Boehringer Ingelheim maintains sales level/course set for the future: product pipeline well-filled

Boehringer IngelheimIn the business year 2010, Boehringer Ingelheim almost compensated for the anticipated loss of turnover announced in advance last year, nearly achieving the previous year's level. Despite the sales loss of EUR 1.4 billion, due to the loss of exclusivity rights on important sales drivers in the US pharmaceuticals market, and the additional burden arising from healthcare reforms in the USA and Europe, business developed satisfactorily in 2010. This can be put down to growth in the rest of the Prescription Medicines portfolio (currency-adjusted +5.5 percent), the successful launch of new products and a sharp 51 percent increase in sales in the Animal Health business. Operating income, comparable to EBIT, was satisfactory at around EUR 1.9 billion, corresponding to a return on net sales (operating income in relation to net sales) of 15.1 percent. For Boehringer Ingelheim, 2010 was thus a successful year, in spite of the difficult overall conditions.

Professor Andreas Barner, Chairman of the Board of Managing Directors and responsible for the Corporate Board Division Pharma Research, Development and Medicine states: "The last business year was a year of transition. Due to patent expiries and the associated competition from generics, launch preparations for new products and regulatory changes in the markets, we had already anticipated in 2009 that we could not achieve the high growth rates of the previous years. So we made use of the time and laid the foundations for new growth". The product pipeline is well-filled as a result of our own successful research and development. In 2010, the company invested 24 percent of its Prescription Medicines sales in the R&D field, which was more than ever before (2009: 21 percent).

In 2010, Boehringer Ingelheim employed an annual average of 42,224 people worldwide (2009: 41,534), representing an increase of two percent.

Boehringer Ingelheim in Japan
Boehringer Ingelheim group of companies in Japan has been affected by the earthquake. Prof. Andreas Barner commented: "To our great relief, we have learned that our 3,000 employees in Japan are all safe. While putting priority on securing the safety of employees and their families, our activities after the earthquake continue to focus on supporting disaster affected areas, persons and stable product supply".

Research and Development - Foundation for corporate success
In 2011, the innovative drug PRADAXA® (dabigatran etexilate) will contribute to further growth for Boehringer Ingelheim. PRADAXA® has been approved in the USA and Canada since the end of 2010 for stroke prevention in patients with atrial fibrillation. At the beginning of 2011, the medication also gained approval in New Zealand, Japan and South Korea. Boehringer Ingelheim expects further approvals in Europe. Since 2008, dabigatran etexilate has in 75 countries helped patients in the prevention of venous thrombo-embolism (VTE) after hip and knee replacement surgery. The approvals now granted in the indication of stroke prevention represent a therapeutic breakthrough. Experts estimate that an optimal medicinal therapy could prevent close to a million cases of stroke per year worldwide.

"The research and development of innovative products stands in the foreground for Boehringer Ingelheim. In 2010, we have also markedly increased investment once again in research and development, despite the economically demanding situation for our company", said Prof. Barner. Boehringer Ingelheim last year invested almost EUR 2.5 billion (2009: EUR 2.2 billion) in its research and development activities, amounting to EUR 230 million more than in the previous year. Boehringer Ingelheim has also invested the bulk of the EUR 519 million in fixed assets primarily for buildings and technical facilities at its research and development sites and production.

Finances
The main pillar of turnover for Boehringer Ingelheim remains its Human Pharmaceuticals business. In 2010, this business generated 93 percent or EUR 11.7 billion of total net sales, with Prescription Medicines accounting for EUR 9.7 billion of this. Consumer Health Care, which grew by 4.5 percent in 2010, accounted for EUR 1.3 billion. This growth was mainly borne by the emerging markets. "In particular, the markets of China, Brazil and Russia overall are of great strategic significance to Human Pharmaceuticals business and are therefore the focus of our actions", underlined Hubertus von Baumbach, member of the Board of Managing Directors reponsible for Finance and Animal Health. Cash flow from operating activities declined to almost EUR 2.1 billion. On the other hand, liquidity rose once again (+EUR 729 million). "Boehringer Ingelheim managed 2010 successfully and shows healthy financing", said Hubertus von Baumbach, summarising the business year 2010.

Americas still the biggest region by sales - SPIRIVA®, MICARDIS® and COMBIVENT®
The majority of Boehringer Ingelheim's net sales are still made in the Americas Region. In 2010, it generated EUR 5.7 billion (2009: EUR 6.3 billion), or 46 percent of total net sales. Though this means a decline of 8.5 percent, due to the special situation with patent expiries in the USA, the business showed gratifying development after adjustment for the extraordinary components. Established products, such as SPIRIVA®, MICARDIS® and COMBIVENT®, showed distinct growth and were thus able to partially offset the sales losses. SPIRIVA®, a medicine for the treatment of chronic obstructive pulmonary disease (COPD) remains Boehringer Ingelheim's biggest product in turnover terms. In 2010, it achieved net sales of EUR 2,863 million, thereby growing by 19.1 percent against the previous year. MICARDIS®, for the treatment of high blood pressure, increased net sales by 11.6 percent to almost EUR 1,555 million. The product COMBIVENT®, approved for COPD and bronchial asthma, climbed 11.2 percent to EUR 727 million. In Europe and the Asia, Australasia, Africa Region (AAA), Boehringer Ingelheim increased net sales. The AAA Region showed itself to be the most dynamic market, with net sales rising by 11.6 percent. In the meantime, this increasingly important region, with net sales of EUR 2.8 billion (2009: EUR 2.5 billion), accounts for 22 percent of total net sales.

Animal Health business grows 51 percent
The Animal Health business developed particularly well last year. Its net sales rose to EUR 921 million (2009: EUR 610 million), thereby growing by 51 percent. This massive increase is attributable on the one hand to organic growth, with the swine vaccine INGELVAC CircoFLEX® in particular clearly increasing Boehringer Ingelheim’s market share, and on the other hand to the acquisition of parts of animal health business of Pfizer/Fort Dodge at the end of 2009. Animal Health’s share of total net sales in the meantime stands at 7 percent (2009: 5 percent). "In Hanover, we are currently setting up a European research centre for animal vaccines. Our whole research and development in Europe will be brought together there", said Prof. Barner. Boehringer Ingelheim also expects further above-market growth in the Animal Health business.

Expanding global presence in biopharmaceuticals
The now completed acquisition of Amgen's development and production site in Fremont, California, USA, further reinforces Boehringer Ingelheim's position in March 2011 as leading experts worldwide in developing and manufacturing biopharmaceuticals. "Our presence in Fremont is a building block in our growth strategy in the biopharmaceuticals business", Prof Barner emphasised. "The strategic decision to be represented in the San Francisco Bay area with a modern research and production facility in the biotechnology centre enables Boehringer Ingelheim to better serve its existing and future customers. In addition, the technical know-how at the Fremont site will contribute to the further expansion of our leading position worldwide in biopharmaceutical process development and production". As a fully integrated production site, Fremont will complement the existing resources and state-of-the-art technology of Boehringer Ingelheim's biopharmaceuticals network in Biberach, Germany, and in Vienna, Austria.

Outlook 2011 - Start of a new growth phase
2010 was for Boehringer Ingelheim the year in which it reached 125 years of age. The jubilee year also brought new alliances for the future. With Eli Lilly and Company, Boehringer Ingelheim will develop and market active substances for diabetes that are currently in mid and late-stage clinical development. The company announced this in January 2011. The cooperation concentrates on four, possibly five, active ingredients in the development pipeline which belong to various promising substance classes. "This cooperation combines the advantages from Lilly's expertise and pioneering history in diabetes and their won pipeline with two experimental basal insulin analogues under development at Lilly with Boehringer Ingelheim's comprehensive and innovative diabetes pipeline with active ingredients in late-stage development", Prof. Barner explained. The first approvals for the diabetes active ingredient linagliptin are expected already this year. Linagliptin is a dipeptidyl peptidase-4 inhibitor discovered by Boehringer Ingelheim for treating type 2 diabetes.

The markets in the developing countries and in the Asia-Pacific region have great strategic importance for Boehringer Ingelheim in the future. A forecast for this region in 2011 is at present not possible because of the current events in Japan.

Overall, the transition will take place this year to a new growth phase for Boehringer Ingelheim, according to Prof. Barner. "Not least thanks to its committed and well-educated employees and a convincing product pipeline, the history of success of Boehringer Ingelheim will continue with new medicines that give patients convincing therapeutic advantage in the treatment of their illnesses".

For 2011, Boehringer Ingelheim expects robust overall growth of mid-single digit percent.

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