A family business: Pradaxa success lifts Boehringer
pharmafile | April 25, 2012 | Feature | Research and Development, Sales and Marketing | Boehringer Ingelheim
Rapid uptake of anti-clotting drug Pradaxa in the US has helped Boehringer Ingelheim enjoy a strong year, and looks set to be a long-term engine for growth.
Headquartered in Ingelheim in south west Germany, the firm is exceptional among larger pharma companies because it is family-owned and not listed on any stock market.
Boehringer’s chairman is Professor Andreas Barner who is also highly unusual among pharma leaders – while most chief executives were trained in law, finance or marketing, Barner has a research science background. Even more exceptional is that Barner is also head of R&D operations, and maintains a hands-on role in drug development.
The company continually stresses that its unique set-up allows it to not be pressured to hit short-term profits goals like its listed rivals. This is reflected in the company’s R&D expenditure (€2.51 billion, $3.31 billion) which represents a massive 23.5% of its prescription medicines net sales, far higher than its peers.
While it is difficult to say Boehringer Ingelheim has thrived precisely because of its unique approach, it is most definitely on a winning streak.
It enjoyed an exceptional period of growth for ten consecutive years up to 2009, posting sales rises above the pharma sector average in each of these years. The COPD drug Spiriva discovered by Boehringer and co-marketed with Pfizer has been the biggest single driver for growth over that period, which it continued in 2011, annual sales rising 10% to €3.15 billion ($4.15 billion).
The firm’s growth dipped in 2010 as it faced patent expiries, but it has now bounced back, returning to above average growth of 6.2%, achieving group sales of €13.2 billion in 2011.
The highlight of 2011 was the success of the oral anticoagulant Pradaxa (dabigatran) which now looks set to eventually match or surpass Spiriva. The drug has enjoyed a rapid uptake in its first full year on the market, achieving sales of €629 million in the year. This has given it a head start over rivals such as Bayer’s Xarelto (rivaroxaban) and Pfizer and BMS’s yet-to-be-approved apixiban.
While most of its European and US peers publish their 2011 results in late January or early February, Boehringer is able to take a more relaxed approach, unveiling results in late April and only publishing updates twice a year, rather than the conventional quarterly updates.
“The 2011 results confirm our strategy of organic growth,” said Barner, at the annual press conference at the corporate HQ in Ingelheim. The company proclaimed that its ‘highly competitive research’ was ensuring its independence as a family-owned company.
“Thanks to our continued investment in our own research and development, we are starting a new period of growth,” added Barner.
It is not all plain sailing for the company, however. Most notably, there are some concerns about the safety of Pradaxa. In November last year, the company confirmed 260 fatal bleeding events worldwide between March 2008 and October 2011.
Regulators in Europe and the US have reacted calmly to the news, however, initial reactions from the EMA and FDA indicating that these levels were within the anticipated range.
Meanwhile, the firm is also still at loggerheads with the German government over the new pricing and health technology assessment system.
Boehringer and its marketing partner Eli Lilly have refused to launch their new diabetes treatment Trajenta (linagliptin), arguing that the country’s new system does not assess innovative medicines fairly.
While Boehringer are as incensed by the system as other pharma companies, Barner would not get drawn into making threats about withdrawing R&D from Germany.
Restating the company’s 125-year commitment to research in Germany, Barner said it would remain its base: “it’s not easy to relocate to other markets” and said he was ‘optimistic’ a solution to the pricing and reimbursement row would emerge.
In terms of its R&D pipeline, Boehringer’s belief in its high-spending, long-term vision is strong – and it could yet produce further blockbusters to accelerate growth.
The company recently unveiled promising Phase II results for a dual combination treatment for hepatitis C which would be the first-ever interferon free regimen if approved. Used together, the once daily protease inhibitor BI 201335 and the polymerase inhibitor BI 207127 could be a major step forward, as treating the virus without interferon would make treatment simpler and quicker.
Future success of this and other pipeline drugs (including treatments for lung cancer and Alzheimer’s disease) would be a vindication for Boehringer’s alternative approach to running a pharma company, showing that a shareholder driven firm isn’t the only way to produce innovative new drugs in the 21st century.
Andrew McConaghie
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