced yesterday, a day after news that Bayer had successfully taken over fellow German drugmaker Schering AG emerged.

In addition, Bayer’s Chief Executive Werner Wenning will take on the role of Supervisory Board Chairman, while Schering’s Chief Executive Hubertus Erlen will be its Vice Chairman.

Speaking at a press conference called by the companies yesterday morning in Berlin, Wenning said the total cost of the deal is expected to reach just under 16.9 billion euros, up just 2.5% from its bid of 16.5 billion euros. “A transaction of such dimensions and long-term significance for Bayer surely justifies this additional outlay,” he said, and added that improvements in the performance of the combined business will offset the extra expense.

Explaining his support for the marriage, Wenning said the deal adds value to Bayer because: “It enables us to achieve our stated aim of substantially strengthening our healthcare business to make it Bayer’s primary growth engine; with a significantly higher research budget, we can also greatly accelerate growth in our core indications; from the third year after closing we anticipate synergies in the order of 700 million euros annually; Bayer’s earning power will be substantially improved; and it will expand the life-science share of Bayer Group sales from 60% at present to around 70%, thus significantly reducing our dependence on the economic cycle.”

The groups expect oncology to be a key growth engine for the merged portfolio in the future, as the separate businesses fit together very well. Furthermore, as Wenning points out, the enlarged sales and marketing platform will help to boost the success of newly-launched products, such as Bayer’s kidney cancer drug Nexavar (sorafenib), which has been registered in Mexico, Chile and Switzerland and should see a European approval by year end.

Nexavar could be a very bright star in Bayer-Schering Pharma’s universe. It is also being assessed for use in other cancers such as skin, liver and lung, and carries an expected peak sales potential of over 1 billion euros. Other expected key drivers of growth include cardiovascular risk management, with Bayer’s Factor Xa inhibitor for thrombosis, and gynaecology/andrology, which will include Schering’s highly-successful contraceptive franchise Yasmin.

“We are firmly convinced that the combined pipeline of the two companies holds sufficient potential to ensure a sustained innovation boost over the medium to long term,” Wenning remarked. “The challenge we face now is to continue driving these businesses forward with the necessary vigour while, at the same time, successfully completing the integration process.”