“Our growth was … five times the market growth rate”

Focused on innovation

Boehringer Ingelheim Japan

Text by Gavin Blair  /  Photo by Kageaki Smith

In April, German-headquartered global pharma firm Boehringer Ingelheim reported worldwide sales growth for 2016 of 7.3% to €15.9 billion, and a jump in operating income to €2.9 billion. This success was driven in no small part by its commitment to innovation, evidenced by the €3.1 billion it spent on R&D.

“That is one of the benefits we have as a company that is not listed on the stock exchange,” says Thorsten Pöhl, president of Boehringer Ingelheim Japan, referring to the lack of pressure for short-term profits from shareholders at the family-owned firm.

The company posted local sales of ¥258.6 billion, the highest since it established Japanese operations in 1961 and the culmination of 14 years of consecutive growth.

“We outgrew the market — which grew by 0.2%,” explains Pöhl. “Our growth was 1%, which doesn’t sound spectacular, but it’s five times the market growth rate.”

Globally, the company invests around 20% of its sales revenue in R&D, including through alliances with other companies and with academia.

“We know we can’t find all new mechanisms ourselves, so we need to be very well-connected,” says Pöhl.

“This brings me to one of my hobby horses, that we are investing a lot of that in Japan,” Pöhl adds. “We believe in the strength of science and academia here, which was evidenced by the last two Nobel prizes for medicine going to Japanese researchers. We are the only multinational pharmaceutical company doing real R&D in Japan for our global operations.”

One guiding light in the company’s approach to R&D is what it calls RBB, research beyond borders, which refers to the absence of both geographical and conceptual constraints.

“In RBB, we are working with Kyoto University and looking at the area of hearing loss, which is beyond our usual R&D scope,” states Pöhl.

A major cause of hearing deterioration is the loss of the tiny hairs that convert sound to impulses that the brain can read, according to Pöhl.

“Humans cannot grow new hairs, but birds can actually do that; we need to find out why they can and if it is possible for humans to do so as well,” says Pöhl, who notes that the research is not specifically looking at birds but, rather, is investigating the mechanisms involved.

While such research may bear fruit down the line, a more immediate concern is the regular expiration of patents in the pharmaceutical industry. This allows cheaper generic versions of treatments to hit the market, making an impact on profitability.

“So, either we have new products that really bring value to doctors and patients, or we go out of business,” states Pöhl.

In recent years, Boehringer Ingelheim has launched a number of new products that Pöhl describes as delivering “improvements to the status quo for patients, or even therapies that have not been available for certain groups.”

These include OFEV, a treatment for idiopathic pulmonary fibrosis, a life-threatening lung condition; and Jardiance, a product to lower blood-sugar levels for diabetics. Jardiance has shown a 38% reduction of cardiovascular death — the first oral anti-diabetic treatment to do so, according to Pöhl. It also brought Prizbind to market, a complementary treatment to its anticoagulant Prazaxa product. Prazaxa thins blood to help prevent strokes, while Prizbind rapidly reverses that process, and is administered if a patient requires emergency surgery — which cannot be conducted if blood doesn’t coagulate.

Those products, too, will one day be joined on the market by generic alternatives, which Pöhl says the company accepts as “an important element” in the market.

“However, we decided our job is to come up with new innovative products, so we have stopped producing generics,” states Pöhl. “We believe it’s either/or, and it’s very difficult to be in both worlds. Everything we do is focused on innovation; if you’re in generics you have to be focused on costs. So, we divested ourselves of our remaining generics operations, which were in the United States.”

The divestment was part of a strategic realignment, which saw an asset-swap with Sanofi in 2015, whereby the French pharma took Boehringer Ingelheim’s consumer healthcare division in return for its animal health business Merial. The integration of Merial with Boehringer Ingelheim’s animal health operations is moving ahead smoothly, according to Pöhl.

“The key thing is that our portfolios are completely complementary,” he explains. “We have been stronger in livestock products, whereas they have been historically stronger in pet products.”

Pet health products bring benefits to humans, suggests Pöhl, because of the way pets often act as companions for people, “so when we help the pet, it has a positive influence on human health.”

One example of this is NexGard Spectra, which treats heartworms, fleas and ticks — three problems that particularly effect dogs in summer — in a single treatment. Japan has become the top global market for the product.

Research into livestock treatments also benefits humans, according to Pöhl.

“Livestock are, to a huge extent, being treated with antibiotics — not just for treatment, but also prevention”, says Pöhl. “This is very bad for humans because it has a big effect on the resistance of bacteria to antibiotics.”

And there are many who die as a result of being infected with bacteria that has become resistant to the existing antibiotic portfolio.

“Our approach is to use vaccines instead, and that is what we are working on,” he adds.

Boehringer Ingelheim is currently in a consolidation phase of its product portfolio.

“We have launched so many new products recently that what we will be doing now is maximising their growth, especially in the diabetes and oncology respiratory areas,” says Pöhl. “This will be it for the next two to three years; then we will start with the next wave of products.” 

“Our job is to come up with new innovative products”

“Either we have new products that really bring value … or we go out of business”