Media Coverage

Boehringer underlines ascent to the top with more-than-doubled annual sales

Apr 25, 2018 - Animal Pharm
By Joseph Harvey
Animal Pharm
April 25, 2018

Boehringer Ingelheim Animal Health has confirmed its rise to become the industry's second-largest player with 2017 sales of €3.9 billion ($4.75 billion). 

The firm is now around $550 million behind Zoetis in the animal health industry rankings, which marks the smallest gap between the sector's top two businesses since 2010 (when Merck Animal Health was approximately $600m behind Pfizer Animal Health).

Boehringer is only the second animal health company to report annual revenues over $4bn. This is the first full year since Boehringer closed its acquisition of Merial, with the transaction helping revenues rise 167% over the course of the 2017.

The firm told Animal Pharm it reported 1% sales growth in the year of integration when factoring out the Merial acquisition and the product lines that were spun-off due to anti-trust regulations. Michael Schmelmer, the company's chief information officer, said it is very unusual for a company to go through such a large acquisition integration process and still report underlying growth.

At the company's Ingelheim headquarters, chief executive Hubertus von Baumbach said the Merial integration had been a demanding undertaking both internally and for the firm's external partners.

He indicated Boehringer's human and animal health businesses will now be focusing on organic growth. Mr von Baumbach said the company is currently not seeking any "major M&A" but did not rule out any small deals.

New status confirmed

The impact of the Merial transaction is now being reflected in Boehringer's new status as a market leader across many segments. It is now the largest company in terms of global sales of products for companion animals, horses and pigs.

Boehringer is also the third-largest firm in the poultry health sector and fourth in cattle. It is also the leading business for vaccines and antiparasitics – the two product categories driving the company's focus on preventatives.

From a geographic perspective, as well as being the biggest European animal health business, Boehringer is the top international veterinary medicines firm in China. Boehringer also told Animal Pharm it is now the largest animal health company in Mexico.

Animal health now represents 22% of overall Boehringer group turnover. Last year, the animal health portion was 9% of Boehringer annual sales.

Boehringer's top-selling products now feature several important former Merial brands. Nexgard is the company's best-selling product generating €546 million in 2017, followed by Frontline at €381m and Heartgard at €284m.

The firm's swine vaccine Ingelvac Circoflex recorded revenues of around €300m, which was a year-on-year improvement of 7%.

Strategy for growth and investments

The company, which now has 10,000 employees, highlighted three key areas for the growth of its animal health business. It will focus on product innovation, as well as the combination of research in human and animal medicine – something the company is already working on in the area of diabetes.

Mr von Baumbach used Apoquel from Zoetis as an example of how a product originally from the human health sector can "lead to a breakthrough".

"There are even fewer companies now that have human health and animal health research," he said. "We are making an effort to get people to sit at the same table and talk about potential solutions."

Interestingly, the third pillar of the firm's strategy is "new digital platforms to establish direct connections between users of our medications".

Across 2017, Boehringer invested €65m on new R&D plants and the expansion of existing facilities. Recently, the company signalled investment in its infrastructure in France and the US.

The company initiated over 500 clinical trials during 2017. It also registered more than 80 patents and gained around 200 product authorizations globally.

Boehringer's historical sales performance

According to Animal Pharm's Industry Rankings, Boehringer was the 19th largest animal health business in 1990, with sales of just $107m. By 2000, the firm had risen to 17th with turnover of $275m.

Animal Pharm's latest top 20 industry rankings will be published next week.

The infographic below shows how Boehringer has evolved over the last decade. The company has only failed to record annual sales growth once in the last 10 years.

Reprinted with permission of Animal Pharm News




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