Boehringer Ingelheim Expressed “Confidence in the Future” With Recording Positive Momentum in 2020 and Expanding R&D Investment

Published : Friday, March 26, 2021, 3:16 pm
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 On the afternoon of the 24th, Boehringer Ingelheim held an online annual press conference and announced the progress of its 2020 annual results and business plans. The event was attended by Hubertus von Baumbach, Chairman of the Board of Managing Directors, and Michael Schmelmer, the Member of the Board of Managing Directors responsible for Finance and Group Functions.

Currently, 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, the University of Marburg, and the German Center for Infection Research the initiation of Phase I/IIa clinical investigation of BI 767551. BI 767551 is the first SARS-CoV-2 neutralizing antibody administrated via inhalation as a potential new therapeutic and prophylactic option to block the virus at the site of infection. Other COVID-19 initiatives include the research and development of SARS-CoV-2 antibodies that can be combined with BI 767551, small molecules to inhibit its replication, and therapy development to prevent microcoagulation.

▲ Hubertus von Baumbach, Chairman of the Board of Managing Directors of Boehringer Ingelheim

Hubertus von Baumbach stated that last year Boehringer Ingelheim drastically expanded its R&D investment by promoting the development of innovative medicines and treatments for diseases that do not yet have enough cures. In particular, the company accelerated efforts to research candidates for treatments related to COVID-19, and the total annual R&D investment in 2020 was 3.7 billion EUR, an increase of 7% from the previous year, the highest amount ever in the history of Boehringer Ingelheim for 136 years. Baumbach expressed his ambition, "2020 was a year that reaffirmed Boehringer Ingelheim's long-term R&D vision, and we try to move forward with greater confidence in the future."

“The COVID-19 pandemic became an opportunity to find out what direction science is developing and how to contribute, and which field opportunities can be seized rather than risks. Recognizing the urgency of response to COVID-19, we started R&D on therapeutic candidates from the beginning of the first quarter of 2020. Research is underway with several partners around the world for patients,” Baumbach said. “Boehringer Ingelheim's executives and employees have continued to provide medicines and support medical staff to patients and animals. The achievements in 2020 are the result of our employees' efforts.”

Besides, Baumbach emphasized the importance of partnership. “Looking back in 2020, Boehringer Ingelheim cannot help appreciating the support received from our partners. Funds and supplies have been provided in many countries around the world, helping COVID-19 patients and communities quickly and efficiently.” Also, “The recent partnership agreement between Boehringer Ingelheim and Google Quantum AI will be an opportunity to bring together all the necessary resources by combining our medical expertise with the algorithms of Google Quantum Computer.”

Meanwhile, 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%, with net sales of 4.12 billion EUR. Baumbach explained, “Since Boehringer Ingelheim made a strategic decision to pay more attention to the field of animal health and veterinary medicine in 2016, we have continuously strived to develop synergies based on our knowledge between human and veterinary medicines.”

▲ Michael Schmelmer, the Member of the Board of Managing Directors responsible for Finance and Group Functions of Boehringer Ingelheim

Michael Schmelmer gave a detailed introduction to Boehringer Ingelheim's performance in 2020, as well as business status including M&A and R&D.

“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,” Schmelmer said. Also, “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 oncology as well as digital and data technologies.”

According to the presentation, operating income at the Group level rose to 4.62 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. Cash flow from operating activities increased by 619 million EUR to 3.96 billion EUR. At the end of 2020, the equity ratio stood at 47%. Moreover, the company invested 1.05 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.

Last year, Boehringer Ingelheim conducted several M&As to expand its portfolio through selection and concentration. In July, the company announced the acquisition of Global Stem cell Technology (GST), a Belgian veterinary biotech company, to develop and produce state-of-the-art stem cell products for horses and pets. In September, an equity stake in the China-based New Ruipeng Group, a company that specializes in providing medical care services for pets, was acquired. In December, the company announced the acquisition of all shares of NBE-Therapeutics, a clinical-stage Swiss biotechnology company focused on antibody-drug conjugates and advancing targeted cancer therapies derived from its immune-stimulatory iADC™ platform.

Wrapping up the presentation, Schmelmer revealed the outlook for 2021. “2021 will be a year in which we continue to cope with the challenges posed by COVID-19. The difficult industry environment caused by increasing price pressures in several major markets is expected to affect 2021 earnings. 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.”

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