The Quest of the Ambitious New Generation of Family-Run Boehringer Ingelheim

Published: Jul 18, 2017

The Quest of the Ambitious New Generation of Family-Run Boehringer Ingelheim July 17, 2017
By Alex Keown, Breaking News Staff

INGELHEIM, Germany – The younger generation Boehringer family wants to make bold and aggressive choices when it comes to driving the future of the 132-year-old drugmaker that bears its name.

The family members now in charge of Boehringer Ingelheim have set an ambitious goal of boosting revenue by 60 percent over the next eight years. That objective would give the company about $28.5 billion in annual revenue and put it among the top 10 pharma companies in the world. But, a recent exposé in Bloomberg pointed to a company that has resisted taking those bold steps and also veils itself in a shroud of familial secrecy. Even the goal of increasing revenue by 60 percent was presented internally, Bloomberg said.

While Boehringer has growth plans, the family-controlled company has not opened itself to outside investors, which has hindered some of that potential and aggressive growth capabilities the younger Boehringers are seeking. Even as it seeks to compete with the largest pharma companies, such as Pfizer and Bristol-Myers Squibb , Boehringer has “repeatedly ruled out selling shares in an initial public offering, closing off one avenue that would allow it to make bigger bets,” Bloomberg said.

In the Bloomberg article, Boehringer’s Chief Financial Officer Simone Menne said the company prefers to operate with the “freedom” that comes from not being answerable to outside financiers. Additionally, Menne told Bloomberg that Boehringer can achieve its financial goals if it maintains the annual growth rate it has had since 2005. If it does so, that revenue stream could be met even without large acquisitions, Menne said.

The company has largely been content to develop its own drugs, but has not totally closed itself off to dealmaking.

According to Menne, the Boehringer family does not measure growth by quarterly reports. Instead, Menne said the shareholder committee measures the company according to whether its profitability and pipeline of new medicines are competitive with the market average, looking three to five years into the future.”

Some of that growth could come from its drug Praxbind, which recently demonstrated a reversal of the anticoagulant effect of the company’s blood thinner medication Pradaxa. In June, the company said its Phase III biosimilar candidate BI 695501 demonstrated clinical equivalence of AbbVie’s leading rheumatoid arthritis drug Humira.

The company has also taken steps to become a leader in animal health. That area was opened up after the German company acquired Merial in a strategic deal with Sanofi. In December 2015, Sanofi and Boehringer Ingelheim agreed to an asset swap, trading Merial for BI’s consumer healthcare unit.

Last year, Eli Lilly &Company ’s animal health unit Elanco U.S. struck an $885 million deal with Boehringer Ingelheim Vetmedica to acquire a portfolio of canine, feline and rabies vaccines, as well as a fully-integrated research and development site.

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