Boehringer Ingelheim positioned for future growth with product launches

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The FINANCIAL — With numerous marketing authorisations for medicines and product launches in 2014, the research-driven pharmaceutical company Boehringer Ingelheim is now positioned for future growth. “After a challenging 2014, the focus for us now is on launching numerous additional new products and on our profitability,” said Professor Andreas Barner, Chairman of the Board of Managing Directors of Boehringer Ingelheim, at the Annual Press Conference today. “We were able to submit a large number of compounds for marketing authorisation in 2014 and, with research and development expenditure amounting to just close to 2.7 billion euros, we have invested once again in the future.”

In 2014, the company generated net sales of around 13.3 billion euros, which, currency-adjusted, represented a decline of 3.2 per cent
(- 5.3 per cent in euro terms). This resulted in an operating income of some 2.1 billion euros and a return on net sales of 16.1 per cent. For the current financial year, the company expects a moderate increase in net sales compared with the previous year. Boehringer Ingelheim employed more than 47,700 people worldwide in 2014, which is roughly one per cent more than in 2013, according to Boehringer Ingelheim.

Many additional product launches planned

Boehringer Ingelheim last year submitted a large number of new medicines for marketing authorisation. Medicines launched in the last few months include STRIVERDI RESPIMAT for patients suffering from chronic obstructive pulmonary disease (COPD), JARDIANCE and GLYXAMBI, a combination of the active ingredients linagliptin and empagliflozin, for the treatment of type 2 diabetes, OFEV for the treatment of idiopathic pulmonary fibrosis (IPF) and, at the beginning of January 2015, VARGATEF for the treatment of advanced lung cancer patients with adenocarcinoma after chemotherapy.

Many challenges brought to a successful conclusion

In business terms, research-driven pharmaceutical companies found themselves confronted with a rapidly changing market environment in 2014 – foremost in the USA. This was due in part to tougher regulation, which led to additional pressure on the pharmaceutical business as a whole. “We responded to the rapidly changing market environment quickly and effectively with a heightened awareness of costs,” said Hubertus von Baumbach, Member of the Board of Managing Directors responsible for the Corporate Board Division Finance.

Boehringer Ingelheim’s equity was up 14 per cent in 2014 to 8.1 billion euros. The equity ratio also rose to 40 per cent. The increase in financial funds to 8.5 billion euros will secure the company’s independence and provide the financial flexibility needed for future growth. Overall, this underscores the group’s sound financing.

Cash flow from operating activities, at 2 billion euros, remained at a high level. Looking ahead to future developments, Boehringer Ingelheim invested in the expansion of its production capacity, for example for the manufacture of the RESPIMAT inhaler at its locations in Dortmund and Ingelheim.

Prescription Medicines most important business mainstay

Boehringer Ingelheim last year generated net sales of 10.1 billion euros in Prescription Medicines, its most important business. At
3.2 billion euros, SPIRIVA for the treatment of COPD remains the company’s best-selling product. One of the main growth drivers in this business in the years to come will be products for the treatment of diabetes. In 2014, the TRAJENTA/JENTADUETO product family for the treatment of type 2 diabetes already generated an increase in net sales, currency-adjusted, of around 37 per cent to 636 million euros
(+ 34.2 per cent in euro terms). The anticoagulant PRADAXA contributed 1.2 billion euros to net sales. “We now have many products from recent development on the market. For the coming five years, we plan, however, to markedly renew our sales drivers,” said von Baumbach. “Our successes in research and development are the drivers of this.”

With net sales of over 1.4 billion euros, business in Consumer Health Care medicines accounted for 11 per cent of the group’s net sales. Driven primarily by the core global brands BUSCOPAN, DULCOLAX, MUCOSOLVAN and PHARMATON, net sales, currency-adjusted, were up 2 per cent (- 2.5 per cent in euro terms).

In its Animal Health business, Boehringer Ingelheim in 2014 once again generated net sales of over one billion euros. This corresponds to a currency-adjusted increase of 6.8 per cent (+ 5.6 per cent in euro terms) and 8 per cent of the group’s total net sales. The business outperformed the market.1 Net sales in the small animal business rose by a currency-adjusted 18.1 per cent (+ 17.2 per cent in euro terms) and was thereby the main growth driver. The greatest growth here was achieved with the dog vaccine DURAMUNE® for protection against infectious diseases. Net sales increased by a currency-adjusted 33.1 per cent (+ 32.3 per cent in euro terms) to 69 million euros.

Boehringer Ingelheim generated net sales of 501 million euros in 2014 with the contract manufacturing of biopharmaceuticals.

USA, Japan and Germany are the top three sales markets

The three most important markets – USA, Japan and Germany – accounted for around 55 per cent of Boehringer Ingelheim’s total net sales in 2014, with net sales of around 912 million euros generated in Germany, net sales of around 1.7 billion euros in Japan and around 4.6 billion euros in the USA.

Outlook 2015

In view of the numerous changes in the healthcare systems, there are currently no signs of any significant growth in the pharmaceutical industry. “In our view, Boehringer Ingelheim is well-positioned for future growth,” said Professor Barner. “Despite the difficult market environment, we are therefore planning in 2015 for a moderate increase in net sales compared with the previous year.”

 

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