November 14, 2017

Not intended for U.S. and UK Media

Bayer and Loxo Oncology to develop and commercialize two novel oncology therapies selectively targeting genetic drivers of cancer

Larotrectinib (LOXO-101) and LOXO-195 target tropomyosin receptor kinase (TRK) fusion proteins, which are a product of genetic alterations that occur across a range of different tumors / Co-Promotion of the products in the U.S. / Bayer solely responsible for the commercialization of both products outside the U.S. / U.S. filing of larotrectinib planned for late 2017 or early 2018
Berlin, November 14, 2017 - Bayer today announced that the company has entered
into an exclusive global collaboration with Loxo Oncology, Inc., a
biopharmaceutical company based in Stamford, Connecticut, US, (NASDAQ: LOXO)
for the development and commercialization of larotrectinib (LOXO-101) and
LOXO-195. Both compounds are being investigated in global studies for the
treatment of patients with cancers harboring tropomyosin receptor kinase (TRK)
gene fusions, which are genetic alterations across a wide range of tumors
resulting in uncontrolled TRK signaling and tumor growth.

"The collaboration with Loxo Oncology represents another milestone in our
endeavor to strengthen our oncology presence and underlines our commitment to
this therapeutic area", said Dieter Weinand, Member of the Board of Management
of Bayer AG and President of the Pharmaceuticals Division. "Loxo Oncology's
very innovative approach complements Bayer's oncology pipeline with highly
differentiated compounds across different treatment modalities, which are being
developed to make a meaningful difference for patients suffering from various
types of cancer."

Larotrectinib is an oral, potent and highly selective TRK inhibitor. LOXO-195
is a next-generation, selective TRK inhibitor capable of addressing potential
mechanisms of acquired resistance that may emerge in patients receiving
larotrectinib or multikinase inhibitors with anti-TRK activity. Larotrectinib
is currently the only selective TRK inhibitor in clinical development with the
comprised clinical data set showing clinically meaningful and durable responses
with an overall response rate of 75 percent, confirmed by an independent review
committee, regardless of tumor type and age. The first filing for larotrectinib
is planned in the U.S. in late 2017 or early 2018, with the EU filing expected
in 2018.

"We see great potential in larotrectinib and moreover the follow-on compound
LOXO-195 which has the potential to provide additional benefit for patients who
might progress on an initial TRK inhibition therapy. These agents have the
potential to fullfil the promise of precision medicine, where tumor genetics
rather than tumor site of origin define the treatment approach for patients",
said Robert LaCaze, Executive Vice President and Head of the Oncology Strategic
Business Unit at Bayer.

"This is a transformational collaboration for the company as we prepare for
commercialization," said Jacob Van Naarden, chief business officer of Loxo
Oncology. "Bayer has a history of successful co-promotion efforts with emerging
biopharmaceutical companies and we are confident that their oncology team has
the global reach and expertise, including an existing field force dedicated to
cancer, to complement our existing commercial plans. We look forward to working
with Bayer and believe that together we can bring our TRK inhibitors to more
patients more quickly."

Under the terms of the agreement, Loxo Oncology will receive an upfront payment
of USD 400 million and is eligible for USD 450 million in milestone payments
upon larotrectinib regulatory approvals and first commercial sale events in
certain major markets and an additional USD 200 million in milestone payments
upon LOXO-195 regulatory approvals and first commercial sale events in certain
major markets. Bayer and Loxo Oncology will jointly develop the two products,
larotrectinib and LOXO-195, and share development costs on a 50/50 basis. Bayer
will lead ex-U.S. regulatory activities, and worldwide commercial activities.
In the U.S., where Bayer and Loxo Oncology will co-promote the products, the
parties will share commercial costs and profits on a 50/50 basis. Loxo Oncology
will remain responsible for the filing in the U.S. Bayer will pay Loxo Oncology
tiered double-digit percentage royalties on future net sales outside of the
U.S. and U.S. and ex-U.S. sales milestones totaling USD 500 million.

About Larotrectinib (LOXO-101) and LOXO-195

Larotrectinib (LOXO-101) is a potent, oral and selective investigational new
drug in clinical development for the treatment of patients across a wide range
of cancers that harbor abnormalities involving the tropomyosin receptor kinases
(TRKs). Growing research suggests that the NTRK genes, which encode for TRKs,
can become abnormally fused to other genes, resulting in growth signals that
can lead to cancer in many sites of the body.

In an analysis of 55 RECIST-evaluable TRK fusion adult and pediatric patients,
larotrectinib demonstrated a 75 percent independently-reviewed confirmed
overall response rate (ORR) and an 80 percent investigator-assessed confirmed
ORR, across many different types of solid tumors. Larotrectinib received orphan
drug designation in the US for the treatment of solid tumors harboring
NTRK-fusion proteins and in Europe for soft tissue sarcoma. Additionally, the
FDA granted breakthrough therapy designation to larotrectinib for the treatment
of unresectable or metastatic solid tumors with NTRK-fusion proteins in adult
and pediatric patients who require systemic therapy and who have either
progressed following prior treatment or who have no acceptable alternative
treatments.

LOXO-195 is a potent, oral and selective investigational new drug in clinical
development for the treatment of patients with cancers that have acquired
resistance to initial TRK therapy such as larotrectinib. Though drugs such as
larotrectinib can induce durable responses in these patients, the cancer may
eventually begin to grow again. This phenomenon is called "acquired
resistance," in that the cancer has acquired features conferring resistance to
the initial therapy that was once effective. Emerging data in the field of TRK
inhibition suggest that acquired resistance may emerge due to TRK kinase point
mutations. LOXO-195 was designed to address these new point mutations and
induce a new response in the patient's cancer. In July 2017, a multi-center
Phase I/II trial in patients with TRK fusion cancers who have progressed while
receiving another TRK inhibitor or are intolerant to another TRK inhibitor was
initiated.

For additional information about the larotrectinib or LOXO-195 clinical trials,
please refer to www.clinicaltrials.gov or visit www.loxooncologytrials.com.
Neither larotrectinib nor LOXO-195 are approved by the U.S. Food and Drug
Administration, the European Medicines Agency or any other health authority.

About TRK Fusion Cancer

TRK fusions are chromosomal abnormalities that occur when one of the NTRK genes
(NTRK1, NTRK2, NTRK3) becomes abnormally connected to another, unrelated gene
(e.g. ETV6, LMNA, TPM3). This abnormality results in uncontrolled TRK signaling
that can lead to cancer. TRK fusions occur rarely but broadly in various adult
and pediatric solid tumors, including appendiceal cancer, breast cancer,
cholangiocarcinoma, colorectal cancer, GIST, infantile fibrosarcoma, lung
cancer, mammary analogue secretory carcinoma of the salivary gland, melanoma,
pancreatic cancer, thyroid cancer, and various sarcomas. TRK fusions can be
identified through various diagnostic tests, including targeted next-generation
sequencing (NGS), immunohistochemistry (IHC), polymerase chain reaction (PCR),
and fluorescent in situ hybridization (FISH). For more information, please
visit www.TRKtesting.com.

Cancers Harboring Genetic Alterations
Scientists have long been working to better understand how a normal cell
becomes a cancer cell to deliver better therapies with fewer side effects. Some
people develop cancers that are caused by a single inappropriate DNA change,
known as "oncogenic drivers." When a genetic test identifies a patient with an
oncogenic driver, there is the potential for use of highly selective drugs that
inhibit oncogenic drivers in cancer. While there has been made notable progress
in improving outcomes for people living with cancer over the last several
decades, there has been a growing interest in developing highly targeted
medicines to treat cancer, to further maximize the patients' clinical benefit.
This development is supported by the increasing use of genetic testing in
cancer clinical medicine and improving chemistry approaches to building highly
selective inhibitors against single targets in the cancer cell.

About Oncology at Bayer

Bayer is committed to delivering science for a better life by advancing a
portfolio of innovative treatments. The oncology franchise at Bayer includes
four marketed products and several other compounds in various stages of
clinical development. Together, these products reflect the company's approach
to research, which prioritizes targets and pathways with the potential to
impact the way that cancer is treated.

About Loxo Oncology

Loxo Oncology is a biopharmaceutical company innovating the development of
highly selective medicines for patients with genetically defined cancers. Our
pipeline focuses on cancers that are uniquely dependent on single gene
abnormalities, such that a single drug has the potential to treat the cancer
with dramatic effect. We believe that the most selective, purpose-built
medicines have the highest probability of maximally inhibiting the intended
target, thereby delivering best-in-class disease control and safety. Our
management team seeks out experienced industry partners, world-class scientific
advisors and innovative clinical-regulatory approaches to deliver new cancer
therapies to patients as quickly and efficiently as possible. For more
information, please visit the company's website at www.loxooncology.com.

Bayer: Science For A Better Life
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 2016, the Group
employed around 99,600 people and had sales of EUR 34.9 billion. Capital
expenditures amounted to EUR 2.2 billion, R&D expenses to EUR 4.4 billion. For
more information, go to www.bayer.com.

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