German privately owned pharmaceutical major Boehringer Ingelheim increased its net sales in 2012 by 11.5% year-on-year (y/y) thanks to non-European markets, while net profit was down 16.2% y/y.
IHS Global Insight perspective | |
Significance | German pharmaceutical major Boehringer Ingelheim has announced its 2012 results, noting an increase of 11.5% year-on-year (y/y) in net sales, driven mainly by non-European markets, although net profit dropped 16.2% y/y. |
Implications | Sales of anticoagulant Pradaxa soared by 76.2% y/y, making it the company's outstanding individual growth product. |
Outlook | Boehringer has an impressive pipeline, but faces an increasingly tough regulatory environment to negotiate; its own growth predictions of mid-single-digit figures for 2013 are realistic in this increasingly restrictive regulatory environment, particularly in Europe. |
German pharma major Boehringer Ingelheim has announced its full-year results for 2012, reporting net sales of EUR14.691 billion (USD19.1 billion), an increase of 11.5% year-on-year (y/y), although when currency adjusted, the y/y growth is reported to have reached 6.3% y/y. The company's growth was driven by sales of human pharmaceuticals – rising by 12% y/y (or 7.7% y/y, currency adjusted) to EUR13.08 billion – and particularly prescription pharmaceuticals. However, net profit was down by as much as 16.2% to EUR1.237 billion.
Boehringer Ingelheim, sales by market segment, 2012 (EUR mil.) | ||
Market segment | Sales | % change y/y |
Human pharmaceuticals | 13,081 | 12.0 |
Prescription medicines | 11,405 | 12.9 |
Consumer healthcare | 1,505 | 7.8 |
Biopharmaceuticals | 549 | 5.3 |
Animal health | 1,062 | 8.8 |
Source: Boehringer Ingelheim | ||
Regionally, it was the Americas, and Asia, Australasia, and Africa (AAA) that drove Boehringer's sales forward in 2012. The Americas is the company's largest market for prescription medicines, with sales growing by 15.0% y/y in 2012 to EUR5.556 billion, and the United States in particular helped to push forward growth, with sales of prescription drugs increasing in this market by 16.8% y/y to EUR4.645 million. Meanwhile, the AAA region saw the strongest overall sales growth, and in the area of prescription drugs specifically, sales increased by 18.3% y/y to EUR2.815 million. In Europe, prescription pharmaceutical sales were up by 5.7% y/y to EUR2.822 billion, with the United Kingdom and Germany seeing sales growth of 9.3% y/y and 8.5% y/y, respectively.
The stand-out performance in terms of individual pharmaceutical products was most definitely that of anticoagulant Pradaxa (dabigatran), with sales rising 76.2% y/y to EUR1.1 billion.
Boehringer Ingelheim, sales by region, 2012, (EUR mil.) | ||
Region | Sales | % change y/y |
Americas | 5,556 | 15.0 |
- US | 4.645 | 16.8 |
AAA | 2,815 | 18.3 |
Europe | 2,822 | 5.7 |
Source: Boehringer Ingelheim | ||
The company's investment in research and development (R&D) increased by 11% y/y in 2012 to EUR2,795 billion. This included over EUR40 million on research for vaccines, the company reports. It estimates that 22.5% of its net sales was invested back into R&D for human medicines, exceeding the industry average. Investment in tangible assets was up 23% y/y, at EUR562 million.
Boehringer is predicting that its sales growth in 2013 will be in the range of mid-single-digit figures, in line with its currency-adjusted growth in 2012. Contributing to this, according to the company, will be its continually developing product pipeline, with several product launches planned during the year. Boehringer notes that one of its main ambitions for 2013 is the launch onto the market of its first oncology medicine, non-small-cell lung cancer treatment afatinib, which is in the final stages of the review process in the European Union and United States. Indeed, the company has identified oncology as its second "new medical pillar", alongside diabetes; thus, it can be expected that it will focus an increasing amount of its R&D resources on this field in the future.
The company is also planning market launches in other oncology indications, and also in chronic obstructive pulmonary disease and asthma, as well as diabetes and hepatitis.
Outlook and implications
Boehringer's net sales growth in 2012 – even if currency adjustments are taken into consideration – is impressive, and its substantial global reach is clearly an important factor in it being able to maintain a strong growth course in net sales terms. Looking at net profit, however, it is apparent that Boehringer's high level of investment in both R&D and tangible assets has had a negative impact on the bottom line, as well as the one-off costs of the closing of several chemical plants in France and the US; the company may well reap the benefits of this high level of spending in due course, provided its pipeline proves as lucrative as it is hoping.
It certainly does not lack challenges in achieving this aim: in Europe, cost-containment measures in many EU countries are intensifying, with the company's home nation, Germany, high among the list of countries proving to be less open to new innovative products than previously. One of Boehringer's most high-profile new products, type 2 diabetes treatment Trajenta/Tradjenta (linagliptin), which it developed alongside diabetes partner Eli Lilly (US), has recently failed in its second attempt to gain additional benefit status from Germany's Federal Joint Committee. Concerns about the safety of the newer classes of type 2 diabetes drugs are likely to have some impact on their sales, as Boehringer and Lilly seek another new market launch with sodium glucose co-transporter-2 product empagliflozin (see United States - Germany: 26 March 2013: Lilly, Boehringer submit NDA for empagliflozin).
Notwithstanding this, Boehringer will be cheered by its dynamic sales growth in 2012, and the fact that due to this, the company is once again the top pharmaceutical company in Germany.