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.
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%).
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.
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), with net 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.
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.