sees positive business momentum in 2020 despite impact of COVID-19
- Strong R&D commitment to developing therapeutics against SARS-CoV-2 virus
- Overall R&D investment up 7% to 3.7 billion EUR in 2020 (18.9% of net sales)
- Positive business performance despite the impact of COVID-19 pandemic
- Total human pharmaceuticals and animal health net sales in 2020 across the Middle East, Turkey, and Africa witnessed 11% growth
- Outlook 2021: only moderately optimistic in view 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 to help,” said Hubertus von Baumbach, Chairman of the Board of Managing Directors. “Together with many partners worldwide, this work is ongoing for the benefit of patients infected with the virus.”
Mohammed Al-Tawil, Country Managing Director and Head of Human Pharma at Boehringer Ingelheim Middle East, Turkey and Africa (META) stated, “Despite the challenges brought about by the ongoing COVID-19 pandemic, the total human pharmaceuticals and animal health net sales in 2020 across the Middle East, Turkey, and Africa witnessed an impressive 11% increase in comparison to that of 2019. This is a testament to the company’s unwavering commitment towards improving human and animal health across the region, and the tireless efforts of our teams to overcome challenges faced. As a family-owned company, we will continue to embrace the latest innovations and technologies, while working together with partners to strive towards accelerating the availability of innovative and effective healthcare products and services aligned with our top priority:; the safety and wellbeing of our patients, and the wider betterment of our communities.”
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 (UKK), the University of Marburg (UMR), and the German Center for Infection Research (DZIF) the initiation of Phase I/IIa clinical investigation of BI 767551, a SARS-CoV-2 neutralizing antibody and potential new therapeutic and prophylactic option to reduce the potential risk and effects of a COVID-19 infection. Other COVID-19 initiatives include the research and development of SARS-CoV-2 antibodies that can neutralize the virus, small molecules to inhibit its replication, and therapy development to prevent micro coagulation (blood clots).
Solid performance despite COVID-19 pandemic
2020 was yet another 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 globally 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.
The Middle East, Turkey and Africa region also witnessed considerable business growth despite the impact of the ongoing pandemic that the region has been faced with since 2020. The company recorded total net sales of 515 million EUR, an 11% increase compared to the 2019 year. The breakdown of the Net Sales are of 383 million EUR for Human Pharma and 132 million EUR Animal Health respectively.
During 2020, Boehringer Ingelheim META’s immense efforts secured it recognition as the second fastest growing pharmaceutical company across the top 25 pharmaceutical corporations in the region, further ranking 14 among the top 25 multinational pharmaceutical companies in 2020, Boehringer Ingelheim META, human pharma business recorded a total growth rate of 20%.
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 quite pleased with the results we achieved in 2020, considering the challenging conditions we faced,” said Christoph Raab, Head of Finance and Administration at Boehringer Ingelheim Middle East, Turkey and Africa. “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 digital and data technologies, oncology and infectious diseases.”
Continued high investments in fixed assets
Boehringer Ingelheim, Middle East, Turkey and Africa had significantly invested into its local manufacturing capabilities and secondary packaging projects across its META markets including Algeria, Turkey, and the Kingdom of Saudi Arabia.
Additionally, the company made investments in its market presence and legal entities across the META region, including moving to new offices in various markets to accommodate for the increase in business operations as well as the number of employees in across the region. Boehringer Ingelheim now has legal offices in the United Arab Emirates, South Africa, Turkey, Lebanon, Kuwait and Qatar, with legal entities in Saudi Arabia, Turkey and South Africa, and scientific offices present in Algeria and Egypt, with a plan to extend in Morocco and Kenya.
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 including META.
Medicines for the treatment of cardiovascular and metabolic diseases, as well as respiratory diseases, remain the most important contributors to net sales globally. For instance, Boehringer Ingelheim’s diabetes 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). This medication reduces the risk of cardiovascular death in adults with type 2 diabetes who have known cardiovascular disease.
The company’s pulmonary fibroses diseases medication 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). This medicine is used 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 pets’ 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) by posting net sales of 4.12 billion EUR. The pet antiparasitic segments in particular developed successfully and outperformed expectations. EUR). The parasiticide NEXGARD® remained the company’s best-selling product, with growth of 12% (year on year and adjusted for currency effects) and net sales of 804 million EUR.
Within its META markets, Boehringer Ingelheim’s Animal Health business has improved health in the livestock, equine, and poultry industries, through operating in 69 countries, with 62 distributors and agents and 28 commercially active countries across the region. The META region currently stands at number seven in the company’s overall Animal Health business worldwide and is the second-fasted growing animal health company in META.
Furthermore, as a result of Boehringer Ingelheim’s commitment to fostering an integrative, welcoming and motivational corporate culture, for the safety and wellbeing of its employees, the company earned numerous awards regionwide. For instance, the company was recognized as ‘Top Employer in Saudi Arabia in 2021’ by the prestigious Top Employers Institute, due to its long-term strategic orientation, its modern management culture as well as strong employee communication practices. Boehringer Ingelheim Algeria also earned the award of “Best Place to Work” for 2019 to 2020, and Boehringer Ingelheim Turkey received the “Great Place to Work” award in 2019 and 2020.
During 2020, Boehringer Ingelheim also launched numerous initiatives in the region in line with the company’s values and commitment towards fostering an inclusive, supportive, and healthy work environment. This included the launch of its Parental Leave across META, to support its commitment towards diversity and inclusion, as well as reinforce the company’s values of supporting employees to maintain a healthy balance between work and family life.
In acknowledgment of the impact of the ongoing COVID-19 pandemic on the work and private lives of employees, Boehringer Ingelheim also provided a period of collective time off globally, including META, for all employees by the end of 2020 to relax, recover and re-energize.
Additionally, Boehringer Ingelheim was able to raise its ranking in the bi-annual global Access-to-Medicine Index 2021 by two positions for the second time. The company ranked 12 amongst 20 of the largest pharmaceutical companies, for its ongoing effort to overcoming barriers to access to healthcare, especially for vulnerable groups and communities in lower-to-middle-income countries.
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 approvals 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/