Media Coverage

Joachim Hasenmaier: '2017 was the hardest year of my career but we still did very well'

Apr 30, 2018 - Animal Pharm
By Joseph Harvey
Animal Pharm
April 30, 2018

Following Boehringer Ingelheim's annual press conference, Animal Pharm editor Joseph Harvey spoke to the company's head of animal health about the ongoing integration of Merial and the division's R&D plans.

The results of the Merial acquisition are clearly apparent in Boehringer Ingelheim's latest set of financial figures. However, the work on the transaction has not yet finished.

"Integration of a transaction this size is more a marathon than a sprint," Joachim Hasenmaier told Animal Pharm. "We had the luxury of a lot of planning time."

Boehringer Ingelheim set itself two major goals when dealing with the integration. Firstly, the company wanted as little disruption for its customers as possible. Secondly, it did not want to lose a single client to its competitors during the lengthy integration process.

To achieve these goals, the firm used a strategy of "one face to the customer". Boehringer Ingelheim projected a united brand to its customers as quickly as it could after the closing of the business swap with Sanofi to acquire Merial in exchange to its consumer healthcare business. Then, in the background, a whole host of employees have been involved in 'behind-the-scenes' work to align the two firms' resources and consolidate them into one corporation.

Dr Hasenmaier said this process has touched on every contract and product registration owned by both companies.

He stated: "Was 2017 the toughest year of my career? Yes. But we still did very well. Are we out of the woods? No. But we want to be 80% out of the woods by the end of this year."

He pointed out Merial's assets need to be completely separated from Sanofi before the end of 2018.

"We have done well," Dr Hasenmaier stated. "We cleaned up trade inventories and I'm very pleased with how we defended our brands. The integration is like climbing a mountain. We have our path to the top and we have to find the right pace. I'm confident we have found our rhythm."

Number one aspirations?

Boehringer Ingelheim is now a leading player in the antiparasitics sector and the veterinary vaccines market. Plus, it is the biggest animal health company in many major geographic markets such as Asia.

"If we do all the right things for our customers, if we bring innovation to the market, we will grow above market rate and then could eventually grow to be number one."
With this in mind, Animal Pharm asked Dr Hasenmaier if it had aspirations to become the outright industry leader?

"If you're number two in any industry, of course you want to be number one," he replied "But what we do is more important than being number one. If we do all the right things for our customers, if we bring innovation to the market, we will grow above market rate and then could eventually grow to be number one. Of course, I don't know what big acquisitions the other companies might make."

Broadening horizons

The key changes to the firm's portfolio since its acquisition of Merial have been in companion animals, poultry, the US, China and Latin America. Dr Hasenmaier said it would have been tough to bring about such instrumental changes in these areas without the Merial deal.

While the Merial deal boosted Boehringer Ingelheim's commercial product offering, the company now wants to extend its reach in other sectors.

"If you want to shape a market, you have to invest way beyond products," Dr Hasenmaier noted. "We still invest 90% of our R&D budget in vaccines, antiparasitics and therapeutics. But now, we're exploring other spaces."

Two areas he outlined were on-the-spot diagnostics and digital tools. The latter category "is on the move" said Dr Hasenmaier, who highlighted the upcoming merger of Henry Schein Animal health and Vets First Choice as a prime signal of digital technology's ever-increasing presence in animal health. Boehringer Ingelheim is working with its BI X lab to develop digital tools for the animal health sector amongst other things.

Diagnostics an entrepreneurial play

Regarding the firm's recent pact with Leukocare, Dr Hasenmaier said the deal allowed Boehringer Ingelheim to bring in technology to support its diagnostics platform.

The company has been putting together diagnostic assets for a while now. In 2014, it licensed chip technology from Siemens for use in point-of-care veterinary diagnostics. Additionally, the firm's Swanova business offers immunological testing and it owns diagnostics laboratories to support its vaccine businesses – particularly in the US and Germany.

Dr Hasenmaier suggested there is more to come from Boehringer Ingelheim in the veterinary diagnostics space: "This is an entrepreneurial play and we're in the pilot phase."

Consumers and better monitoring

While Boehringer Ingelheim is moving further into new areas of technology, its R&D pipeline will always support the company's over-arching emphasis of "improving animal wellbeing through preventative care".

The company has a strong offering of prevention products and relatively little antibiotics. Thus, it is primed to tackle a decline in farm's usage of antibiotics.

"We believe animal welfare and consumers will play a bigger role in animal health," he said. "We need to improve the monitoring of animals and tailor vaccination for specific farms. This is still a 'black box' but we see precision farming moving from the crop side to the animal health side. We need a broader tool box to make this vision a reality.

"My father had 25 cows and could see if one was ill immediately. But now, if a farmer has 1,000 cows, there is technology available that helps dairy farmers know exactly what's going on with each individual animal."

Wide-ranging external partnerships

Dr Hasenmaier said the company's external partners cover a broad range of areas – even sectors where the animal health business unit is already strong.

For example, despite being a leading veterinary vaccine manufacturer globally, Boehringer conducts little basic research into biologicals. Early-stage research on vaccines is often licenced from partners.

Dr Hasenmaier also highlighted Boehringer Ingelheim's work in the live therapeutics space, with its first commercial products in poultry under a strategic collaboration with Danish firm Novozymes as being a key example of external partnering.

The firm is also scanning the crop protection industry for "compounds with early signals of efficacy". This mixed model for R&D, which combines in-house work with external innovation, was introduced through the Merial deal.

Strong growth in markets outside of Europe

China is now the second biggest market for Boehringer Ingelheim's animal health business.

"Eventually, China is going to be bigger than the US."

Dr Hasenmaier said: "Absolute market growth in China will be as high as the US in the coming 10 years. Eventually, China is going to be bigger than the US."

The company's intentions in China were highlighted last month when it partnered with two local firms to focus on the development of new foot-and-mouth disease vaccines. Dr Hasenmaier has previously outlined the company's plan for greater ground presence in China.

Aside from China, he told Animal Pharm he forecasts growth in south east Asia, the Middle East, Africa, Latin America and the US. However, he pinpointed Europe as currently the most difficult market with an aging society and several markets still recovering from the last economic downturn.

Reprinted with permission of Animal Pharm News




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