Market Overview

LEO Pharma to Expand Its Lead in Medical Dermatology with Acquisition of Bayer's Prescription Dermatology Unit

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Significant step to bolster LEO Pharma's role as a leading global
dermatology company with its goal of helping 125 million patients by 2025

LEO Pharma and Bayer announced today, that LEO Pharma has entered into a
definitive agreement to buy Bayer's global prescription dermatology
unit. The portfolio to be acquired includes branded topical prescription
treatments for acne, fungal skin infections and rosacea, and a range of
topical steroids with an annual turnover in 2017 of more than 280
million euros. It will enable LEO Pharma to expand significantly in key
markets worldwide and broaden its therapeutic areas.

Bayer's global medical dermatology portfolio, which includes
prescription treatment solutions for acne (Skinoren®), fungal skin
infections (Travogen® and Travocort® ) and rosacea (Finacea®), and a
range of topical steroids (Advantan®, Nerisona®, and Desonate®), will
add complementary treatment areas and strengthen the existing business
of LEO Pharma worldwide, allowing the company to more than double sales
in some markets. The transaction does not include Bayer's
over-the-counter dermatology portfolio of brands such as Bepanthen® and
Canesten® amongst others.

"We are very excited about this agreement. With the strong prescription
dermatology brands and the new colleagues from Bayer, LEO Pharma
advances significantly towards our goal of helping 125 million patients
by 2025. We will broaden our treatment range and considerably enhance
our size in key markets around the world – underlining our ambition to
be a preferred partner in medical dermatology," said Gitte P. Aabo,
President and CEO of LEO Pharma.

"We are very pleased to have found a good partner in LEO Pharma, who has
a long history as a leader in scientific advancement and a culture that
values discovery and innovation," said Heiko Schipper, member of Bayer's
Board of Management and President of Consumer Health. "With the
dedicated support of many employees to whom we are grateful, our
prescription dermatology business has grown well since becoming part of
Bayer in 2006. Moving forward, we believe that LEO Pharma is the right
owner to grow and further develop the prescription dermatology business
while enabling us to focus on building our core over-the counter brands".

LEO Pharma will acquire the global product rights, except for
Afghanistan and Pakistan, and take over the sales and marketing
organisations in 14 countries, as well as a factory in Segrate, Italy.
In total, around 450 people will join LEO Pharma as part of this
transaction. The combination of the local sales and marketing
organizations will make LEO Pharma more efficient.

The acquisition is expected to close in two steps: During 2018 for the
United States, and during the second half of 2019 for all other markets,
subject to the satisfaction of customary closing conditions, including
approval by the competition authorities. Financial details of the
transaction were not disclosed.

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About LEO Pharma
LEO Pharma helps people achieve healthy
skin. By offering care solutions to patients in more than 130 countries
globally, LEO Pharma supports people in managing their skin conditions.
Founded in 1908 and owned by the LEO Foundation, the healthcare company
headquartered in Denmark has devoted decades of research and development
to delivering products and solutions to people with skin conditions. In
2017 LEO Pharma employed around 5,200 people worldwide and had sales of
1.4 billion euros. For more information, go to:

www.leo-pharma.com
www.linkedin.com/company/leo-pharma

About Bayer
Bayer is a global enterprise with core
competencies in the life science fields of health care and agriculture.
Its products and services are designed to benefit people and improve
their quality of life. At the same time, the Group aims to create value
through innovation, growth and high earning power. Bayer is committed to
the principles of sustainable development and to its social and ethical
responsibilities as a corporate citizen. In fiscal 2017, the Group
employed around 99,800 people and had sales of 35.0 billion euros.
Capital expenditures amounted to 2.4 billion euros, R&D expenses to 4.5
billion euros. For more information, go to www.bayer.com.

Forward-Looking Statements
This release may contain
forward-looking statements based on current assumptions and forecasts
made by Bayer management. Various known and unknown risks, uncertainties
and other factors could lead to material differences between the actual
future results, financial situation, development or performance of the
company and the estimates given here. These factors include those
discussed in Bayer's public reports which are available on the Bayer
website at www.bayer.com.
The company assumes no liability whatsoever to update these
forward-looking statements or to conform them to future events or
developments.

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