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Bayer ads aim to polish battered image
Saturday, November 27, 2004

Drug and chemical giant Bayer AG -- struggling with problems with the cholesterol-reducing drug Baycol, a price-fixing scandal in its rubber operation and a companywide reorganization that has changed its focus -- is launching a new advertising campaign to polish up its image.

The Leverkusen, Germany-based company already has begun peppering its home country with new print and television ads and plans to target American audiences beginning Monday.

The ads, Bayer's first corporate image campaign in first in four years, feature people who use or benefit from Bayer products and bear the tag line: "Science for a Better Life."

The new campaign will be seen in such financial publications as Business Week magazine, the Financial Times newspaper and on cable television channels such as MSNBC and Fox News.

The campaign is not just aimed at the public, but at shareholders and nearly 114,000 employees worldwide, including about 1,800 locally, said the head of Bayer Corp., which has its U.S. headquarters in Robinson.

"If you talk to people and ask them about Bayer, most will tell you Bayer is a health care or pharma company," said Attila Molnar, president and chief executive officer. "Our other activities are virtually unknown."

Known for more than 100 hundred years as the aspirin company and later as the maker of Alka Seltzer, Bayer wants people to know that it's more than a drug company. It also conducts research and development in material sciences and develops fungicides and herbicides to protect crops.

Molnar said Bayer also has revamped its mission, spending the past year fine-tuning its focus after spinning off its chemicals and polymers business, now called Lanxess, and acquiring Roche Holdings' over-the-counter drug business. In September, it also announced an alliance with Schering-Plough Corp. to market popular drugs such as Cipro and the impotence pill Levitra.

Lanxess, formed in July when Bayer's German parent consolidated its chemicals operations in a separate company that will eventually be spun out as a publicly traded firm, will locate its U.S. headquarters at the RIDC West office park, near Bayer's Robinson complex.

The company also bought out the remaining shares of its partnership with a Middlebury, Conn.-based seed treatment company for $124 million to boost its crop science business.

Since most of Bayer's reorganization is complete and the legal troubles have waned -- it paid $100 million to settle claims that it conspired with other rubber makers to fix prices -- the ads will emphasize the company's retooled R&D focus, Molnar said.

"Some of the messages that we've been getting from the outside aren't what we'd really like to hear. Not only have we changed our product portfolio, but we've redefined what we expect as far as ethics and morals for our employees," he said.

The string of sleek, modern print ads and earthy, music-driven TV spots may highlight a new Bayer, but it's still being hurt by some problems in its not-so-distant past.

In addition to the price-fixing, it continues to be besieged by questions surrounding Baycol, which was pulled from the market in 2001 following concerns that it was more likely than other cholesterol-lowering drugs to cause a rare and sometimes fatal muscular disorder. It has been linked to more than 100 deaths.

Yesterday, the U.S. Food and Drug Administration said it was reviewing a Journal of American Medical Association report that said Bayer officials knew of the problem four months after the drug hit the market in February 1998 and should have notified the public more quickly.

Indeed, there is no guarantee that the new ads will help Bayer redefine its image in the minds of current and future stockholders as well as consumers.

"It can be a tall task," said Michael Brunner, CEO of Blattner Brunner, a local advertising firm. "You're asking the consumer to alter their mental description of what the company stands for."

Perhaps a recent upswing in Bayer's profits could help.

The new ads coincide with a recovery in the chemical industry and a subsequent third-quarter pickup in profits. Bayer on Thursday reported net profits of $45 million, or 5 cents a share, reversing losses a year ago even as sales of its antibiotic Cipro dipped. Sales rose 3.4 percent to $8.78 billion.

Since its patent expired at the end of last year, Cipro has faced steep competition from generic drug makers, causing sales of the drug to plunge 55 percent. Bayer's shares closed yesterday at $31.85, up 65 cents, or 2 percent.

First published on November 27, 2004 at 12:00 am
The Associated Press and Bloomberg News contributed to this report. Corilyn Shropshire can be reached at cshrosphire@post-gazette.com or 412-263-1413.