Boehringer Ingelheim Reports 9% Y/Y Sales Increase in 2009, Forecasts Flat 2010 Sales on Patent Loss

Privately owned German group Boehringer Ingelheim has ended 2009 on a good performance, achieving a 9.7% year-on-year rise in net sales to 12.7 billion euro (US$17.05 billion), of which the Human Pharmaceuticals business accounted for 95.2%. Over the period, sales of prescription medicines increased 10.4% y/y to 10.1 billion euro, while Boehringer saw sales of its consumer healthcare products rise 5.9% y/y to 1.3 billion euro. The group reported an operating income of 2.2 billion euro, up 13.1% despite a 5% y/y rise in research and development expenditure. The group's net income jumped 23.5% y/y over the period to 1.8 billion euro.

The Americas remained the main source of revenues for Boehringer in 2009 with nearly half of the group's sales generated in that region where sales rose 12.5% y/y to 6.3 billion euro. Meanwhile, Boehringer achieved the strongest sales growth in the Asian, Australasian and African region where sales were up 15.1% y/y in the reported currency. However, European sales only grew 2.7% y/y in 2009, affected by the economic crisis.

Boehringer's sales were driven by the good performance of its core products, which together generated more than 6 billion euro in 2009. Chronic obstructive pulmonary disease drug Spiriva (tiotropium bromide) was once again Boehringer's best-selling product with sales of 2.4 billion euro, up 16.2% compared with 2008. In second position comes benign prostatic hyperplasia (BPH) drug Flomax (tamsulosin) which achieved the fastest sales growth in 2009 (31.5% y/y) to bring in 1.4 billion euro. Meanwhile, blood-pressure treatment Micardis (telmisartan) and Parkinson's Disease treatment Mirapex/Sifrol (pramipexol) respectively generated 1.4 billion and 801 million euro in 2009, up 14.3% and 6.6% y/y in the reported currency. However, two of the top four treatments, namely Flomax (tamsulosin) and Mirapex/Sifrol (pramipexol), will see generic competition expand in the U.S. market in 2010. This is likely to widely affect Boehringer's revenues.

Meanwhile, Boehringer's Consumer healthcare business grew 5.9% y/y in the reported currency to 1.3 billion euro. The overall performance of this segment was hurt by the economic crisis, particularly in Spain where sales were down 5.9% y/y and in Eastern Europe where revenues fell 11.4%. Boehringer's key consumer health products—laxative Dulcolax (bisacodyl), cough syrup Mucosolvan (ambroxol), nutritional complement Pharmaton and abdominal pain drug Buscopan (hyoscine butylbromide)—achieved combined sales growth of 8% y/y in 2009.

Outlook and Implications

After a good performance in 2009, Boehringer Ingelheim faces a challenging year in 2010 as its main sources of revenue, and particularly Flomax and Mirapex/Sifrol, are at risk of generic competition in the U.S. market. The group therefore expects 2010 sales to be at the same level as 2009. However the group expects to switch to high single-digit growth again in 2011, thanks to the launch of five new innovative products in 2010 and 2011. Newly launched drugs are likely to more than offset the losses induced by generic competition in the medium term.

Boehringer's most advanced compound Pradaxa (dabigatran etexilate) is expected to be approved to reduce the risk of stroke in patients with atrial fibrillation in most major markets by end-2010 or at the beginning of 2011. Boehringer is banking on its drug candidate, already approved for the treatment of venous thromboembolic events in adults that have undergone hip or total knee replacement surgery, to "more than close the gap left by the expiry of patents in 2010" in the medium term. The recent RELY study showed Pradaxa significantly reduces the risk of stroke and systemic embolism in patients with atrial fibrillation compared with warfarin, without increasing the risk of major bleeding. Boehringer could count on positive pricing and reimbursement decisions as regulatory authorities are likely to welcome the superior safety profile of the anticoagulant, whose performance could boost Boehringer's portfolio in the medium-to-long term. Pradaxa is, in parallel, under development for the prevention of secondary venous thromboembolism (VTE), the treatment of acute VTE and the secondary prevention of cardiac events in patients with Acute Coronary Syndrome (see Germany: 9 December 2009: Anticoagulant Pradaxa Beats Warfarin in Treatment of VTE, Boehringer Reports in RE-COVER Study).

In addition to Pradaxa, Boehringer's late-stage clinical pipeline includes Girosa (flibanserin), evaluated under a Phase III clinical trial for the treatment of female hypoactive sexual desire disorder (see Germany: 17 November 2009: Boehringer Ingelheim's Desire Pill Boosts Female Libido in Late-Stage Trial) as well as two drug candidate in the field of oncology. The two compounds are Tovok (BIBW 2992) and Vargatef (BIBF 1120), are respectively in Phase III clinical trial in lung cancer and in ovarian and lung cancer (see Germany: 31 December 2009: Boehringer Ingelheim Launches Phase III Clinical Trial in Ovarian Cancer). Meanwhile, Boehringer is counting on one of its most advanced compounds in the metabolic field, linagliptin (DPP-4 inhibitor Ondero), under Phase III clinical trials, to break into the diabetes market and strengthen its metabolic diseases portfolio.

Boehringer Ingelheim intends to maintain high R&D expenditure of more than 20% of net sales over the coming years in order to develop its oncology and metabolic diseases business—a recent area of focus for the group—as well as its biopharmaceutical segment. In order to build its portfolio and fill the gap left by the patent expiry of its lead compounds, the group is also likely to eye targeted acquisitions of biotechs.