Boehringer Ingelheim grows faster than the pharmaceutical market for the tenth time in succession / continued high level of investment in R&D / market launch of five innovative medicines planned
Ingelheim - Boehringer Ingelheim continued to grow in 2009, increasing its net sales by 9.7% to EUR 12.7 billion (2008: EUR 11.6 billion). This was announced today by the company at its Annual Press Conference. Even without taking into account positive currency effects, growth was once again above the average growth for the worldwide pharmaceutical market, at 6.7%. This means that for the tenth consecutive time Boehringer Ingelheim grew faster than the pharmaceutical market and in 2009 was the fastest growing company of the world’s 15 largest pharmaceutical companies.
Operating income, comparable to EBIT, rose to EUR 2.2 billion, despite higher investments planned for research and development.
Professor Andreas Barner, Chairman of the Board of Managing Directors and responsible for the Corporate Board Division Research & Development and Medicine, expressed his satisfaction with the 2009 business year: “In view of the difficult economic environment, we believe that the success of 2009 confirms that our entrepreneurial approach was right. The success of our innovative medicines for patients and our promising research pipeline give us cause to be optimistic about the future.”
Boehringer Ingelheim again invested considerably in its future in 2009, the 125th year in the company’s history. Expenditure for the research and development of new medicines and therapies again increased by more than EUR 100 million to EUR 2.2 billion. The company thus directly reinvested 21% of net sales from the Prescription Medicines business in research and development.
“Five therapeutically promising, innovative medicines from our own pipeline have provided very positive data in clinical studies,” continued Prof. Barner. “These new medicines in indication areas, some of which are new for our company, will offer patients significant therapeutic progress as well as being important for the future of Boehringer Ingelheim, which is now in its 125th year as an independent, family-owned company.”
Financial position – business success and solid funding
As in previous years, high operating cash flow of approximately EUR 2.4 billion (+26%) in 2009 enabled Boehringer Ingelheim to finance its investments in full.
Boehringer Ingelheim again invested the largest portion of the EUR 630 million of investments in tangible assets, primarily in production capacities for new products as well as buildings and technical plants at its research and development sites.
In order to strengthen liquidity and to increase financial and commercial flexibility, Boehringer Ingelheim borrowed a total of EUR 1,300 million in 2009. The main portion resulted from the successful placement of a Schuldscheindarlehen (German private placement) with a volume of EUR 900 million. The funds will secure liquidity and increase the company’s financial and commercial flexibility.
Hubertus von Baumbach, member of the Board of Managing Directors responsible for the Corporate Board Division Finance and Animal Health, commented: “Boehringer Ingelheim is very well-equipped for the coming years, thanks not least to the good product pipeline. We will offset the sales losses that we expect this year in the USA, due to the expiry of patent protection, by growing the existing portfolio and launching new products. The healthcare system changes, in Germany and the USA, for example, will also have an important effect. During the coming years, the economic development, particularly in the emerging markets, will have a considerable influence on our business.”
Innovative preparations drive growth
In its most important and largest business area, Prescription Medicines, Boehringer Ingelheim achieved some 80% of its total net sales in 2009. At more than EUR 10 billion, sales increased by 10.4% on a euro basis. Engelbert Tjeenk Willink, responsible for the Corporate Board Division Pharma Marketing and Sales on the Board of Managing Directors: “This increase is based on the strengths of our strategic core products, in particular SPIRIVA®, ALNA®/FLOMAX®, MICARDIS® and SIFROL®/MIRAPEX®. These medicines alone achieved sales of EUR 6 billion. This corresponds to plus 17.5% within a year.”
Sales of SPIRIVA®, Boehringer Ingelheim’s top medication for the treatment of COPD (chronic obstructive pulmonary disease), increased to EUR 2.4 billion, corresponding to currency-adjusted growth of 14.3%. Measured in euros, growth was actually 16.2%. In its largest sales market alone, the USA, SPIRIVA® generated sales of more than EUR 1 billion for the first time.
ALNA®/FLOMAX®, for treatment of the symptoms of benign prostate hyperplasia, achieved the highest growth of 25.9% currency-adjusted and 31.5% on a euro basis.
MICARDIS®, a hypertension medicine, achieved sales of EUR 1.39 billion and growth of +8.7%, currency-adjusted, and +14.3% on a euro basis. The product has further growth potential, particularly following the results of the ONTARGET® trial with the new approval of MICARDIS® for reducing the risk of heart attack, stroke or death due to cardiovascular diseases.
TWYNSTA®, the fixed combination of the MICARDIS® active ingredient telmisartan with amlodipine, was approved in 2009 in fixed dosage combinations as a single treatment for reducing blood pressure, or as a combination treatment with other blood pressure-reducing active agents. It is already used in the USA in patients who need several active ingredients in order to attain their optimum blood pressure.
SIFROL®/MIRAPEX®, the medicine for treatment of Parkinson’s disease and restless legs syndrome, generated sales of EUR 801 million. This corresponds to year-on-year growth of +3.6%, currency-adjusted, and +6.6% on a euro basis. In 2009, a new formulation as an extended-release tablet was approved for SIFROL®/MIRAPEX® in Europe. This provides extended, steady active ingredient administration and therefore lower fluctuations in the plasma concentration.
PRADAXA®, from our own research and development, is a direct inhibitor of thrombin, a key enzyme of the coagulation cascade. It prevents the formation of blood clots and is already approved for the primary prevention of venous thrombo-embolism following knee and hip replacement surgery.
“This medicine provided groundbreaking results in the RE-LY® clinical study,” reported Engelbert Tjeenk Willink. "For patients and physicians PRADAXA® is a decisive therapeutic innovation. Experts assume that this medication can prevent up to 1 million stroke cases annually”.
Again, growth was borne by all the company’s business regions. The AAA (Asia, Australasia, Africa) region performed particularly well with sales approaching EUR 1.8 billion and growth of 5.6%, currency-adjusted, and 15.2% on a euro basis.
“The fast growing markets such as Brazil, Russia, India and China in particular will offer Boehringer Ingelheim growth options in the future from which we intend to benefit,” commented Mr Tjeenk Willink. “We are further increasing our efforts in these interesting markets.”
The Consumer Health Care (CHC) business area was hit by the consequences of the financial crisis in 2009. Nevertheless, the business at Boehringer Ingelheim grew in this economic environment, with total sales of EUR 1.3 billion. This equates to growth of 2.7%, currency-adjusted and 5.9% on a euro basis.
Mr Tjeenk Willink explained how the CHC business was gaining strategic importance for Boehringer Ingelheim: “The healthcare systems will rely increasingly on over-the-counter medicines and we expect further shifts away from prescription drug business toward self-medication.”
Animal Health – Increased sales through organic growth
Business with Animal Health medications developed very satisfactorily. It increased by 30.6% or 29.4% in local currency terms to a total of EUR 610 million. “This is almost exclusively due to organic growth of our own product portfolio and was not the result of the acquisition of parts of the Fort Dodge business from Pfizer/Wyeth,” stated Hubertus von Baumbach, who is responsible worldwide for Animal Health. “On the contrary, the most important growth driver was our swine vaccine portfolio, including the core product Ingelvac CircoFLEX®.” With EUR 157 million net sales, Ingelvac CircoFLEX® is by far Boehringer Ingelheim’s biggest vaccine and the world’s biggest single vaccine in this market. Nevertheless, established products also made major contributions to this growth.
Biopharmaceuticals and Operations – Technological leader in development and production
Boehringer Ingelheim is also one of the leading companies for biotechnology. Here, as the result of a market-related decline in sales and delays in clinical development at our customers, total sales remained at approximately the previous year’s level of EUR 553 million (-2.9%). Professor Wolfram Carius, responsible for the Corporate Board Division Human Resources and Operations on the Board of Managing Directors, highlighted: “The innovative potential of biotechnological products is and will remain a major driver of medical progress. Particularly in the development of products for our worldwide customers in the pharmaceutical and biotechnological industries, we intend to further expand our services especially our offering for smaller biotechnology companies and in the emerging markets, such as China"
In Operations, the company has significantly increased its facilities to secure the market supply of PRADAXA®, especially in the Pharma Chemicals and Pharmaceuticals Production areas.
Research and Development – guarantor of the future
From Boehringer Ingelheim’s own research and development, the compounds in late development stage in the treatment area of anticoagulation, for treatment of female hypoactive sexual desire disorder, in type 2 diabetes and in oncology in particular again delivered robust data in 2009, with very promising prospects for treatment in clinical trials.
Encouraged by the excellent results from the RELY® study with the new, oral direct thrombin inhibitor, dabigatran etexilate (PRADAXA®), new indications are being developed in addition to prevention of stroke in patients with atrial fibrillation. Boehringer Ingelheim is also driving forward the further development of GIROSA® (flibanserin) for female hypoactive sexual desire disorder.
Two further development substances have also made good progress in clinical development for the treatment of tumours, such as lung cancer, breast cancer, ovarian cancer and cancer of the large intestine. Substance BIBW 2992 is in the late clinical trial phase III and is the first of a new generation of tyrosinkinase inhibitors due to its irreversible binding capacity. BIBF 1120, also in phase III and in the angiokinase inhibitor class, is in a unique position because of its triple inhibitory effect.
The clinical phase III approval studies have also been completed for linagliptin, a substance with the new mode of action inhibiting dipeptidylpeptidase-4.
Human Resources – talent management
Prof. Carius emphasised the particular esteem in which the company holds its 41,534 employees (previous year: 41,300): “Skilled and motivated staff are a vital factor in ensuring our innovative strength and competitiveness. We take active measures to develop our employees’ skills, to challenge and advance them. We want to awake the enthusiasm of talented employees and to keep them in the long term”. For example, the company’s talent management strives towards early recognition of necessary qualifications and requirements for current and future employees and recruiting the best talents for strategically important positions. Prof. Carius: “We are looking for the best employees for one of the best and most innovative pharmaceutical companies.”
Outlook for 2010 – sales at the previous year’s level, increased expenditure for new launches
“In 2009, we prepared well for the more challenging business year 2010,” commented Prof. Barner. Boehringer Ingelheim is expecting total net sales to be at the previous year’s level in the 2010 financial year. This means that the expected loss of sales caused by competition from generic drugs for important turnover generators on the US pharmaceutical market, such as FLOMAX®, SIFROL®/MIRAPEX® and CATAPRESAN® TTS will be largely offset by growth of the remaining portfolio. On the cost side, increased expenditure for the scientific profiling and introduction of innovative new medicines is envisaged. At the same time, the company has made a conscious decision to further increase expenditure for research and development. These investments in the future will impact on operating income in 2010.
However, Boehringer Ingelheim has already laid the foundation for the company’s future sustained growth, said Prof. Barner: “We are expecting further new launches in 2010 which will lead Boehringer Ingelheim into another successful growth phase – with medicines which offer patients a convincing therapeutic advantage in the treatment of their diseases or the prevention of diseases.”
Furthermore, in the future, Boehringer Ingelheim also intends to invest in biotechnology and start-up companies, which are researching promising therapy approaches and technologies in order to promote innovation in medical science. For this purpose, Boehringer Ingelheim has created a corporate venture capital fund (BIVF) with a financial volume of EUR 100 million. “The investments will extend well beyond Boehringer Ingelheim’s current areas of therapy and our existing research topics and technologies,” explained Prof. Barner, stating that initial investments have already been planned for this year.
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