Boehringer Ingelheim sees positive business momentum in 2020 despite impact of COVID-19
Boehringer Ingelheim stepped up its investments in R&D significantly in 2020 in pursuit of innovative medicines and therapies for diseases for which no satisfactory treatments are available. In particular, efforts to research potential COVID-19 related therapies were accelerated. The company spent 3.7 billion EUR on R&D, 7% more than in the previous year. This represents the highest annual investment in R&D in the 136-year history of the research-driven biopharmaceutical company.
“We started our R&D for potential COVID-19 therapies early in the first quarter of 2020, recognizing the urgent need,” said Hubertus von Baumbach, Chairman of the Board of Managing Directors. “Together with many partners worldwide, this work is ongoing. Our employees have done remarkable work to fight COVID-19, ensure our medicines continued to reach patients and animals, and physicians continued to be supported. Our achievements in 2020 are the result of their effort.”
Building on its vast knowledge in various therapeutic areas, such as respiratory diseases and virology, Boehringer Ingelheim is engaged in several projects aimed at finding medical solutions to treat COVID-19. In December 2020, the company announced together with Cologne University Hospital, the University of Marburg, and the German Center for Infection Research the initiation of Phase I/IIa clinical investigation of BI 767551, the first SARS-CoV-2 neutralizing antibody administrated via inhalation as a potential new therapeutic and prophylactic option to block the virus at the site of infection. Other COVID-19 initiatives include the research and development of SARS-CoV-2 antibodies that can be combined with BI 767551, small molecules to inhibit its replication, and therapy development to prevent microcoagulation (blood clots).
Solid performance despite COVID-19 pandemic
2020 was a good year for Boehringer Ingelheim, although the effects of the COVID-19 pandemic were omnipresent. All of its businesses contributed positively to net sales and operating income. The company recorded net sales of 19.57 billion EUR, a 3% increase compared to the previous year. Foreign currency headwinds had a considerable impact; adjusted for currency effects, net sales rose by 5.6% year on year.
Emphasis on profitable growth and protecting liquidity
Operating income at Group level rose to 4.62 billion EUR (2019: 3.78 billion EUR). One-time gains from divestitures supported the operating income. Income after taxes saw a 12.5% year-on-year increase to 3.06 billion EUR (2019: 2.72 billion EUR). Cash flow from operating activities increased by 619 million EUR to 3.96 billion EUR (2019: 3.34 billion EUR). At the end of 2020, the equity ratio stood at 47% (2019: 44%).
“We are pleased with the results we achieved in 2020, considering the challenging conditions we faced,” said Michael Schmelmer, the Member of the Board of Managing Directors responsible for Finance and Group Functions. “We met our ambitious targets, both in terms of our contribution to the wellbeing of humans, pets and livestock, and our business performance. This allows us to continue to invest even more in R&D, as well as in the long-term opportunities we have identified, most notably in the fields of oncology as well as digital and data technologies.”
Continued high investments in tangible assets
The company invested 1.05 billion EUR (2019: 1.07 billion EUR) in tangible assets in 2020, including the large-scale production facility for biopharmaceutical products (LSCC) in Vienna, Austria, and the new development center for biopharmaceutical medicines (BDC) in Biberach, Germany. Expenditures in tangible assets decreased slightly compared to the all-time high in 2019, due to the partial delay of construction work caused by COVID-19.
Targeted M&A activities round off the portfolio
Boehringer Ingelheim completed several acquisitions in 2020 to selectively expand its portfolio. In July, the company announced the acquisition of Global Stem cell Technology (GST), a Belgian veterinary biotech company. Boehringer Ingelheim acquired GST to develop and produce state-of-the art stem cell products for horses and pets. In September, an equity stake in the China-based New Ruipeng Group, a company that specializes in providing medical care services for pets, was acquired. In December, the company announced the acquisition of all shares of NBE-Therapeutics, a clinical-stage Swiss biotechnology company focused on antibody-drug conjugates and advancing targeted cancer therapies derived from its immune stimulatory iADC™ platform. This acquisition adds another key dimension to Boehringer Ingelheim’s focus on patients with difficult-to-treat solid tumors as part of the company’s comprehensive oncology development portfolio.
Human Pharma – Strong growth across all regions
At 14.42 billion EUR, net sales of human pharmaceuticals grew strongly by 5.8% (year on year and adjusted for currency effects) and accounted for 74% of total net sales. All regions contributed to the strong results in Human Pharma. The United States remains the largest market for Boehringer Ingelheim with the highest regional net sales in the Human Pharma business. Boehringer Ingelheim generated net sales of 5.66 billion EUR in the US, up 3.4% (year on year and adjusted for currency effects). In the EUCAN region (Europe, Canada, Australia, and New Zealand), net sales rose by 6.0% (year on year and adjusted for currency effects) to 4.59 billion EUR. In Emerging Markets, including the People’s Republic of China, Boehringer Ingelheim registered net sales of 2.84 billion EUR, a 10.4% increase (year on year and adjusted for currency effects). In Japan, net sales increased by 6.2% (year on year and adjusted for currency effects) to 1.33 billion EUR.
Medicines for the treatment of cardiovascular and metabolic diseases, as well as respiratory diseases, remain the most important contributors to net sales. JARDIANCE®, a medicine used along with diet and exercise to lower blood sugar in adults with type 2 diabetes, remains the biggest revenue contributor in Human Pharma, generating net sales of 2.48 billion EUR (2019: 2.15 billion EUR). JARDIANCE® reduces the risk of cardiovascular death in adults with type 2 diabetes who have known cardiovascular disease. OFEV® was the company’s second-strongest revenue contributor for the first time, with net sales of 2.06 billion EUR and growth of 41% (year on year and adjusted for currency effects) (2019: 1.49 billion EUR). OFEV® is a medicine for the treatment of patients with idiopathic pulmonary fibrosis (IPF), systemic sclerosis-associated interstitial lung disease (SSc-ILD) and, in some countries, other chronic fibrosing interstitial lung diseases with a progressive phenotype.
High R&D investment in Human Pharma
R&D investments in the Human Pharma business amounted to 3.28 billion EUR or 22.8% of net sales. There are around 100 projects across all phases of the research process. The goal is for 75% of these projects to be either the first molecule in their active ingredient class or in a new therapeutic area. Over 50% of them have breakthrough potential. The focus of R&D in Human Pharma lies on cardiovascular and metabolic diseases, oncology, respiratory, immunology, diseases of the central nervous system and retinal health.
Animal Health – Strong performance in a highly competitive market
The Animal Health business of Boehringer Ingelheim is one of the largest providers of veterinary vaccines and medicines and has a strong presence in the livestock and companion animal segments. In 2020, the Animal Health business delivered a strong performance in a highly competitive market and grew by 5% (year on year and adjusted for currency effects), withnet sales of 4.12 billion EUR. The swine and pet antiparasitics segments in particular developed successfully and outperformed expectations. In 2020, the decrease in the incidence of African swine fever in China had a rebound effect on the swine segment. As a result, the swine vaccine INGELVAC CIRCOFLEX® registered a strong 14.9% increase in net sales (year on year and adjusted for currency effects) to 264 million EUR (2019: 238 million EUR). The parasiticide NEXGARD® for dogs remained the best-selling product, with growth of 12% (year on year and adjusted for currency effects) and net sales of 804 million EUR.
Biopharmaceutical Contract Manufacturing – One of the leading providers in the industry
Boehringer Ingelheim is one of the leading manufacturers of biopharmaceuticals, both for its own portfolio and for partners in the industry. 60% of the top 20 pharmaceutical companies and innovative biotech firms are clients of Boehringer Ingelheim’s Biopharmaceutical Contract Manufacturing business, known under the brand name Boehringer Ingelheim BioXcellenceTM. The biopharmaceuticals business achieved net sales of 837 million EUR in 2020, up 6.6% (year on year and adjusted for currency effects).
Outlook 2021: Boehringer Ingelheim expects a slight year on year increase in net sales on a comparable basis
The ongoing COVID-19 pandemic and a more challenging industry environment with increasing price pressure in several key markets is expected to have an impact on Boehringer Ingelheim’s results in 2021. Assuming that the approved vaccines and other medicines currently undergoing the approval process help curb the COVID-19 pandemic, the company expects strong general market growth for prescription pharmaceuticals. For 2021, Boehringer Ingelheim expects to achieve a slight year-on-year increase in net sales on a comparable basis.
The 2020 Annual Report can be found here: https://annualreport.boehringer-ingelheim.com/
Boehringer Ingelheim is working on breakthrough therapies that improve the lives of humans and animals. As a leading research-driven biopharmaceutical company, the company creates value through innovation in areas of high unmet medical need. Founded in 1885 and family-owned ever since, Boehringer Ingelheim takes a long-term perspective. Around 52,000 employees serve more than 130 markets in the three business areas, Human Pharma, Animal Health, and Biopharmaceutical Contract Manufacturing.
Learn more at www.boehringer-ingelheim.com.
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