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Press Release
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Boehringer Ingelheim Again Outpaces the Market Marked Increase in Employees Worldwide / New Products with Big Growth Potential
Ingelheim, 30 March 2004 - Boehringer Ingelheim once again showed stronger growth than the total pharmaceutical market in 2003. This was the tenor of the report presented by the international pharmaceutical group at its annual press conference in Ingelheim, Germany, today. Dr Alessandro Banchi, Chairman of the Board of Managing Directors, responsible for the Corporate Board Division Pharma Marketing and Sales, described the company's business development as dynamic and positive: "Once again we posted sound growth which is not so far behind the excellent business year of 2002."
Dr Banchi explained that Boehringer Ingelheim last year ranked sixth among the top 20 major international pharmaceutical groups in terms of market growth. According to the figures of the pharmaceutical market research institute IMS, Fairfield, USA, which concentrate primarily on prescription medicines, Boehringer Ingelheim posted 12.1 percent growth, compared with a market average of 9 percent. On the US market, the company's most important market, Boehringer Ingelheim posted a remarkable 16.1 percent increase, according to IMS, (market average 11.1 percent), with an increase of 12 percent in Europe (market = 8.1 percent) and 4.8 percent in Asia/Australia/Africa (market = 4.9 percent). Growth in Germany amounted to 9 percent, or 0.5 percentage points above the market.
Positive Outlook in Terms of Sales and Income
Prof. Marbod Muff, Member of the Board of Managing Directors responsible for the Corporate Board Divisions Finance and Human Resources, painted a positive picture of the future development of the company.
Although sales in 2003 were (in euro) 2.6 percent lower at 7.4 billion euro/USD 8.368 billion (2002 = 7.6 billion euro/USD 8.043 billion) and operating income as much as 16.7 percent lower at 901 million euro/USD 1.02 billion (2002 = 1.08 billion euro/USD 1.02 billion), this was due to the strength of the euro and mainly to planned investments: into the strong increase of sales force and in important new products. However, following adjustment to take account of currency rates, that is to say in the local currency of the respective markets, Boehringer Ingelheim posted growth of 7.8 percent. At 537 million euro/USD 607 million, income after tax only fell slightly short of the year-ago figure (551 million euro/USD 520 million).
The company expects a rise in sales of over 10 percent in local currency in the current business year. Although Prof. Muff mentioned the "planned sales reduction" to be continued through 2004 in the wake of high advance investment in the future growth of Boehringer Ingelheim, the medium-term plans show again a "steady increase in earnings power" and hence continuation of the dynamic sales development of recent years. Again, Boehringer Ingelheim was able to increase the value of the company considerably over the last year.
There was also a marked rise in the number of employees in 2003 with an increase worldwide of 7.5 percent to a total of almost 34,200. That is around 2,500 more than a year ago. Of these, some 600 were recruited in Germany, where the total is now almost 9,900. This was due less to the market environment in Germany, which Boehringer Ingelheim described as barely conducive to innovation and investment, than to new products, such as SPIRIVA® or MICARDIS®PLUS and the expansion of biotechnical production in Biberach, in which Boehringer Ingelheim invested 255 million euro/USD 288 million, giving rise to almost 400 new jobs. Biopharmaceuticals is one of the company's economically most successful business segments.
New Products to Secure Future Sales
Patented products account for an increasing percentage of the product portfolio of Boehringer Ingelheim. While these accounted for less than 30 percent at the end of the 1990s, they accounted for 44 percent by 2003. Next year, this figure is expected to rise to over 50 percent. New products such as SPIRIVA® or MICARDIS® have still to exploit their full sales potential. Dr Banchi described the situation of Boehringer Ingelheim as "extremely comfortable".
Although spending on research, development and medicine was reduced last year by around 10 percent to almost 1.2 billion euro/USD 1.4 billion, the currency component again played a central role here. If R&D spend is seen in relation to the Prescription Medicines business segment, which accounted for the bulk of expenditure, then R&D spending again corresponded to over 20 percent of sales Dr Banchi explained. He described Boehringer Ingelheim as a "research-driven company" whose interest focuses on the research and development of new products for patients.
The bestselling product in 2003 was once again FLOMAX®/, ALNA® (tamsulosin) a drug to treat benign enlargement of the prostate which, with growth of over 16 percent, totalled 880 million euro/USD 995 million (2002 = 756 million euro/USD 714 million). The selective alpha-1-receptor antagonist is market leader in the USA and still offers further sales potential.
Boehringer Ingelheim pins great hopes on SPIRIVA®, a drug to treat the chronic obstructive airways disease COPD, currently estimated to affect 600 million people worldwide and expected to be the third most common cause of death by the year 2020. SPIRIVA®, a product of Boehringer Ingelheim research that is co-promoted worldwide with Pfizer, generated sales of 240 million euro/USD 271 million last year. Following launch in the USA and Japan, scheduled for 2004, Boehringer Ingelheim expects SPIRIVA® in 2005 to become the company's first-ever blockbuster product (sales of over 1 billion US dollars).
The company is also optimistic that MICARDIS® (telmisartan), a drug to combat high blood pressure, could show blockbuster potential. The large-scale ONTARGET® study programme which has already recruited around 31,000 patients, aims to demonstrate that MICARDIS® can protect organs such as the brain, the heart or the kidneys. Sales of this angiotensin II blocker rose last year by 36 percent to almost 470 million euro/USD 531 million (2002 = almost 350 million euro/USD 331 million). Further development potential is also seen in the anti-Parkinson's disease drug SIFROL® (pramipexole), a dopamine-agonist, which is to be approved for further new indications, including restless legs syndrome.
Pipeline products in the advanced stages of development include Boehringer Ingelheim's anti-AIDS drug tipranavir, a protease inhibitor whose strength lies in fighting HIV strains resistant to other therapy, and duloxetine, a product developed by Eli Lilly. Tipranavir is scheduled for launch in 2005/2006.
Duloxetine has already been filed for registration in two indications. The first, stress urinary incontinence, generally develops following pregnancy and is estimated to affect one in every ten women. More than 120 million people across the world suffer from depression, the second indication. Eli Lilly and Boehringer Ingelheim plan to jointly commercialize this product which is due for launch in both indications in 2004/2005.
The People Make the Difference
Prof. Muff explained that the "most attractive and best business ideas and product portfolios" can only guarantee success against the competition if they are "backed by sound, strong and flexible financial resources" at the company.
Liquid reserves increased last year by about 30 percent to 3.5 billion euro/USD 4 billion). The long-term capital available (shareholders' equity and pension provisions) accounts for over 60 percent. According to Muff's balance sheet, Boehringer Ingelheim enjoys a "very sound business and financial basis".
Yet, the company's employees are the real "source of success". Muff highlighted the vibrant corporate culture that is not only described in its aims, values and leadership principles, but also truly lived at Boehringer Ingelheim and the attractiveness of the company for its employees. Employee surveys conducted by independent institutes led to excellent ratings in many countries. The most recent example is the survey run to establish "Germany's best employer 2004" sponsored by the economic journal Capital, in which Boehringer Ingelheim was voted best employer (in the class of companies with over 5,000 employees). Prof. Muff's conclusion: "It is the people that make the difference".
Related links at www.boehringer-ingelheim.com:
Annual Report 2003 (pdf, 1.38 MB)
Highlights of the Annual Press Conference
Contact:
Judith von Gordon
Corporate Division Communications
Boehringer Ingelheim GmbH
55216 Ingelheim
Phone: + 49/6132/77 35 82
Fax: + 49/6132/7766 01
E-mail