Bayer, NetraMark, Evotec: How AI Research is accelerating returns and could optimize your portfolio

Bayer – Legal peace in sight? Pharmaceutical pipeline bubbling!

The US Supreme Court has asked the government for an opinion in the Durnell case, a key glyphosate lawsuit involving Bayer's subsidiary Monsanto. At issue is the fundamental primacy of federal law over state lawsuits. This is a question with far-reaching implications for the entire industry. A clear ruling by the highest court, possibly by mid-2026, could significantly reduce the long-standing legal pressure. At the same time, Bayer is pushing ahead with the use of artificial intelligence. In drug discovery, AI is accelerating the discovery of new candidates. In agriculture, an AI advisor provides real-time recommendations for farmers, and in radiology, algorithms optimize diagnostic procedures. This digitalization offensive is designed to increase efficiency and innovation.

The pharmaceutical division delivered a positive surprise with regulatory milestones. The EU expanded the approval for Eylea® 8 mg. This will bring significant relief to people with certain retinal diseases. Thanks to its longer-lasting effect, injections will now only be necessary about every six months. This is a blessing for those affected and also reduces the burden on doctors. Progress was also made with darolutamide (Nubeqa®) for metastatic hormone-sensitive prostate cancer. The European regulatory authority has recommended approval. This is based on a study that demonstrated a 46% reduction in the risk of disease progression or death. This strengthens Nubeqa's position as a key growth driver in Bayer's oncology portfolio.

The US Food and Drug Administration (FDA) has given the green light for finerenone (Kerendia®) for the treatment of a specific form of heart failure. It is the first drug in its class to demonstrate clear cardiovascular benefits, addressing a significant unmet need in millions of patients. Elinzanetant (Lynkuet®) received its first global approval in the UK for the relief of severe hot flashes in menopause. As the first targeted dual neurokinin therapy, it offers a non-hormonal alternative. Applications for both products are pending in other key markets, opening up additional revenue potential. These successes underscore the productivity of Bayer's pharmaceutical research. The stock is currently trading at EUR 27.37.

NetraMark – When AI finally makes clinical trials reliable

Imagine billions being wasted on pharmaceutical trials simply because the wrong patients are enrolled. NetraMark is tackling precisely this problem. Instead of focusing on drug discovery or big data like other AI companies, NetraMark concentrates on a critical leverage point: analysis by trial phase. Its specialized AI sifts through small, limited, and complex clinical data sets to identify hidden patient subgroups that distort results, such as non-responders or those susceptible to placebos. This mathematically sophisticated approach is its unique selling point in a market full of black box solutions.

A recent study from June provided concrete evidence. NetraMark's NetraAI platform was compared with established AI giants like ChatGPT, DeepSeek, and traditional methods using real clinical data (schizophrenia, depression, and cancer). While the competition struggled - generic AI delivered only noise, and standard models produced unclear results - NetraMark's NetraAI identified precise, interpretable patient subgroups and significantly increased prediction accuracy. This demonstrates that their technology, developed specifically for clinical data, delivers where generalist models fail, providing actionable insights for future study design.

The need is enormous. Pharmaceutical research departments spend over USD 240 billion annually, but success rates are low. NetraMark is leveraging strategic alliances to scale its operations. The global partnership with contract research organization giant Worldwide Clinical Trials (WCT) offers WCT customers the opportunity to integrate NetraMark's AI directly into their study workflows, initially in neuroscience and oncology. At the same time, the Company is working with one of the five largest pharmaceutical companies – a strong validation signal. These collaborations pave the way for broad implementation of the technology and leverage its enormous efficiency potential for industry. Since the beginning of the year, the share price has risen by around 75% at its peak and is currently consolidating. The share is currently trading at CAD 1.39.

Evotec - Interim results after strategic realignment

The first quarter at Evotec showed diverging trends. Total revenue decreased by 4% to EUR 200 million, primarily due to weaknesses in the Shared R&D segment, which declined by 9%. This was due to declining orders in the transactional business and lower volumes with major partners. In contrast, the Biologics division performed well. At EUR 59.4 million, it exceeded expectations thanks to new customer contracts and scaled collaborations. The Company is demonstrating cost discipline. R&D expenditure was reduced by a third, which strengthened operating cash flow.

Evotec's focus on core technological competencies is bearing fruit. The partnership with Bristol Myers Squibb in protein degradation highlights the Company's leadership in preclinical research. At the same time, the Company is receiving government funding for antibody therapies for pulmonary fibrosis – a testament to scientific confidence. The biologics unit is benefiting from its platform technology, which attracts both generic and pharmaceutical companies. Evotec also recently joined the NURTuRE-AKI research consortium to develop new kidney therapies using AI-based analytics. Such initiatives strengthen the foundation for long-term partnerships.

Pressure in the shared R&D market remains noticeable, especially for early-stage research services. However, the current industry consolidation presents opportunities. Biotech restructuring could fuel demand for external service providers such as Evotec. Nevertheless, the Company is sticking to its ambitious targets. By 2028, it aims to achieve annual revenue growth of 8-12% and drive its EBITDA margin above 20%. The decisive factor will be whether cost efficiency and technological agility are sufficient to compensate for the weaker segments. For investors, Evotec remains a play on research excellence, with clear strengths, but also risks. The share price is currently EUR 7.294.

The AI-driven transformation of the healthcare industry is evident in many companies. Bayer is demonstrating how a corporation can mobilize its innovative strength despite legal risks with regulatory successes for Eylea®, Nubeqa®, and Kerendia® and AI integration in research, agriculture, and diagnostics. NetraMark is addressing a billion-dollar efficiency problem with its precise AI for identifying biased patient subgroups in clinical trials. This has been validated through partnerships, such as the one with Worldwide Clinical Trials. Evotec is countering market pressure by focusing on profitable biologics growth, cost discipline, and strategic alliances, but remains in a transformation phase.