Good business performance gives Boehringer Ingelheim tailwind for investment in R&D
In 2021, Boehringer Ingelheim again stepped up its annual investments in R&D to a new high in its 137-year history. The company spent 4.1 billion EUR on R&D (2020: 3.7 billion EUR), up 11.7%. R&D investments in Human Pharma rose to 3.7 billion EUR (2020: 3.3 billion EUR), while investments in Animal Health were up 1% to 416 million EUR (2020: 412 million EUR).
“2021 was a good year for patients, for animal owners and for our company. We expanded our contribution to transforming human and animal lives and further strengthened our combined pipeline,” explained Hubertus von Baumbach, Chairman of the Board of Managing Directors. “Accordingly, we also intensified our efforts in Research and Development and achieved significant medical progress, including three breakthrough therapy designations granted by the US FDA for innovative medicines in Human Pharma. In Animal Health, we laid the foundation for the launch of innovative new solutions for companion animals and livestock in 2022 and 2023.
“We present these results at a time when war has been brought back to Europe,” continued von Baumbach. “Our thoughts are with all Ukrainians. The aggression against the country is heartbreaking. We are supporting those seeking refuge and those in need in Ukraine, through short-term and long-term financial support, through product donations and supply of medicines, and many of our employees engage in support initiatives using our volunteering days program. We all hope that this horrific situation will end soon.”
Growth across all businesses
Despite the ongoing COVID-19 challenges, 2021 was a successful year. Boehringer Ingelheim recorded net sales of 20.6 billion EUR (2020: 19.6 billion EUR), a 5.4% increase compared to the previous year. Adjusted for currency effects, net sales rose by 7.5%.
Operating income at Group level rose to 4.7 billion EUR (2020: 4.6 billion EUR). Income after taxes saw an 11.2% year-on-year increase to 3.4 billion EUR (2020: 3.1 billion EUR). Cash flow from operating activities decreased slightly by 117 million EUR to 3.9 billion EUR (2020: 4.0 billion EUR). At the end of 2021, the equity ratio stood at 48% (2020: 47%).
“All our businesses contributed to the solid financial results in 2021, a strong achievement, especially when considering the overall pandemic and economic situation. As a result, we can continue making significant investments and have strengthened our overall financial basis – and thus our independence,” said Michael Schmelmer, Member of the Board of Managing Directors responsible for Finance and Group Functions. “The extraordinary commitment of all our employees in a second pandemic year drove our achievements. Working conditions were often challenging, both for those of us who worked from home on an almost permanent basis and for those who worked under restricted conditions on our sites. In times of need, we all stand up for each other. This makes me feel positive and optimistic and is particularly important for the long-term success of our company.”
Human Pharma - Significant progress in late-stage R&D pipeline
The R&D pipeline in Human Pharma comprises more than 100 clinical and preclinical projects. Based on the progress of the later stage projects, the pipeline has the potential to deliver up to 15 new product launches until 2025. A key focus in research is to gain a deeper understanding of the connections between different diseases. JARDIANCE® (empagliflozin) is a good example. This medication was initially approved as a type 2 diabetes medication. Investing into the better scientific understanding of the interconnectedness of cardio, renal and metabolic systems has enabled Boehringer Ingelheim to broaden its use from diabetes to heart failure. Empagliflozin is now the only approved treatment for adults with symptomatic chronic heart failure in the European Union. Furthermore, it may also be of benefit in a broad range of chronic kidney diseases, as demonstrated from a positive interim analysis data readout of the EMPA-KIDNEY trial. It is also being assessed for the prevention of heart failure following a heart attack in the ongoing EMPACT-MI trial.
The pace of innovation from the company’s immunology research was further underscored by Spesolimab, an IL-36 specific monoclonal antibody for the treatment of generalized pustular psoriasis (GPP). GPP is a rare and sometimes even life-threatening skin disease with no globally approved treatments. Spesolimab has been granted US FDA Breakthrough Therapy Designation and pivotal data was published in the New England Journal of Medicine. Regulatory submissions for the treatment of GPP flares have been filed in major geographies, with the aim of bringing Spesolimab to eligible patients this year.
Other inflection points for the company’s R&D pipeline this year include lung fibrosis, the central nervous system (CNS) and oncology. A study to evaluate how a PDE4B inhibitor affects lung function of people with idiopathic pulmonary fibrosis (IPF) will be published at a medical conference later this year. In February 2022, the US FDA has granted Breakthrough Therapy Designation to the compound in this indication. In CNS, a Gly-T1 inhibitor was also granted US FDA Breakthrough Therapy Designation for the treatment of Cognitive Impairment Associated with Schizophrenia (CIAS), and a high level data readout is anticipated for later this year. Also in CNS, Boehringer Ingelheim is collaborating on the digital therapeutic CT-155 as an adjunct to pharmacotherapy, which aims to help patients modify their behavior and train new skills. The promising MDM2-p53 antagonist is the most advanced asset in oncology now in a pivotal phase II clinical trial for rare soft tissue sarcoma, an area of significant unmet medical need that lacks novel approved therapies.
Strong growth for JARDIANCE® and OFEV®
At 15.3 billion EUR (2020: 14.4 billion EUR), net sales of human pharmaceuticals grew by 8.4%* and accounted for 74% of total net sales. The United States remains the largest market for Boehringer Ingelheim. The company generated net sales of 5.8 billion EUR (2020: 5.7 billion EUR) in the US, up 5.9%*. In the EUCAN region (Europe, Canada, Australia, and New Zealand, net sales excluding licensing income) rose by 4.1%* to 4.4 billion EUR (2020: 4.2 billion EUR). In Emerging Markets, including the People’s Republic of China, the company registered net sales of 3.0 billion EUR (2020: 2.8 billion EUR), a 5.9%* increase. In Japan, net sales increased by 7.1%* to 1.3 billion EUR (2020: 1.3 billion EUR).
Medicines for the treatment of cardiovascular and metabolic, as well as respiratory diseases, remain the most important contributors to net sales. JARDIANCE® remains the biggest revenue contributor in Human Pharma, generating net sales of 3.9 billion EUR (2020: 3.1 billion EUR) and growth of 28.6%*. OFEV® was the company’s second-strongest revenue contributor with net sales of 2.5 billion EUR (2020: 2.1 billion EUR) and growth of 25.4%*.
Animal Health – Higher net sales in a very competitive market
The Animal Health business of Boehringer Ingelheim is a global leading provider of vaccines, therapeutics and preventative care offerings that protect animals from disease and pain. In 2021, the Animal Health business significantly increased its net sales in a highly competitive market and grew by 6.2%*, with net sales of 4.3 billion EUR (2020: 4.1 billion EUR).
In terms of sales, the companion animals’ portfolio remains by far the largest segment of Boehringer Ingelheim Animal Health, including the best-selling product NEXGARD®, a parasiticide for dogs, with growth of 16.6%* and net sales of 916 million EUR (2020: 804 million EUR). The antiparasitic FRONTLINE® for dogs and cats is another major product, with net sales up 4.8%* at 418 million EUR (2020: 406 million EUR). Growth in this segment was also fueled by more people acquiring a new pet during the COVID-19 pandemic.
The livestock segment grew only moderately due to the ongoing COVID-19 pandemic and African swine fever, especially in Asia and Europe. Whereas the overall swine segment expanded by 3%, the swine vaccine INGELVAC CIRCOFLEX® saw a decline in sales of -2.7%* to 253 million EUR (2020: 264 million EUR).
Biopharmaceutical production – 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 917 million EUR in 2021 (2020: 837 million EUR), up 9.5%* due to strong demand for our customers’ products.
Investments in tangible fixed assets remain at a high level
In 2021, the company invested 968 million EUR (2020: 1.05 billion EUR) in tangible fixed assets, including the large-scale production facility for biopharmaceutical products (LSCC) in Vienna, Austria, which was inaugurated in October 2021, and the new development center for biopharmaceutical medicines (BDC) in Biberach, Germany. Restricted construction activities due to the COVID-19 pandemic had an impact on the investment sum.
Outlook for 2022: Boehringer Ingelheim expects a slight year-on-year increase in net sales on a comparable basis
The ongoing COVID-19 pandemic, the geopolitical tensions in Europe and a challenging industry environment are expected to have an impact on the results of Boehringer Ingelheim. For 2022, the company expects to achieve a slight year-on-year increase in net sales on a comparable basis. For the next five years, plans are to invest over 25 billion EUR in its research pipeline. In addition, capital expenditures for novel production technologies and a cutting-edge supply network are planned, with well over 7 billion EUR of investments targeted for the next five years. This includes further expansion of the biopharmaceutical production capacities.
*year on year and adjusted for currency effects
2021 Annual Report at https://annualreport.boehringer-ingelheim.com/
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