Boehringer 2010 Sales Hit by Generic Competition, Mid-Single-Digit Growth Expected for 2011

The year 2010 was one of transition for privately owned German group Boehringer Ingelheim. In addition to tough regulatory changes in the United States and Europe, Boehringer Ingelheim had to face the loss of exclusivity for key sales drivers in the US. This resulted in a sales loss of EUR1.4 billion (USD1.99 billion) for the firm, which reported net sales of EUR12.6 billion, down 1.1% compared with 2009. Boehringer's prescription medicines business saw its sales decrease by 3.5% y/y to EUR9.7 billion, while its consumer health business performed relatively well with sales of EUR1.3 billion in 2010, up 4.5% compared with 2009. The group reported an operating income of EUR1.8 billion, down 15.3% y/y. In terms of spending, Boehringer maintained high levels of investments in R&D, which were up 10.7% y/y to EUR2.4 billion, of which EUR2.3 billion were dedicated for the research and development of prescription medicines. The group's net income drop 49.5% y/y over the period to EUR888 million.

The Americas region remained Boehringer's largest region in terms of sales in 2010, despite the 8.5% drop recorded in sales due to generic competition. Overall, the Asia/Australasia /Africa region recorded the strongest growth, with sales increasing by 11.6% y/y over 2010. Boehringer achieved a growth of 2.7% y/y in Europe, which accounted for 32% of the group's total sales.

Boehringer's sales were hurt by the loss of exclusivity for the prostate drug Flomax (tamsulosin) and the Parkinson's disease product Mirapex/Sifrol (pramipexol), as well as by generic competition to anti-hypertensive medicine Catapresan (clonidine) in the US. As a result, sales of human pharmaceuticals were down 4% y/y to EUR11.7 billion in 2010. Sales of prescription medicines decreased by 3.5% y/y despite the launch and positive sales contribution of two new products: Pradaxa (dabigatran etexilate) and Twynsta (telmisartan/amlodipine). Chronic obstructive pulmonary disease drug Spiriva (tiotropium bromide) was once again Boehringer's best-selling product with sales of EUR2.8 billion, up 19.1% y/y. In second and third position come blood-pressure treatment Micardis (telmisartan) and Combivent (ipratropium bromide + salbutamol sulphate) which achieved respective sales of EUR1.5 billion and 727 million, up 11.6% and 11.2% y/y. Mirapex/Sifrol (pramipexol) has, as expected, been affected by the entry of generic competition over 2010. Sales of the Parkinson's Disease treatment dropped 16.6% y/y to EUR668 million in 2010.

Meanwhile, Boehringer's consumer healthcare business achieved sales of EUR1.3 billion, up 4.5% compared with 2009.

Outlook and Implications

After a good performance in 2009, Boehringer Ingelheim's 2010 profit was significantly affected by generic competition, particularly in the US where two of its core products, namely prostate drug Flomax and the Parkinson's disease product Mirapex/Sifrol lost their patent protection. To compensate for the loss induced by the entry of generics, Boehringer is banking on the recent launch of Pradaxa and Twynsta, as well as on its well-filled product pipeline, which is the result of heavy investment in R&D. Pradaxa gained approval from the US FDA for stroke risk reduction in patients with non-valvular atrial fibrillation (AF) in October 2010, ahead of rivals. It was more recently authorised in New Zealand, Japan and South Korea, and Boehringer expects further approvals in Europe. Pradaxa has already been available for the prevention of venous thromboembolism (VTE) following hip and knee replacement operations in 75 countries since 2008.

In parallel, Boehringer's pipeline is filled with drug candidates in the areas of respiratory diseases, immunology, infectious diseases, cardiometabolic diseases, neurological diseases and oncology. The DPP-4 inhibitor linagliptin is Boehringer's most advanced compound for the treatment of diabetes. It is being developed as a tablet to be taken once daily for the treatment of type 2 diabetes (as a monotherapy) and as a combination therapy. First marketing authorisations are expected in 2011. In the field of oncology, Boehringer is currently conducting Phase III trials to assess afatinib (BIBW 2992) in the treatment of various solid tumours (including non-small-cell bronchial carcinoma, breast cancer and carcinoma of the head and neck) and BIBF 1120 (planned trade name Vargatef) for the treatment of patients with advanced non-small-cell bronchial carcinoma, as well as patients suffering from ovarian cancer. For 2011, Boehringer Ingelheim expects mid-single-digit growth.