Corporate Magazine 2012 - Boehringer Ingelheim

Value through InnovationCorporate Magazine 2012

'PRL 95, 205503 (2005)PHYSICAL REVIEW LETTERS week ending11 NOVEMBER 2005capacitor was placed inside a 37 mm internal diameterTeflon container, which itself closely fitted inside thehigh-pressure cylinder of internal diameter 45 mm of ahigh-pressure assembly [16], and then connected to aSolartron 1260 impedance analyzer. The Teflon cell wasfilled with ca. 25 ml of pure water (tissue-culture gradewater supplied by Sigma or water purified by using Milli-Q® Ultrapure WaterSystems) or water doped with a minuteamount of KOH (1:7 10 4 mole fraction). (The KOHdoping decreases the dielectric relaxation time in ice Ih due‘‘to the release of water molecules from the ice rule’’ [17]so that the relaxation can be studied during the pathtowards amorphization, but those results will be publishedelsewhere. In the course of the experiments with the KOHdopant, the unexpected relaxation behavior of HDA wasestablished. As described below, the failure rate in theseexperiments is very high, and the demonstrated insignificanteffect of doping on the relaxation behavior of HDAjustifies the use of the data also for the doped water toobtain a more complete picture. The reason for the lack ofdoping effect might be due to the amorphous structure ofHDA, which makes the ice rules irrelevant, and/or segregationof the dopant during pressurization.) The cell wassealed with a tightly fitting, 5 mm thick Teflon cover andthe piston inserted. The whole assembly was placed in avacuum chamber and load was applied [16]. The pressurein the cell was determined from the ratio of load to area towhich a correction for friction was applied. This correctionhad been previously established in a separate, in situ,experiment by using the pressure dependence of the resistanceof a manganin wire. Temperature was varied by usinga built-in helium cryostat equipped with a heater, andpressure on the sample was computer-monitored continuously.Their accuracy was 0:3 Kand 0:05 GPa.The high-pressure vessel, containing water at0:04 GPa, was cooled from 298 K to about 100 K.Thereafter, its temperature was raised and stabilized at125–130 K, which took a total of 10 h. The pressure wasthen raised at the average rate of 0:1 GPa=h. The heatingrate was typically 15 K=h and cooling rate 10 K=h, near150 K. Thus, one set of experiments took a continuousperiod of several days. The temperature difference betweenthe sample and the Teflon cell wall [differential thermalanalysis (DTA)] was measured continuously to determinewater’s transformation. Because of frequent rapid crystallizationduring pressurizing from 0.8 to 1.1 GPa, the iceamorphizationrange, the success rate in these experimentswas only 20%. In total, five experiments were successfulin obtaining HDA ice: three with pure water, which wereused for measurements at pressures below 0.1 GPa and at1 GPa, and two with KOH-doped water, which were usedfor measurements at 0.4 and 1 GPa.Figure 1 shows that the capacitance C 0 measured for1 MHz frequency increases at 0.75 GPa in a stretchedsigmoid shape manner as hexagonal ice at 130 Kamorphizes to a high-density amorphous ice, in agreementC' (nF)0.90.80.70.60.50.4CapacitanceThermal conductivityHexagonal iceAmorphization range0.0 0.2 0.4 0.6 0.8 1.0 1.2p (GPa)High-densityamorphous iceFIG. 1 (color online). The dielectric capacitance at 1 MHzfrequency of KOH-doped hexagonal ice (see experimental details)and thermal conductivity at 130 K [18] is plotted againstthe pressure.with previous results [18]. Pressure was then decreased to1 GPa, and the sample at this pressure was heated whilerecording the dielectric spectra (Fig. 2). The spectra at130 K show only the high frequency part of a relaxationpeak. As temperature is increased, the peak shifts to ahigher frequency and finally appears in the spectra above140 K. The decrease in the height of the dielectric loss " 00peak (or C 00 peak) at higher temperature shows that boththe pure and doped samples (see experimental details)begin to crystallize on heating above 150 K. Simultaneouslyrecorded DTA data (not provided here) showed asmall, slowly growing exothermic effect which reached alocal maximum at 150 K, thus verifying nucleation oronset of a slow crystallization, which accelerated above150 K. It has been shown previously that VHDA crystallizesto ices VI and XII on slow heating near 1 GPa [19].C ' (nF )C '' (nF )(a)20151050(b)6420132.1 K137.1 K142.9 K146.0 K148.7 K150.7 K152.7 K154.7 K158.8 K0 1 2 3 4log (f,Hz)ε'40ε '80400(d)20(c)543210κ (W m -1 K -1 )130.7 K135.7 K140.8 K145.8 K150.9 K155.9 K00 1 2 3 4 5log (f,Hz)FIG. 2 (color online). The dielectric loss spectra for:(a),(b) KOH-doped HDA and (c),(d) pure HDA at 1 GPa atdifferent T.205503-2

our businesses66 [ prescription medicines ]67 CARDIOVASCULAR DISEASES70 REDUCING STROKE RISK IN ATRIAL FIBRILLATION73 CONTROLLING HYPERTENSION ANDCARDIOVASCULAR PROTECTION76 LIVING BETTER WITH DIABETES79 THE TRUE FACE OF COPD82 PERSPECTIVES ON INNOVATIVE BUSINESSMODELS84 MARKET ACCESS FOR NEW MEDICINES86 PASSIONATELY ENABLING GROWTH88 [ consumer health care ]89 STAY HEALTHY TO ENJOY YOUR FREEDOM90 FROM PRESCRIPTION TO SELF-MEDICATION92 [ biopharmaceuticals & biosimilars ]93 BIOPHARMACEUTICALS –MEDICINES FOR THE FUTURE94 INNOVATION DRIVERS IN BIOPHARMACEUTICALS97 BIOSIMILARS – PERSPECTIVES FOR PATIENTS98 [ animal health ]99 COMPREHENSIVE ANIMAL HEALTH MANAGEMENT101 FRONT LINE RESEARCH104 GLOBAL PERSPECTIVES IN ANIMAL HEALTH106 A FUTURE FOR VULTURES IN INDIAproduction network112 MANAGING QUALITY114 SECURE SUPPLY CHAINS GUARANTEEDour markets120 EUROPE - MARKETS IN TRANSITION124 USA - FUNDAMENTAL REFORMS126 JAPAN - HEALTHCARE FINANCING UNCLEARCONTENT

VALUE THROUGHINNOVATIONWe perceive ourselves as the patient ̒s partner,providing innovative medicines for better health.We thereby create Value through Innovation.

value through innovationperspectives for lasting successPerspectives for lasting success7

perspectives for boehringer ingelheimemployees’ photo contestglencoe, scotland[ p.10 ]sant cugat, spain[ p.98 ]kleinich, germany[ p.66 ]biberach, germany[ p.92 ]sicily, italy[ p.116 ]swakopmund, namibia[ p.38 ]Employees’ photos for the annual report9

56° 40' 59" N, 5° 6' 14" Wglencoe, scotland

corporate responsibilityperspectives for societynadezhda chetvertnykhmedical representativest. petersburg, russiaread more about read the more perspective aboutthe photographers’ of scientist mustermannperspective

56° 40' 59" N, 5° 6' 14" Wglencoe, scotland

perspectives for societynadezhda chetvertnykhmedical representativest. petersburg, russiaread more about the perspectiveof scientist mustermann

PERSPECTIVES FORSOCIETYIn all our activities we safeguard our employees, facilities and the environmentfrom harmful influences, conserve natural resources and promote environmentalawareness. In this way we seek to foster economic and social well-being in thecountries and communities where we do business.OUR CORPORATE RESPONSIBILITY INCLUDES THE TOPICS:BUSINESSETHICSEMPLOYEES / HUMANRESOURCESENVIRONMENT, HEALTHAND SAFETYCORPORATECITIZENSHIPWe are guided by theOur employees are theOur environmentalWe regard our involvementcompany’s stated coreguarantors of our innovativeprotection, energy efficiencyin public-private partner-principles (Leitbild) andcapability. They form theand carbon footprintships and foundations asthe vision Value throughcore of our unique corporatecontinue to be importantactive citizenship, as serviceInnovation.culture as family-ownedissues to work on.to society.company that lives out itsresponsibility and buildson mutual respect andfairness.OUR EMPLOYEES[ worldwide ]ENVIRONMENT, HEALTH AND SAFETY[ co2 reductions ]46,228 100,000 tMore than 46,000 employees workat Boehringer Ingelheim.During the last ten years we could savemore than 100,000 tons of CO2 emissionsat our sites.12 Boehringer Ingelheim annual report 2012

corporate responsibilityperspectives for societycontents14 COMPANY WITH A HUMAN FACE18 NEW WAYS OF IMPROVING HEALTH24 PERSPECTIVES FOR ENVIRONMENT,HEALTH AND SAFETY28 OUTSTANDING BASIC RESEARCH30 PERSPECTIVES FOR THE SOCIETY OF TOMORROW32 NEW STIMULI IN RESEARCH34 SHAPING THE FUTURE OF RESEARCH36 KNOWLEDGE TRANSFER BETWEEN ACADEMIAAND INDUSTRY“MAKING MORE HEALTH” INITIATIVE[ youth projects ]“MAKING MORE HEALTH” INITIATIVE[ social entrepreneurs ]>10050More than 100 youth teams aresupported in the “Making MoreHealth” initiative.50 social entrepreneurs willbe identified in the initiative.Perspectives for society13

50 NATIONSPeople from around 50 nations work at Boehringer Ingelheimworldwide. Different cultures and nationalities make itpossible to provide customer-specific offerings globally.Differing markets can also be evaluated much better.COMPANY WITH A HUMAN FACEBoehringer Ingelheim has a distinctive company culture thatfosters innovation, drives high performance and encouragesdiversity, collaboration and mutual respect. The four values(respect, trust, empathy and passion) characterise the verynature of Boehringer Ingelheim.The essence of a company is expressedin its culture, which is created and sustainedby its employees. As a more than127 year-old, privately-held company,Boehringer Ingelheim has a deep-rooteddistinctive company culture.In 2012, Boehringer Ingelheim highlightedfour values of this culture:respect, trust, empathy and passion,which characterise the very natureof Boehringer Ingelheim’s human face.Together, all employees will further developBoehringer Ingelheim’s culture,its most distinctive character, at thesame time its most important competitiveadvantage, enabling the companyto realise its vision: Value through Innovation.International mobilityTalent management has proven to beinstrumental in enabling BoehringerIngelheim’s business strategy and willremain a key driver in creating a competitiveworkforce. Through talent management,the company strives to ensuresustained employability for all employees,ensure performance managementand development of the employees aswell as secure robust succession planningglobally with a clear focus on strategicpositions.The globalisation of BoehringerIngelheim’s businesses requires consistentalignment of employee developmentwith business needs. It is crucialto truly foster the development of em-14 Boehringer Ingelheim annual report 2012

corporate responsibilityperspectives for society“I advanced my leadership andenlarged my network by participatingin the Regional Leadership DevelopmentProgramme (RLDP). The immersion experiencein Moscow was eye-openingand changed my view on emergingmarkets.”andreas henrichinformation systemsgermany“When my supervisor in China talked tome about a two-year assignment working forCorporate Communications at the headquartersin Ingelheim, I felt amazed as in many companiesonly senior management has the opportunity todo this. Every day in Germany, I learn some thingnew, no matter if it’s about work or aboutanother culture.”linda ling,corporate communications,formerly china, now germanyployees, first within their organisation,and then to prepare employees forleading teams in a globalised environment.Boehringer Ingelheim thereforedevelops through experiential learningin a new environment over a mediumor longer period of time. To acceleratethe development of talents, the companyinvests in various kinds of shorterandlonger-term international assignments.Boehringer Ingelheim uses short-timeassignments outside the employee’shome country to support a project or totemporarily fill a position. In additionto addressing business needs, shorttimeassignments are increasingly leveragedto further develop talents withinBoehringer Ingelheim’s global talentmanagement approach. A short-timeassignment offers participants uniqueopportunities to adapt to and deliverresults in new and challenging environments,as well as broaden their internationalnetwork.Diversity and inclusionDiversity and inclusion have been partof our commitment, as visibly demonstratedby the company Leitbild (guidingprinciples). The company is convincedBOEHRINGER INGELHEIM’S VALUESRESPECT TRUST EMPATHY PASSIONRespect means that allemployees treat peopleand everything in theirenvironment with respect.Trust is the mindsetwith which everyoneapproaches each other.Empathy means theemployees care – abouttheir colleagues, aboutthe customers, aboutsociety, about healthcareworkers, about patientsand their families.Passion is our desire toimprove and succeed.We believe that we canonly be successful if wepursue our objectiveswith passion.Company with a human face15

“RLDP journey: a great learning opportunity,that was enhanced by the sharingof different experiences on how leaderscan change teams by translating thecompany vision into their own work unitand inspiring employees to strive for thatvision.”For the success of our business, it is crucial to trulyfoster the development of employees, first within theirorganisation, and then to prepare employees forleading teams in a globalised environment.mohammed al-tawilbusiness headmiddle east & near east regiondubaiRLDPThe Regional LeadershipDevelopment Programme (RLDP)is a major step in the processof building leadership capabilitythat is grounded in the valuesand focused on enabling thecompany to deliver Value throughInnovation.that the effective integration of diverseviews, different experience and theknowledge of all employees make a significantdifference when it comes to understandingglobal and complex marketsand customer needs.In order to be successful, it is essentialto have the right people at the rightplace with the appropriate skills andexperience, with diverse personal andprofessional backgrounds enablingthem to contribute in their entirety.Boehringer Ingelheim wants to encourageeverybody to develop their talents,knowing that their individual characteristicsand distinctive backgroundsare an asset to the company.The company has strengthened an understandingof the value of diversityand inclusion. For diversity and inclusionto become a genuine part of howBoehringer Ingelheim conducts business,we will integrate diversity and inclusionwithin all processes in our businessesand functions to leverage itsvalue and benefit.Leadership developmentLeadership development enables thesuccessful execution of the BoehringerIngelheim strategy and ensures a successionof well-prepared leaders to supportthe sustained growth and independenceof the company.Overall, the leadership developmentframework will support leaders by providingappropriate development basedon their individual needs and the differentstages in their leadership career,with tailored programmes for the needsof senior executives, middle managersand team managers.Boehringer Ingelheim’s operatingenvironment is undergoing extensiveand rapid change. Power is shifting topayers, regulation is intensifying andnew competitors are appearing inunexpected places, while new marketsare opening across the globe. In thiscompetitive situation, BoehringerIngelheim has made significantchanges to its global strategy andits operating model.16 Boehringer Ingelheim annual report 2012

corporate responsibilityperspectives for society“I have experienced thatpeople matter and have seenmany examples whereby ourcompany has reached out to helpemployees. For me, this makesBoehringer Ingelheim a verypersonal place to work.”anne-marie jenningsanimal healthformerly usa, now germanySPECIAL PRIZE FOR INCLUSIONIn Germany, Boehringer Ingelheim has been awarded a special prize for theexemplary employment of severely disabled people by the Rhineland-PalatinateState Office for Social Affairs, Youth and Care. Boehringer Ingelheim was thefirst company in Germany to draw up its own action plan for implementing theUnited Nations Convention on the Rights of Persons with Disabilities in 2012.Concrete targets and activities will translate the provisions of the conventioninto binding actionThe company recognises that welltrainedleaders at all levels are criticalto meeting the challenges of this competitiveenvironment and to fulfillingthe company’s vision. The RegionalLeadership Development Programme(RLDP) is a major step in the process ofbuilding leadership capability that isgrounded in the values and focused onenabling the company to deliver Valuethrough Innovation.management participate in the twomoduletraining held in cities, such asNew York, Moscow, Singapore, Shanghaiand Istanbul. The modules covertopics such as self-awareness, coachingand feedback, strategy implementation,leading change, leading globalteams and innovation.A programme has been designed totrain and support more than 1,000senior leaders across three geographicalregions. Boehringer Ingelheim haspartnered with Duke Corporate Education(Duke CE) of Duke University.Duke CE has been ranked Number 1 inthe world for ten consecutive years bythe Financial Times and BusinessWeek. Together, Boehringer Ingelheimand Duke have designed a uniquelearning experience tailored to thecompany’s competitive challenges.All leaders who are responsible for abusiness and/or function in middleWORKING MOTHER BESTCOMPANY AWARDIn 2012, Boehringer Ingelheimwas granted an award for the top100 best companies for workingmothers in the USA.This time, particular weight wasgiven to child care, flexible schedulingoptions and advancementprogrammes.Company with a human face17

SHONA MCDONALD, SHONAQUIP[ south africa ]her idea: designing wheelchairs for childrenwho cannot afford any or cannot use thestandard models.her approach: building strong wheelchairs andproviding appropriate assistive devices thateffectively reduce the development of secondaryhealth complications in disabled children.The vision of the “Making More Health”initiative is to identify new and better waysof improving health globally.NEW WAYS OF IMPROVINGHEALTHSince 2010, Boehringer Ingelheim and the non-governmentalorganisation Ashoka have been working together in a globalpartnership, “Making More Health”. Its vision is to identify newand better ways of improving health globally. The objectivesare to source social innovation around the world, to exploreunconventional partnerships and business models, and toinclude and develop Boehringer Ingelheim employees.By supporting social entrepreneurs (seeright) in the field of health, BoehringerIngelheim aims to provide better healthbeyond its core business.With Ashoka, the company wants toprepare for 21st century challenges ofhealth access by understanding trendsin key areas, including healthcare delivery,the globalisation of health issues,the changing face of healthcare providersand the patient’s role, especially inlow-income populations.20 new social entrepreneurs were elected“Making More Health” fellows byBoehringer Ingelheim and Ashoka in2012 (see examples in grey boxes above.More online).“Youth Venture”By the end of 2013, “Making MoreHealth” will be supporting 50 socialentrepreneurs and numerous youthprojects. The “Youth Venture” programme,designed to grant every youngperson the opportunity to be a changemaker,supports 12 – 24 year olds inlaunching their own changemakingprojects. These ventures address andimprove local problems in the field ofhealth in the areas of nutrition, sports,environment, social cooperation ortotally different areas associated withhealth in the broadest sense.Through the “Youth Venture” initiative,young people shall develop an earlyunderstanding of empathy, teamwork,problem solving and leadership behaviourand take responsibility for theirown actions. The overall objective is to18 Boehringer Ingelheim annual report 2012

corporate responsibilityperspectives for society1 In Shona McDonald’s project, appropriate wheelchairs forchildren are designed.2 Participants of the Indonesian “Youth Venture” project.SAM AGUTU, CHANGAMKA[ east africa ]his idea: making health insurance accessible forpeople working outside of formal employment.his approach: using a technology-basedapproach pairing mobile phones with healthinsurance smart cards to be available forpurchase in any grocery store throughoutthe country.1 2create a strong network of changemakers– people who drive change, oneof the basic ideas of “Making MoreHealth”. Boehringer Ingelheim employeesactively support the youth in theprogramme by serving as mentors orcoaches. These employees pass on theirknowledge, network and experience.Seven countries are engaged in the“Youth Venture” initiative – Indonesia,Argentina, Germany, the USA, Mexico,Brazil and Spain – and have supportedmore than 100 youth teams. Examplesinclude a “Changemaker Weekend”,which took place in Germany in November2012. Two projects will be implementedduring the coming months.One project, “BE Integrated – Azubishelfen Azubis” (BE integrated – apprenticeshelp apprentices) aims to fosternetworking between apprentices at theIngelheim site in Germany, primarily inorder to make it possible for them to geta better start in their professional lives.In the longer term, Ante Jonjic andNathalie Kastello, themselves apprenticesand leaders of the project, want tocooperate with other sites also offeringapprenticeships. The positive power ofnetworks and partnerships is a key partof what “Making More Health” is allabout. With the project “Gesundheitsbewusstsein– make it real” (Healthawareness – make it real), BenjaminGmeiner and Susanne Kulzer, apprenticesfrom Biberach, Germany, will provideinformation to children and youngpeople between eight and 15 years ofage with the goal of generating greaterawareness for healthy, sound living.SOCIAL ENTREPRENEURSThe term social entrepreneuris much more than a professionaldescription. Being asocial entrepreneur is rather astate of mind committed tothe goal of making positivesocial change for the future.Like the classical commercialentrepreneur, the social entrepreneur’squalities includethe will to succeed, creativity,pragmatism, entrepreneurialspirit and vision. Social entrepreneursadd to these qualitiesthe drive to make a positivechange in society for thelong term.The social entrepreneursolves pressing social problemssustainably for example,in fields like combating poverty,education, family, integration,human rights andenvironmental protection.They are innovative, thinksystematically and developconcepts with measurableoutcomes. The goal is not implementationat a specificlocation, but to implementthe concept wherever it isneeded. Social entrepreneursdo not provide their servicesfree of charge, but try asmuch as possible to achieveincome. If they earn moneyand become profitable, theyreinvest their profits in developingtheir social businessmodel further.New ways of improving health19

SEHNAZ LAYIKEL, RUSIHAK[ turkey ]her idea: improving access to mentalhealthcare in Turkey.her approach: deconstructing the top-downmedical approach that continues todehumanise individuals with mentaldisabilities in Turkey. Improvedliving conditions for mental healthpatients, including better mealsand more recess time.Boehringer Ingelheim employee Dr ThomasFranke supports the institution FundaciónEducational, which focuses on nutritioneducation in Latin America.The Argentinian “Youth Venture”project, “Distensionáte”, provides trainingin domestic electrical installation tosocially vulnerable youth, who findthemselves at high risk of accidents dueto insecure electrical conditions. Thisvital training programme aims to combatthe problem of dangerous and nontrainedelectrical installation as well asincrease legitimate, worthwhile job opportunitiesfor participants.At the heart of the Indonesia-based“Youth Venture” project, “Maestro GreenRadio”, is a radio show promoting environmentalawareness. The programme ison air twice a day and delivers a varietyof messages about environmental preservation.“Boehringer Ingelheim Executivein Residence”Boehringer Ingelheim employees supportyoung changemakers and also establishedsocial entrepreneurs andtheir businesses in various ways. Employeeengagement with social entrepreneursdirectly calls on the employees’talent to bring about lastingchange in the field of health. This aspectof “Making More Health” forms abridge between Boehringer Ingelheim’sexpertise and competence and the innovativecapabilities of the social entrepreneurs.An element of the “Making More Health”commitment to bring employees andsocial entrepreneurs together is the“Boehringer Ingelheim Executive inResidence” programme (see right). Thisplaces employees in the field with thesocial entrepreneurs so they may directlysupport the social entrepreneurs’business for a certain period.While the employees are providing specificbusiness skills, they are also learningand developing valuable leadershipcompetencies during the experiencewith the social entrepreneur. The socialprojects Boehringer Ingelheim employeessupport are critical to the businessof the social entrepreneur and expandthe businesses impact to individualsand communities where it is most criti-20 Boehringer Ingelheim annual report 2012

corporate responsibilityperspectives for societyHEIDI WANG, NOEN[ norway ]her idea: supporting dementia sufferers and theirfamilies to improve long-term care.her approach: helping families map the collectivestory of a dementia sufferer’s life through a twiceweeklyat-home activity programme. Families alsoreceive legal advice and guidance on dementiacare. An app allows users to input data on personalitychanges, physical markers and other personalinformation.1 21 At the first “Making More Health” conventionat corporate headquarters in Ingelheim, Germany,Rajeev Sukumaran and Mukteshwari Bosco presentedthe first results of their work for Healing FieldsFoundation.2 During his time in India, Rajeev Sukumaran helpedto scale up a project that created a mini-insurancesystem in several Indian villages.cally needed. This programme is availableto Boehringer Ingelheim’s GlobalManagement Development Programme(GMDP) participants.Rajeev Sukumaran is Boehringer Ingelheim’sfirst employee to have taken partin “Boehringer Ingelheim Executive inResidence”. He was granted professionaldevelopment time away from hisfull-time job in Information Systemsin Ridgefield (USA) for three months inwhich he actively worked alongside thefemale social entrepreneur MukteshwariBosco, who founded Healing FieldsFoundation in India.“My overall goal was to gain moreexposure in the area of health,” hesays in an interview. “Moreover, Iwanted to be involved in doing socialgood. This project gave me the opportunityto do both. The goal of HealingFields is to make quality healthcareavailable to people who cannot affordit – especially in regions with extremelylimited or no facilities, like doctors orhospitals.”Healing Fields Foundation created abusiness model, which ultimately led toa mini-insurance system inside the village,linked with the next hospital. Sukumaranhelped to scale up the projectand also gained valuable people skillsin the process. With thanks to Sukumaranand his contributions, the HealingFields model has now been rolled out to5,000 other villages in India.Educational campaignAdditional Executives in Residence startedin October 2012. Dr Thomas Franke,who works in the Information SystemsDepartment at Boehringer Ingelheim inIngelheim, Germany, joined Maria AnaAngeleri de Schwartz, elected “Making“BOEHRINGER INGELHEIM EXECUTIVE IN RESIDENCE”The “Executive in Residence”programme by Ashoka is aleadership development opportunityavailable to BoehringerIngelheim’s GlobalManagement DevelopmentProgramme (GMDP) participants– therefore often alsocalled “Boehringer IngelheimExecutive in Residence”. Itallows Boehringer Ingelheimemployees to work with anAshoka fellow for severalmonths on a project. Themain focus of GMDP is leadingoneself and others. It hasbeen designed as an experientialdevelopment opportunitybuilt on project work and integratedwith leadership skillstraining. Through this experience,participants will buildkey leadership competenciesthat will enable them to leadthemselves and their teams tosuccess.New ways of improving health21

Thalita Guimaraes joins the “BoehringerIngelheim Executive in Residence” programmeand works together with “MakingMore Health” fellow Krystian Fikert.ELISABETH RAITH-PAULA,MFM-PROJECT[ germany ]her idea: improving body confidence andself-awareness in children.her approach: teaching body competence,self-awareness, cross-gender understandingand informed decision-making for youngpeople in workshops. Parents andteachers receive training to be ableto answer questions and improvechildren’s knowledge about sexuality.CHANGEMAKER COMPETITIONS... are an aspect of the “MakingMore Health” initiative thatinvites innovative, sustainableideas from the public with thepotential to transform healthand increase well-being.The second Changemaker Competitionentitled “TransformingHealth Systems: GamechangingBusiness Models” was launchedin January 2013. It is intended togenerate new ideas and businessmodels with the potential, forexample, to improve access tohealthcare services or to supportpatients. Those submitting thebest ideas will, in addition toprize money, also receive supportfrom Boehringer Ingelheim andthereby be able to realise theirbusiness models.www.changemakers.com/healthbizMore Health” fellow in 2011, in her institutionFundación Educacional, whichfocuses on nutrition education in LatinAmerica. So far, Franke’s work with theteam on location in Buenos Aires, Argentina,has been to analyse the organisation’ssituation, determine its goals andwork out strategies for implementation.The main focus of Franke’s work is directedtoward broadening the workingmodel of Fundación Educacional. Besidesthe manpower and cost-intensivemeasures by which the organisation’semployees currently educate school children,Fundación Educational is workingwith Franke to make supplementary useof digital technologies that make it possibleto reach children in remote schools.In concrete terms, implementation willconsist of the development of futureworking models, the actual implementationof e-trainings and remote cooperationtools. To turn this into reality, theteam from Fundación Educacional seeksto enlist the support of potential cooperationpartners from industry.“With all of these ideas, one should,however, never lose sight of the actualcircumstances at the location, such asprovision of the school with computers,DVD drives or the internet. Long-termfeasibility calls for no deployment ofcomplicated technology, for keepingcosts low and for ensuring that equipmentcan be looked after and maintained,”commented Franke on thechallenges of the project.Setting up the businessFor half a year, Michael Döll fromBoeh ringer Ingelheim’s PurchasingDepartment, is supporting the scale upof the organisation “Discovering Hands”.Its founder, Dr Frank Hoffmann, wasselected as a “Making More Health”fellow in 2011. Among other things,Döll is helping to further develop thestrategy to globally expand the innovativesystem behind “DiscoveringHands” – using blind and visually impairedwomen in breast cancer diagnosisand prevention.22 Boehringer Ingelheim annual report 2012

corporate responsibilityperspectives for societyGISELA SOLYMOS, CREN[ brazil ]her idea: addressing the psychological effects ofpoverty to alleviate malnutrition.her approach: different types of service,including individual clinic consultations,group activities with physicaleducation teachers and nutritionworkshops.Michael Döll is working with “Making More Health” fellow Dr FrankHoffmann. Among other things, Döll is helping to further develop thestrategy to globally expand the innovative system behind “DiscoveringHands” – using blind and visually impaired women in breast cancerdiagnosis and prevention.Additional responsibilities Döll has inhis assignment are setting up the businessof the orientation stripes used bythe blind medical tactile examiners(MTEs) to localise tissue alterations,identifying medical partners, seekinginvestors and recruiting new MTE candidates.“This initiative is a perfectcombination of an innovative methodof early breast cancer detection and theinclusion of visually impaired women,”enthuses Döll about the project.Structuring the businessThalita Guimaraes is working as aproduct manager for Respiratory BrandsManagement at Boehringer Ingelheimin São Paulo, Brazil. She joined the“Boehringer Ingelheim Executive inResidence” programme and is workingtogether with “Making More Health” fellowKrystian Fikert. His organisation,MyMind, in Ireland, is a social enterprisewhich provides affordable andeasily accessible psychological counsellingservices to those suffering from depression,anxiety or other mental healthproblems.“My challenge in the MyMind project isto support them in structuring theirbusiness and to develop their onlineservices (free support online and Skypesessions),” Guimaraes describes hertask. “At MyMind, every day is time todo something for people in need ofhelp,” she says.Several improvements could be observedsuch as the launch of a newwebsite, connected with social mediaor mobile phones. A new business planwas developed, and a Facebook andradio campaign was created to increasepopular awareness about MyMind, toname only a few things.FOR MORE INFORMATION SEEwww.makingmorehealth.orgcorporateresponsibility.boehringer-ingelheim.comwww.youthventure.orgwww.ashoka.orgNew ways of improving health23

When handling chemicals, employees must protectthemselves in special ways. Employee protection is acrucial part of the BE SAFE initiative at BoehringerIngelheim.PERSPECTIVES FOR ENVIRONMENT,HEALTH AND SAFETYProtecting the environment, conserving natural resources andpromoting environmental awareness are valued principles atBoehringer Ingelheim, which are anchored in our Leitbild(guiding principles) and in the Boehringer IngelheimEnvironment, Health and Safety (EHS) policy.country to country and even over acertain time period.• Emissions of CO 2 have to be reducedwherever technically feasible andmeaningful.• Water usage has to be reduced withoutnegative environmental impactfrom other substances, e. g. usage oforganic solvents.In order to make products out of startingmaterials, the usage of energy resources,air and water is a precondition.To protect resources and to fulfil thetargets from Boehringer Ingelheim’sLeitbild, there are several aspects toconsider. For example:• Sourcing and use of energy have tobe optimised. Energy losses have tobe avoided as far as possible. The usageof renewable energy has to beconsidered. Boehringer Ingelheimhas to find the optimal energy mix,which may vary from site to site,• Wastewater has to be treated accordingto regulatory requirements andindustry standards. The impact ofpharmaceuticals in the environmenthas to be analysed and, where scientificallyreasonable, remediated.• Waste to landfill has to be reducedand balanced in relation to wasteburning, according to the nationallegal and regulatory requirements.In many cases, reduction strategieshave to be tailor-made for individualproblems. The right environmentalmindset is key to solving problems. No24 Boehringer Ingelheim annual report 2012

corporate responsibilityperspectives for societyENVIRONMENTAL IMPACT ALONG THE PHARMACEUTICAL VALUE CHAIN[ supply chain ]energyefficiency[ production ][ product ]airenergylossesgasair/climatewaterenergyresourcesstartingmaterialsmanufacturingprocess &infrastructureemissions/co2wastewateruse &disposalpie*wastesurface watergroundwatersoilproduct &process designwaste/landfillhistorical old processesbrownfields* Pharmaceuticals in the environment.energy-saving measure is so unimportantthat it can be neglected in the scientific-technicalevaluation.BE GREEN – new environmentalactivitiesVarious projects for improving our environmentalefficiencies, such as reducingenergy consumption and greenhousegases, have been locally implemented atseveral sites, which has led to savingsduring the last ten years of more than100,000 tons of CO 2 emissions.The BE GREEN initiative will furthercontribute to Boehringer Ingelheimbeing an organisation, in which sustainabilityin EHS is truly a value, inline with the company’s Value throughInnovation principles. In order to achievesustainability, all our employees areasked to take a more proactive role inprotecting natural resources and in implementingenvironmentally-consciousprocesses. This means making decisionsthat support the implementation of strategicgoals and proj ects to continuouslyreduce environmental impact.Energy efficiency and CO 2emission reductionBoehringer Ingelheim has activelysaved energy for years. This topic willbe significantly reinforced further bynew, company-wide projects within theBE GREEN initiative. Further reductionof CO 2 emissions will be achieved in future,for instance due to increased inclusionof new savings potentials, suchas logistics, travel and car fleet.CO 2 cut for company cars in GermanyAt the German sites, the upper limit forCO 2 emissions from company cars waslowered by 6.2% from 177 g in 2011 to166 g/kilometre. This corresponds to areduction of about 11 tons of CO 2 permillion kilometres driven.Infrastructure innovation in ItalyAt our Italian site in Milan, various innovationswere introduced to site infrastructurein order to significantly reduceenergy consumption. For example,the air compressors for the site were exchanged,resulting in energy saving of15%. Furthermore, all sanitary facilities“20 BY 20” –THE BE GREEN KEY GOALTo achieve a 20% reduction incompany carbon dioxide emissionsglobally by 2020 – using2010 emissions as a baseline – isa key goal of BE GREEN. To meetthis ambitious target, we will addressour culture, behaviour andprocesses in a sustainable way.Perspectives for environment, health and safety25

11 With its own wastewater treatment plants here in Ingelheim,Germany, Boehringer Ingelheim is able to clean wastewaterarising from production.2 The whole treatment plant process is tested continuously(picture: online measurement devices for testing water quality).This way, the company ensures that only cleaned water isreturned to the environment – an active contribution to environmentalprotection.NEW REPORTING SYSTEMOPERATIONALTo support the management ofEHS performance within BoehringerIngelheim, SustainabilityPerformance Management (SuPM)reporting has been established. Itwas enhanced in 2012 by the introductionof new reporting softwarein order to increase the qualityand integrity of reported data.Furthermore, the new system providesa company-wide database,is easy to use, means less work forall stakeholders and is preparedfor future reporting requirements.at the site were equipped with motiondetectors to automatically turn lights onand off. Additionally, a facility automationsystem was also implemented tooptimise infrastructure maintenance,leading to further optimisation of energyconsumption.New lighting systems in SpainOur San Cugat site in Spain undertooka comprehensive renewal of itslighting systems. The switch fromconventional lighting to modern systemsleads to an annual energy savingof some 194,000 kWh. This roughlycorresponds to the annual consumptionof 473 housing units. The energysaving is associated with an annualreduction of around 106 tons of CO 2emissions.Improved operation of buildings inGermanyVarious optimisation measures in theoperational technology of the PharmaceuticalResearch and Developmentbuildings at the site in Biberach, Germany,achieved an annual reduction inCO 2 emissions of around 400 tons. Thiscorresponds to an energy saving ofsome 20%. This only involved changesto operational procedures in the buildingsand no additional investment wasmade.Soil clean-up at our Ingelheim siteFor over 25 years, environmental protectionhas been an integral part ofBoehringer Ingelheim’s corporate culture.This includes not only projects onwastewater treatment, air pollution preventionand resource protection butalso evaluation and clean-up of contaminateddeposits.In past years, we started an extensiveproject under our own initiative for theinspection and clean-up of contaminateddeposits in the soil at our corporateheadquarters site at Ingel heim, Germany,where active ingredients and medicineshave been produced for morethan 127 years. We have set ourselvesthe target of identifying and cleaningup contamination of the soil at and inthe vicinity of our production sites.26 Boehringer Ingelheim annual report 2012

corporate responsibilityperspectives for societyNEW LIGHTING SYSTEMSA switch from conventional lighting to modern systemsleads to a significant energy saving. With the renewalof the lighting systems (left: new lights, right: old lights)at the site in San Cugat, Spain, some 194,000 kWh canbe saved annually.[ new ] [ old ]2Back in the 1980s, protective boreholeswere installed in agreement with theauthorities in order to extract groundwaterthat is treated in the site wastewatertreatment plant and then returnedin clean condition.In past years, Boehringer Ingelheim hasintensified measures worldwide to identifyand clean up contaminated deposits.Clean-up measures at the Ingelheimsite, our largest production site worldwide,are part of this overall process.Due to technical progress and increasedknowledge, new and deeper insightsinto the problems are possible more sotoday than before. For example, groundwaterflows over a prolonged period canbe depicted and projected with computersupport. In addition, external expertsin geochemistry, environmentaltoxicology and engineering sciences arecontinuously involved as consultants inorder to implement measures for individualclean-up projects.BE SAFE – NEW DEVELOPMENTS IN 2012The aim of our worldwideinitiative for improving safetyculture, BE SAFE – Zero byChoice, is to encourage allemployees to proactively takeon the responsibility of theirown well-being and to alsolook out for others workingaround them.The roll-out ensures that allfunctions go through a workflowcomprising various steps,such as setting up specificimprovement plans. By theend of 2012, the roll-out ofBE SAFE – Zero by Choicehad been started in Germany,the USA, China, Austria, Spain,France, Italy, Mexico, the countriesof Central and EasternEurope, Russia and Brazil.In 2013, the roll-out is plannedto continue in several morecountries. The BE SAFE initiative,which has been rewardedby the German ChemicalAssociation with the localResponsible Care Award, will –in parallel – be extended tosmaller Marketing & Salessites in order to involve thelocal field force in the newsafety approach.Perspectives for environment, health and safety27

21 Dr Carolyn R. Bertozzi received the Heinrich WielandPrize 2012 for her research on the biological functionsof cellular sugars.2 The Heinrich Wieland Prize honours outstanding researchon biologically active molecules and systems and theirclinical impact in chemistry, biochemistry and physiology.1OUTSTANDING BASICRESEARCHPromoting basic research is essential for our research anddevelopment mission and an integral part of our socialresponsibility. Central to success in research and development(R&D) are scientists who can bridge basic research andscience in the pharmaceutical industry.The search for new therapeutic optionsis the cornerstone of Boehringer Ingelheim’sR&D. Alongside a continuingcommitment to our own R&D projects,we focus on working together withothers to contribute to therapeutic progressby developing tomorrow’s medicinesfrom today’s science.In our constant quest for pharmaceuticalinnovation, we have successful ongoingcollaborations and are activelyseeking new collaborations with externalpartners, ranging from academicinstitutions to biopharmaceutical enterprisesand start-up companies.Honouring scientific workBoehringer Ingelheim supports,awards and sponsors several scientificactivities conducted by curiosity-drivenscientists. The Boehringer IngelheimFENS Research Award recognisesyoung European scientists for outstandingresearch in the field of neuroscience.The international Heinrich WielandPrize honours outstanding research onbiologically active molecules and systemsand their clinical impact in chemistry,biochemistry and physiology. Theprize is named after the Nobel laureateHeinrich Otto Wieland (1877 – 1957),who was professor of chemistry inMunich for many years. Wielandmaintained close relations to BoehringerIngelheim and played an importantpart in setting up the company’sresearch activities.Heinrich Wieland Prize 2012Dr Carolyn R. Bertozzi, Professor ofChemistry and Professor of Cell andMolecular Biology at the University of28 Boehringer Ingelheim annual report 2012

corporate responsibilityperspectives for society3 Ilka Diester won the Boehringer Ingelheim’sFENS Award 2012 for exceptional research inNeuroscience.3California at Berkeley, received theHeinrich Wieland Prize 2012 forher research on the biological functionsof cellular sugars, especiallythe sugar modifications associatedwith cancer, inflammation and infection.She focuses on glycans, a groupof sugar chains fulfilling vital functionsin humans and other livingbeings.Her novel methodological design,bio orthogonal chemistry, helps todifferentiate healthy from diseasedcells by monitoring their sugar codes,thereby tracking tumor developmentand growth. She alters the respectivesugar codes by uniquely attachingso-called bioorthogonal reporters orlabels.These small molecules are chemicallysynthesized and then specifically insertedinto different classes of glycansby the cell itself. These bioorthogonalbiomarkers have led to a new technologyfor the development of novelprotein drugs.The chemist’s breakthrough methodcan pave the way for new therapies,e.g. against cancer.FENS Award 2012In 2012, Dr Ilka Diester of StanfordUniversity’s Department of Bioengineeringwas honoured with the FENSAward for her research into the neuralmechanisms that are used to controlmovements, particularly the differencesin neural connectivity thatexist between various species ofmammals.The work of the scientist uses optogenetics– a novel method using geneticand optical techniques – to investigatecomplex behaviours in rodentsand rhesus monkeys to dissect theneural circuits underlying movements.Diester’s work could contribute torevolutionising the understanding ofthe complexities of the mind andpropel forward medical developments.Nerve cells (neurons) are responsiblefor passing information aroundthe central nervous system (CNS)and from the CNS to the rest of thebody. This information is transmittedas electrical impulses. A nervecell comprises a central nerve cellbody surrounded by numerous extensions.Outstanding basic research 29

PERSPECTIVES FOR THE SOCIETYOF TOMORROWIn the Research Institute of Molecular Pathology (IMP) in Vienna, Austria,and the Institute of Molecular Biology (IMB) in Mainz, Germany, BoehringerIngelheim and the Boehringer Ingelheim Foundation are supporting twobasic research institutes. One of the questions which drives us is what canwe do today in order to be able to offer innovative solutions to the then mostpressing diseases in 15 to 20 years time.COOPERATION BETWEEN ACADEMICAND INDUSTRIAL RESEARCH[ in conversation with ] [ and ]Andreas Barner,Chairman of the Board ofManaging Directors,Boehringer IngelheimDr Jan-Michael Peters,Acting Director Science,Institute of Molecular Pathology,Vienna, AustriaProf. Christof Niehrs,Founding Director,Institute for Molecular Biology,Mainz, Germany30 Boehringer Ingelheim annual report 2012

corporate responsibilityperspectives for societyFor more information aboutIMB and IMP:see following pagesandreas barner: Through ourcooperation with basic research wewant to create new opportunities fordiagnoses and therapies. For this it isnecessary to have broad access to newlyemerging therapeutic concepts andnew technology platforms. These alliancesenable Boehringer Ingelheim,in cooperation with the scientific community,to integrate outside innovationsinto the company in a reliableand trusting partnership.Invention and innovation – What doesbasic research mean?jan-michael peters: Inventionand innovation and, I would add, discovery,are the core of science. Thatapplies for technological developmentthat often determines how much we investigate,and are thereby able to understand,as too for the field of biology.The freedom of basic research is requiredfor discoveries, which ultimatelydepend on the idea or intuitionof individuals. Planning and predictingcannot deliver them. New stimulifor developing medicines or othermedical progress also come from independentbasic research. That is oneof the many sound reasons to promotethem on a broad front, even when theirusability is not always immediatelyevident.And what does discovery and innovationmean for our research-driven pharmaceuticalcompany?andreas barner: Our researchersrealise innovations in human and veterinarypharmaceuticals in our ownnetwork of research and developmentsites. Here substances are developedinto medications. Examples are the medications,such as pradaxa®, spiriva®or trajenta®. We are guided by theidea of researching therapies for diseaseswith great medical need. Researchand development is an integralelement of our family-owned companyBoehringer Ingelheim.What advantages come fromcooperations between the twoworlds of research?christof niehrs: The pharmaceuticalindustry also needs welleducatedscientists and they come fromhigh-performance universities. Theseare, however, frequently underfinanced.Industry’s commitment can play animportant role in order to make a basicresearch location perform better andbe more attractive.jan-michael peters: Very muchso! Where industry and academic researchcooperate, ideas and discoveriesare tested early on for their possibleapplications, sometimes even beforeacademic researchers are aware of them.Conversely, basic research can in manydifferent ways benefit from, for example,the development of active ingredientsthat open up new experimentalopportunities.What will successful research look likein the future?christof niehrs: Research willincreasingly be conducted in largenetworks. The trend is clearly towardslarge-scale projects, as in physics. Allmanner of consortia, as in genomics,are an example of this. This trend willcontinue and grow stronger. Furthermore,methods will be increasinglyspecific and complex. In the past, alaboratory was able to cover only somefields, such a biochemistry, developmentalbiology or physiology.Today, scientific work bridges an everlargerspan from the biochemistry ofphosphorylated proteins to knock-outmice, from signal transduction analysisto their bioinformatic simulationand analysis.andreas barner: Successfulresearch takes place when we absorbnew ideas and develop therapeuticoptions beyond current scientific,metho dical and institutional boundaries.Perspectives for the society of tomorrow31

The opening ceremony of IMB:Interaction between public sector andprivate foundationNEW STIMULI IN RESEARCHThe Germany-based Institute of Molecular Biology (IMB), opened2011 in Mainz, is a research centre funded by the BoehringerIngelheim Foundation, a charity with a long tradition in promotingoutstanding research in medicine, biology, chemistry and pharmaceuticalscience. Researchers concentrate on developmental biology,epigenetics, DNA repair and related areas, and hope, thereby, todecisively advance understanding of fundamental biologicalprocesses.IMB is a non-profit company but operateslike an academic research centre.This status allows it to implement flexiblemanagement structures and to remunerateits staff with competitive salaries.Hierarchies are deliberately flatand the research groups enjoy full independence.The groups cover a broad range of expertiseand include leading biochemists,geneticists, cell and developmental biologistswho study the molecular mechanismsof the development, ageing anddisease of embryonic cells. Furthermore,bioinformaticians and systemsbiologists analyse high throughput datasets and model regulatory gene networks,alongside applied physicists who developgroundbreaking super-resolutionmicroscopes.International PhD programmeThe education of the next generation ofleading scientists is also an importantpart of IMB’s activities. In its doctoralprogramme, “Dynamics of Gene Regulation,Epigenetics and DNA DamageResponse”, PhD students from all overthe world are conducting research ininnovative projects.International Summer SchoolIn addition, an International SummerSchool (ISS) was held in 2012 for undergraduatesand PhD students at IMB.This six-week programme offered 12students the opportunity to acquirepractical skills and hands-on trainingfrom leading scientists in molecular biology.The ISS has a unique profile thatprovides students with interdisciplinaryeducation in the fields of epigenetics,gene regulation, DNA repair, functional32 Boehringer Ingelheim annual report 2012

corporate responsibilityperspectives for societyNEW SCIENTIFIC DIRECTORS1morphology of the nucleus and systemsbiology as well as bioinformatics.Exciting findings, surprising insightsScientists at the IMB have identifieda protein essential for initiating thedevelopment of male sex organs. Researchcarried out in the laboratory ofIMB director Christof Niehrs revealedthat the deletion of just one gene,GADD45g, results in complete sexreversal in male mice, making themappear female. The researchers furthermoreshowed that GADD45g exerts itseffect by regulating signalling cascadesthat control the gene SRY. For male sexorgans to develop correctly, it is essentialthat the gene SRY is expressed athigh levels within a very narrow timeframe in the embryo.2Interaction between public sector andprivate foundationThe IMB is a prime example of successfulcollaboration between publicauthorities and a private foundation.In 2010, the Boehringer IngelheimFoundation dedicated EUR 100m for aperiod of ten years to cover the scientificrunning costs of IMB. The state ofRhineland-Palatinate provided EUR50m for the construction of a modernbuilding to house IMB. Intensive networkingwith the most important biologicalresearch institutions strengthensinnovative research in Mainz.1 In September 2012, IMB appointedthe molecular biologist René Kettingas its second scientific director. He isconducting research on non-codingRNA (ncRNA), which he has shown toplay a key role in embryonic development.Furthermore, errors in the controlof gene activity by ncRNAs con tributeto major diseases, such as cancer andheart failure.2 In January 2013, the third scientificdirector Helle Ulrich, an internationallyleading expert on DNA damage response,joined IMB. Ulrich is investigatingthe involvement of two smallproteins, ubiquitin and SUMO, in theregulation of DNA repair. These proteinsfunction by attaching themselvesto other proteins and thus changingtheir properties.This study both identifies a new role forGADD45g and suggests a novel signallingpathway that could have importantimplications for research into disordersof sexual development. The researchhas been published in the high-impactjournal Developmental Cell.For more information aboutIMB:www.imb-mainz.deNew stimuli in research 33

CIRCUIT MECHANICS OF EMOTIONSUnderstanding how the brain works is one of science’s greatestchallenges. Traditional methods to explore the nervous system areof limited resolution in time and space. Advanced technologies incircuit genetics will close this gap and open up new perspectivesfor studying brain function and treating disorders.SHAPING THE FUTUREOF RESEARCHDeepening scientific knowledge is a central issue for BoehringerIngelheim. This is why we are the main sponsor of the the ResearchInstitute of Molecular Pathology (IMP) in Vienna (Austria). Thisfundamental biomedical research centre is one of the European“hot spots” for research in the area of molecular biology.WULF HAUBENSAKNeurobiologist and IMP researcherWulf Haubensak pursues the goalof understanding how emotions,such as fear or pleasure, are generatedin the brain. A StartingGrant by the European ResearchCouncil (ERC), which was awardedto him in 2012, will substantiallysupport his project.Research at the IMP spans a widerange of topics, broadly organisedinto four themes: life at the molecularand cellular levels, informationprocessing and storage in neural circuits,mechanisms of organismal developmentand disease, and interdisciplinaryapproaches that bring ideasand methods from other fields tobear on biological questions.The common goal in all of these areasis to elucidate the mechanisms andprinciples that underlie complex biologicalprocesses.Circuit neuroscienceFor over a century, neuroscientists reliedon functional-anatomical studiesof the brain to gain a rough understandingof its workings. Observationof patients with brain lesions and ofthe effects this had on their behaviouroffered the only clue to the functionalconnectivity of the brain, but itwas a random and unpredictablemethod. And it could not tackle thequestions that modern neurobiologyseeks to answer: what are the molecularmechanisms that process andstore information within neural circuits?And how do activity patternsin neural circuits give rise to perceptionand behaviour?Questions like these are addressed byresearch groups at the IMP. Exploitinggenetic tools, they identify, describeand manipulate the specific circuitsand molecules that are relevant for acertain behaviour, aiming at thesmallest functional units of the brain.When emotions arise, multiple brain34 Boehringer Ingelheim annual report 2012

corporate responsibilityperspectives for society211 Together with Max F. Perutz Laboratories (MFPL), theInstitute of Molecular Biotechnology (IMBA), the GregorMendel Institute (GMI) of the Austrian Academy ofScience and several biotech companies, and the IMPform the Campus Vienna Biocenter.2 Mouse oocytes.areas are involved: the neocortex, thebrain stem and the amygdala, an almond-shapedregion in the limbic system.Together, these components forma complex network of neuronal circuitswhose detailed structure andfunction are not yet understood.OptogeneticsA particularly powerful and versatiletool available to neuroscience is calledoptogenetics, a combination of geneticand optical methods. It allows the targetedand fast control of precisely definedevents in living organisms. Thetechnology has changed the perspectiveon solving some of the most intriguingpuzzles in neurobiology.At the IMP, the technology has quicklybeen adopted and ideally complementselectro-physiological and pharmacogeneticmethods to study howand where emotions are generated. Asmodels for these studies, the researchersuse mice that carry a light-sensitivealgal protein that is expressed in specificneurons. Upon exposure to light,these neurons become depolarised andfire off an electrical signal. Light canthus be used as an on-off switch to remotelycontrol neuronal circuits and,consequently, behaviour. The IMP scientistsalso address the question ofhow genes and pharmaceutical substancesaffect the activity of neuronalcircuits and influence emotions. Theyhope to gain valuable insights intoemotional dysfunctions, such as posttraumaticstress or anxiety disorders.In the future, this could lead to thedevelopment of specific “circuit therapies”to treat psychiatric disordersmore selectively and with fewer sideeffects.THE RESEARCH INSTITUTE OFMOLECULAR PATHOLOGY (IMP)The IMP is a fundamental biomedicalresearch institute locatedat the Campus Vienna Biocenter(Austria). The IMP’s scientists arepassionately committed to scientificdiscovery, seeking to unlocksome of life’s fundamental mysteries.The institute is supported byBoehringer Ingelheim and throughresearch grants from national andinternational funding agencies.For more information aboutIMP:www.imp.ac.atShaping the future of research 35

BIBERACH UNIVERSITY OF APPLIEDSCIENCENewly-qualified professionals fromBiberach University of Applied Scienceenter the world of pharmaceuticalbiotechnology.Source: HBCKNOWLEDGE TRANSFER BETWEENACADEMIA AND INDUSTRYSince 2006, a for Germany unique degree course – biopharmaceuticalbiotechnology – has been available at the Biberach University ofapplied sciences, provided in cooperation with, amongst others,Boehringer Ingelheim. The growing importance of pharmaceuticalbiotechnology in economic and research development led to theestablishment of the biotechnology faculty, which in the meantimehas 13 professors and 21 staff.INVESTMENT IN THE FUTURE OFBIOTECHNOLOGYA course of study offering excellentprofessional opportunitesthat supports the region’s strongpharmaceutical industry with ahighly educated new generationof academics – this is the motivationfor strengthened cooperationbetween practice and science,industry and university in the fieldof pharmaceutical biotechnology.The biotechnology cluster Ulm-Laupheim-Biberach-Ravensburg,which is unique in Europe, offersexcellent conditions here.Almost 300 young men and womenare meanwhile studying at the university,with the goal of being able towork, either at home or abroad, inthe many areas of biotechnological,pharmaceutical and biomedical industry.Pharmaceutical biotechnologyThe bachelor of science programmePharmaceutical Biotechnology is specificallyfocused on the developmentand production of biopharmaceuticals.Biberach University held its firstgraduation ceremonies in 2010, witha total of 56 biotechnologists receivingtheir bachelor of science degrees.Additionally, the study course “Industrialbiotechnology” has beenestablished at the university in 2011.Masters degree and doctorateGraduates can now also pursue furtherqualification in their dicipline.In a cooperation with Biberach Universityand Ulm University, a jointmasters programme in pharmaceuticalbiotechnology was established in2010. Based on a good bachelor degreefoundation in, for example,pharmaceutical biotechnology, biochemistryor molecular biology, studentscan receive tuition of a moreresearch-orientated nature.Since 2011, those obtaining an outstandingmasters qualification can alsostudy for a doctorate. A PhD course –pharmaceutical biotechnology – hasbeen established at the University ofUlm and Biberach University.36 Boehringer Ingelheim annual report 2012

corporate responsibilityperspectives for society11 Unique in Germany: the degree course in pharmaceuticalbiotechnology offered by Biberach University of Applied Sciencein cooperation with industry. Source: HBC/Stefan Sättle2 Simon Fischer, a Biberach University student, graduated with abachelor‘s degree in pharmaceutical biotechnology and alsogained a masters degree in biomedical engineering. Subsequently,he received a stipendium for the cooperative PhD course atBiberach University. He is investigating the effects on growth ofthe Chinese hamster ovary (CHO) cell – the most frequently usedcell in biopharmaceutical production. Source: HBC2Exciting professional fieldsThe interdisciplinarity of research atuniversities and in industry is an importantprecondition for being able todo justice to the future challenges tomedical substances regarding safetyand efficacy at reasonable cost. Pharmaceuticalbiotechnology addressesthe development of strategies for therapid and efficient transfer of the latestmedical and pharmacologicalfindings into safe and efficaciouspharmaceutical products. It thus operateson the dividing line between(bio)chemistry, medicines and biotechnology,thereby bringing togethermany aspects of modern life sciences.Important professional fields, dependingon the choice of focus area,are, for example, in biotechnologicaland pharmaceutical research and industry,in biotechnology, in pharmaceuticalplant construction, in qualitymanagement and in the quality controlfor the pharmaceutical and biotechnologicalindustries.BOEHRINGER INGELHEIM ULM UNIVERSITY BIOCENTER (BIU)Agreed in 2011, the cooperationbetween BoehringerIngelheim and the Universityof Ulm, Germany, has intensified.In a first round in May, a totalof 11 projects was approved.A second round call for applicationsyielded six furtherfunded projects in October.With this the total fundingvolume has been assigned tosix projects in cardiometabolicdiseases, five projects in respiratorydiseases and sixprojects in CNS diseases.All approved projects havebeen initiated.Knowledge transfer between academia and industry37

22° 41' 0" S, 14° 32' 0" Eswakopmund, namibia

esearch & developmentperspectives for medical innovationeckhard burbachretiree (formerly head oftalent management germany)ingelheim, germanyread more aboutthe photographers’ perspective

22° 41' 0" S, 14° 32' 0" Eswakopmund, namibia

eckhard burbachretiree (formerly head oftalent management germany)ingelheim, germanyperspectives for medical innovation

PERSPECTIVES FORMEDICAL INNOVATIONBoehringer Ingelheim’s commitment to emerging science as a basisfor new medicines grows ever stronger.We therefore focus on studying human disease, the subsets of eachdisease and establishing target-disease relationships which enableus to ask the right questions.Our aim to help patients by treating diseases in areas of high unmetmedical need both in our current therapeutic area focus and in newemerging disease areas.Our R&D activities include both small molecules and biotherapeutics,thereby allowing us to choose the most appropriate approach foreach therapeutic concept.RESEARCH AREAS[ in focus: six major areas ]THE BOEHRINGER INGELHEIM PIPELINE[ compounds in development, total 94 ]respiratorydiseasescentral nervoussystem diseasescardiometabolicdiseasesimmunologyoncologyinfectiousdiseases17respiratorydiseases9immunology10cns diseases3infectiousdiseases24oncology31cardiometabolicdiseases40 Boehringer Ingelheim annual report 2012

esearch & developmentperspectives for medical innovationcontents42 RESEARCH PARTNERSHIPS WITH ACADEMIAAND INDUSTRY44 ACCELERATING THE DEVELOPMENTOF NEW MEDICINES45 PHARMACOEPIDEMIOLOGY - A RISING FIELD48 PIONEERING TREATMENTS FOR CANCER52 HIGH DISEASE BURDEN OF HEPATITIS C55 INDUSTRY-LEADING DEVELOPMENTOF ORAL ANTIDIABETES DRUGS58 MOVING RESPIRATORY FORWARD60 THE FUTURE OF OUR RESEARCH AND DEVELOPMENTOUR RESEARCH AND DEVELOPMENT SITES[3 major and 3 specialized sites ]RESEARCH & DEVELOPMENT FACTS[ 2012 ]2135462,795m[ eur ]Investments in research anddevelopment of new drugs1 ridgefield, usa2 laval, canada3 biberach andingelheim, germany4 vienna, austria5 milan, italy6 kobe, japan7,492An average of more than 7,400employees worked in R&D.Status 31.12.2012Perspectives for medical innovation41

RESEARCH PARTNERSHIPS WITHACADEMIA AND INDUSTRYOur research teams can only tackle some of the most importantchallenges in medicine today if we work together with scientists andphysicians outside our organisation. We cooperate with academicinstitutions, non-profit research centres and external industrypartners. Together, we strive for excellence in both small moleculesand biotherapeutics and turn discovery into clinical practice.COOPERATIONSIN DIABETESIn order to develop new insightsinto the causes of diabetes,Boehringer Ingelheim has enteredinto cooperations with universities.Cooperations in diabetesBoehringer Ingelheim and GWT, acompany of the Technische UniversitätDresden AG (TUDAG) and the Departmentof Me dicine of the TechnischeUniversität Dresden (TU Dresden –Technical University Dresden) signed afive-year research collaboration agreementin 2012 to develop new insightsinto the causes of diabetes and the linkbetween excessive blood glucose, thehallmark of diabetes, and the seriouscomplications of the disease that canaffect many organ functions.We have initially defined six researchprojects, which range from exploringthe causes of insulin-producing betacell destruction to the cells and moleculestriggering diabetic complicationsin organs, such as the eye (diabeticretinopathy), which can lead to blindness,kidney (nephropathy), nerves(neuropathy) or skin (ulcerations).In 2012, Boehringer Ingelheim also enteredinto a four-year collaborationwith the Institute of Molecular HealthScience and the Institute of Food, Nutritionand Health, EidgenössischeTechnische Hochschule Zürich (ETHZurich) to achieve new insights into thedevelopment of diabetes and obesity.This joint collaboration effort will focuson investigating three cell typesthat may contribute to the onset of diseases,such as obesity and diabetes, becauseof their dominant role in metabolichomoeostasis.42 Boehringer Ingelheim annual report 2012

esearch & developmentperspectives for medical innovationCOOPERATIONS IN DRUGDISCOVERYAs our understanding of human disease improves,it has become clear that some molecular targets that havebeen considered “undrug able” in the past can today beaddressed with more unconventional chemical structures.Cooperations in drug discoveryWe have entered into several strategicpartnerships in the area of small moleculedrug discovery. These collaborationsprovide access to innovativescreening approaches as well as novelchemical libraries covering unchartedchemical territory for therapeutic conceptsof interest.Global strategic partnershipsNuevolution A/S is applying its proprietaryChemetics® technology to identifynovel small molecule lead structuresagainst drug targets of interest. TheChemetics® platform uses innovativeDNA labelling to allow fragmentbaseddrug screening of hundreds ofmillions of diverse small molecules.In our collaboration with PolyphorLtd, the MacroFinder® drug discoveryplatform will be applied to find effectivemodulators for complex biologicaltargets, again including protein-proteininteractions.With EnsembleTherapeutics, we willapply new drug discovery platforms,including its Ensemblin collection(a class of new macrocycles synthesisedusing DNA-programmed chemistry)for around five million compoundsto discover and advance novel drugcandidates.GLOBAL PARTNERSHIPSBoehringer Ingelheim has enteredinto several partnerships in thearea of small molecule drug discovery.Our collaboration with FORMA Therapeuticswill focus on researching smallmolecule drugs for oncology-relevantprotein-protein interactions. This includesscreening with the MAPPITscreening technology as well as optimisingany resultant hit compounds.Research partnerships with academia and industry 43

collaborate innovate accelerateTRANSCELERATE: COOPERATION WITH THE GLOBAL RESEARCH AND DEVELOPMENT COMMUNITY[ regulatory, public, government and industry-based entities are engaged. ]industryinitiativesregulatorybodiestransceleratebiopharma inc.research andcro communityhealthadvocacyACCELERATING THE DEVELOPMENTOF NEW MEDICINESClinical study execution has been identifiedas the initiative’s initial focus area.Five projects have been selected forfunding and development, including:Boehringer Ingelheim and nine other leading biopharmaceuticalcompanies have formed TransCelerate BioPharma Inc., a non-profitorganisation to accelerate the development of new medicines.GLOBAL INDUSTRY ALLIANCESTransCelerate’s work builds onexisting industry collaborationswhich closely align with projectactivities. We will involve industryalliances, including Clinical DataInterchange Standards Consortium(CDISC), Critical Path Institute(C-Path), Clinical Trials TransformationInitiative (CTTI) and InnovativeMedicines Initiative (IMI),regulatory bodies, including theUS Food and Drug Administration(FDA) and the European MedicinesAgency (EMA), and contractresearch organisations (CROs).TransCelerate BioPharma Inc. waslaunched to identify and solve commondrug development challenges, with thegoals of improving the quality of clinicalstudies and bringing new medicinesto patients faster.Shared research and solutionsTransCelerate aims to collaborate acrossthe global research and developmentcommunity and share research and solutions,which will eliminate inefficienciesthat drive up R&D costs as well assimplify and accelerate the delivery ofnew medicines for patients.• Development of a shared user interfacefor investigator site portals• Mutual recognition of study site qualificationand training• Development of risk-based site monitoringapproach and standards• Development of clinical data standards• Establishment of a comparator drugsupply model44 Boehringer Ingelheim annual report 2012

esearch & developmentperspectives for medical innovationTHE GLOBAL EPIDEMIOLOGY TEAMThe global epidemiology team at Boehringer Ingelheim isgrowing and actively working to attract and to retain talent.The team is highly motivated, engaged and innovative. Itworks interdisciplinarily and globally to help respond to challengingpublic health questions using real-world data.PHARMACOEPIDEMIOLOGY –A RISING FIELDPharmacoepidemiology contributes substantially to drugdevelopment and to the advancement of public health byanswering clinically relevant questions that provide physiciansand patients with information to ensure healthier lives.The main tasks of pharmacoepidemiologyat Boehringer Ingelheim are to:• Inform the planning, design andconduct of clinical studies• Study the use, safety and effectivenessof drugs in large populations• Determine the benefit-risk profiles ofour drugsIntegration into drug developmentTo develop drugs and to address patients’needs, it is important to integrateepidemiological data early and consistentlyinto the drug development process.A newly established process willensure that epidemiological data areavailable when:• Decisions are made on unmet medicalneeds and target patient populationsin order to configure clinicaldevelopment programmes to best addresscurrent healthcare needs• Potential adverse effects are evaluatedand need to be put into perspectivein relation to the backgroundrisk in the target population• New treatments are to be monitoredfor their safety and effectivenessDEFINITIONPharmacoepidemiology is theapplication of epidemiologicalknowledge and methods to studythe effects, beneficial and adverse,of drug products in human populations.It evaluates who thepatients are and how the patientsrespond to treatments.Pharmacoepidemiology – a rising field45

GLORIA-AF®Registry programme for patientswith atrial fibrillation56,00056,000 patients in over50 countries2,200Around 2,200 sites will contributedata to assess the comparativeeffectiveness of new oralanticoagulants.Epidemiological studiesEpidemiological studies based on realworlddata are critically important.They are often requested by authoritiesand are also increasingly used to determinewhether and how well therapiesare covered by public and commercialhealth insurers. Boehringer Ingelheimis keen to learn more about how treatmentswork in real-world settings.Epidemiological studies may be basedon newly collected or on existing data.While the former type allows exact assessmentof all clinically relevant data,they can be time and cost intensive. Incontrast, existing healthcare data (e. g.claims, electronic medical records –EMR) represent the routine care of allpatients and are less resource-intensive,but often lack detailed clinical informationand the necessary quality.Impact of epidemiological studiesBoth types of studies, based on newlycollected as well as on existing data,have their advantages and complementeach other. Together, they contributeto the totality of evidence. Two examplesrelated to pradaxa® help to elucidatethis.Collecting new data – GLORIA-AF®The Registry Programme on Long-Term Oral Antithrombotic Treatmentin Patients with Atrial Fibrillaiton(GLORIA-AF®) was initiated byBoehringer Ingel heim and is scheduledto collect data from up to 56,000 patientsin over 50 countries. Around 2,200 siteswill contribute data to assess the comparativeeffectiveness of new oral anticoagulants.Until data become available,additional database studies will give initialinsights into pradaxa® treatmentsin real-world settings.Analysis of existing dataBefore pradaxa® was launched, astudy based on electronic medicalrecords was undertaken to better understandthe target population, theircharacteristics and comorbidities. Thisprovided important insights into the46 Boehringer Ingelheim annual report 2012

esearch & developmentperspectives for medical innovationCOOPERATION WITH UNIVERSITIES24Since well-trained pharmacoepidemiologistsare difficult to find, Boehringer Ingelheim findsitself in an international competition for talent.1We are actively working to address this bycommitting to long-term investment in trainingprogrammes and by working closely with anetwork with academic institutions.A network with academic partners, includingHarvard University, McGill University, Universityof Stellenbosch and Hannover MedicalSchool, has been established and collaborativeteaching programmes are now underway.31 harvard university2 mcgill university3 university of stellenbosch4 hannover medical schoolprofiles of the patients currently beingtreated with and without anticoagulanttherapy.to build high-quality analytic capabilitiesto assess the value of our productsin routine care.Subsequently, a long-term active monitoringsystem has been set up in collaborationwith Harvard Medical School,designed to collect information aboutthe use of pradaxa® and other oral anticoagulantsbased on electronic healthcaredata.To analyse data from millions of patients,appropriate technology and softwareneeds to be in place that allowsour epidemiologists to complete studiestimely, accurately and reproducibly.Boehringer Ingelheim is continuing tobuild such capabilities.Opportunities with increasingdata sourcesThe increasing availability of claimsand electronic medical record (EMR)data requires pharmaceutical companiesto ensure capabilities for expeditiouslyaccessing, analysing and interpretingreal-world data.Direct access to large claims and EMRdatabases has become a key success factorand the foundation for proactivedrug monitoring. Boehringer Ingelheimis expanding the number of strategicallyselected databases and is continuingPharmacoepidemiology – a rising field 47

BOEHRINGER INGELHEIM ONCOLOGY FRANCHISE[ overview of compounds in development ]head and neck cancer [ scchn ]*AFATINIB PHASE IIIacute myeloid leukaemia [ aml ]*VOLASERTIB PHASE IIIbreast cancer [ bc ]AFATINIB PHASE IIInon-small cell lung cancer [ nsclc ]*AFATINIB PHASE IIININTEDANIB PHASE IIIovarian cancer[ oc ]NINTEDANIB PHASE IIIliver cancer [ hcc ]*NINTEDANIB PHASE IIcolorectal cancer [ crc ]*NINTEDANIB PHASE IIrenal cell cancer [ rcc ]*NINTEDANIB PHASE II* Can affect both males and females. AML source is bone marrow/spinal cord.PIONEERING TREATMENTSFOR CANCERBoehringer Ingelheim is applying scientific discoveries and researchadvances in cancer biology to develop a wide range of novel therapiesin areas of unmet medical needs in both solid tumours and haematologicalmalignancies. We are committed to the clinical developmentof pioneering treatments for cancer.Our oncology pipeline is evolving anddemonstrates the company’s continuedcommitment to advance in this diseasearea. The current focus of clinical researchincludes compounds in threeareas: signal transduction inhibition,angiogenesis inhibition and cell-cyclekinase inhibition.AfatinibAfatinib is an irreversible ErbB familyblocker which inhibits signal transductionof all kinase receptors from theErbB family, which is known to play acritical role in the growth and spreadof the most pervasive cancers and cancersassociated with high mortality,lung, breast, and head and neck cancers.Afatinib is currently in phase IIIdevelopment in non-small cell lungcancer (NSCLC), head and neck cancer,and breast cancer.Lung cancerLung cancer is the most common andmost deadly form of cancer in the world:it accounts for 1.6 million new cases inEurope annually. Because of its poorprognosis, 1.38 million deaths each yearare attributable to lung cancer.Most patients with advanced or metastaticlung cancer are treated withchemotherapy regimens. Due to unsatisfactorytreatment results in patientswith advanced non-small cell lung cancer,research and development projectsare accelerating the identification ofnew treatment strategies for this disease.LUX®-Lung 3 trialLUX®-Lung 3 is a large, randomised,open-label, phase III registration studycomparing afatinib to a combinationof two chemotherapy agents, peme-48 Boehringer Ingelheim annual report 2012

esearch & developmentperspectives for medical innovationPATIENT IDENTIFICATIONIn collaboration with QIAGEN N.V., a companiondiagnostic (Thera-Screen® EGFR RGQ) was developed.It allows identification of those patients with anEGFR mutation positive tumour who are eligible fortargeted therapy with afatinib.AFATINIB – POTENTIAL PERSONALISED TREATMENTOPTION FOR LUNG CANCERAfatinib in NSCLCs has demonstrated unprecedentedefficacy as a first-line treatment for patients with EGFRmutations. Because of its specific benefit for those EGFRpositive, mutation status patients, it is a personalisedapproach.We believe that health systems will acknowledge a personalisedapproach using biomarkers to identify patientsbenefiting from therapy with afatinib.trexed and cisplatin, as first-line treatmentfor patients with stage IIIb orIV NSCLC harbouring an epidermalgrowth-factor-receptor(EGFR) mutation.disease-related symptoms, such as dyspnea(shortness of breath), cough andchest pain. Afatinib also significantlydelays the deterioration of these symptomscompared with chemotherapy.The LUX®-Lung 3 results, presentedin 2012, showed that lung cancer patientstaking afatinib as a first-linetreatment lived for almost one yearbefore their tumour started to growagain (progression-free survival – PFSof 11.1 months) versus just over half ayear (PFS of 6.9 months) for those onstandard chemotherapy (pemetrexed /cisplatin).Importantly, patients taking afatinibwith the most common EGFR mutations(del19 and L858R, accounting for90% of all EGFR mutations) lived withafatinib for well over a year withoutprogression (PFS of 13.6 months) versusjust over half a year (PFS of 6.9 months)for those in the comparator arm.In addition, a standard questionnaireassessing the quality of life of lung cancerpatients revealed that afatinib treatmenttranslated into an improved qualityof life.Submission of afatinibA marketing authorisation applicationfor afatinib as a treatment for EGFR(ErbB1) mutation positive NSCLC hasbeen submitted to the European MedicinesAgency (EMA) for Europe as wellas in the USA , Canada, Asia, Japan andother countries.The delay in disease progression wasalso associated with an improvement ofPioneering treatments for cancer49

AFATINIB BLOCKS THE ERBB RECEPTORSErbB Family receptors (such as EGFR andHER2) are frequently overexpressed on cancercell surfaces. These have been associatedwith a variety of tumour types and are associatedwith poor prognosis and advancedstagecancer.An irreversible inhibition of all receptors ofthe ErbB family may provide a more successfulblockade of the signalling pathway.cellwallMODE OF ACTION OF AFATINIB*[ targeting the erbb family ]egfr[erbb1]egfrerbb3egfrher2[erbb2]egfrerbb4her2proliferation – invasion – metastasisher2erbb3her2erbb4Afatinib* acts on all ErbB family receptors,therefore blocking the key pathwaysinvolved in cell growth.* Afatinib acts on all ErbB family receptors, thereforeblocking the main pathways involved in cell growth.AFATINIB – ORALLY APPLICABLEThe development of a pharmaceuticaldispensing form forafatinib that can be used to administerthe active ingredient topatients in different dosages andin an oral application form werechallenges which had to besolved.As afatinib can be applied orally,development of film-coated tabletsin various dosages was chosen.The sensitivity of afatinib tomoisture represented a challengefor formulation, process andpackaging development of theproduct.This was resolved through targetedselection of the auxiliary tabletmaterials, optimisation of themanufacturing process and use ofmoisture-protective packaging.Head and neck cancerHead and neck cancer is the termused to describe malignant tumoursoriginating in the upper aerodigestivetract, including the oral cavity, larynx,pharynx and nasopharynx. The vastmajority (90%) of head and neck cancersare squamous cell carcinomas(HNSCC) arising from the epithelialmembranes of these regions. More than50% of locally advanced head andneck cancer will recur and there is anurgent need for better treatment optionsbesides current systemic chemotherapy.Patients with recurrent or metastatichead and neck cancer still have a poorprognosis, with a median survival ofonly 6–10 months.Overexpression of the epidermalgrowth factor receptor (EGFR), alsoreferred to as ErbB1, is found in atleast 90% of head and neck cancersand strongly correlates with poorprognosis and survival.LUX®-Head and Neck 1 and 2The clinical study LUX®-Head & Neck 1evaluates if afatinib can prolongprogression-free survival (primaryendpoint) and improve overall survivalin patients with recurrent/metastatichead and neck cancer whoprogress in comparison with intravenousmethotrexate. LUX®-Head &Neck 2 evaluates whether afatinib canprevent the recurrence of the diseaseand improve overall survival in patientswith locally advanced diseaseafter radiochemotherapy.Breast cancerBreast cancer is the leading cause ofcancer deaths in women globally.HER-2 positive breast cancer is anaggressive form of this disease. It isthought that in approximately 30% ofadvanced breast cancer cases, womenoverexpress the HER-2 protein.LUX®-Breast 1 trialLUX®-Breast 1 is an open-label randomisedphase III trial to investigate50 Boehringer Ingelheim annual report 2012

esearch & developmentperspectives for medical innovationAFATINIB – SYNTHESIS OF ACTIVE PHARMACEUTICAL INGREDIENTDue to the high number of large-scaleinternational clinical studies with morethan 3,500 patients, supplying afatinibfilm-coated tablets, various referencepreparations and co-medications was alogistical challenge for the global ClinicalTrial Supplies Unit (CTSU) and themanufacturing units.To safeguard the extensive clinical programmeand to ensure market supplypost-approval, a standalone oncologicalproduction facility was set up in Ingelheim.This was established in order tomeet the special safety requirementsfor afatinib. At this dedicated facility,all necessary manufacturing steps forafatinib can be covered, from theinitial weighing of the substancethrough dry granulation and tablettingto tablet film-coating and packaging.1 Synthesis of active pharma ceuticalingredients for afatinib in Ingelheim.1the safety and efficacy of afatinib plusvinorelbine compared with trastuzumabplus vinorelbine in patients withmetastatic HER-2 positive breast cancerwho received prior treatment withtrastuzumab.VolasertibVolasertib is an investigational inhibitorof polo-like kinase (Plk), an enzymethat regulates cell division (mitosis).This inhibition is intended toresult in prolonged cell cycle arrestand ultimately cell death (apoptosis).Acute myeloid leukaemia (AML)AML is one of the most common typesof leukaemia in adults, accounting for25% of all adult leukaemias in thewestern world. AML has one of thelowest survival rates of all leukemias.The most common treatment approachis intensive remission inductiontherapy. However, many patientsover 65 years of age are ineligible forthis approach, which involves largedoses of chemotherapy over a periodof five to seven days.Clinical trial results in AMLPositive phase II results from an interimanalysis of the randomisedphase I/II study involving volasertibin newly diagnosed patients withacute myeloid leukemia (AML) consideredineligible for intensive remissioninduction therapy were published.In this study, higher rates ofobjective response and an improvementin event-free survival were observedin patients treated with volasertibin combination with low-dosecytarabine (LDAC) compared withpatients treated with LDAC alone.Based on these positive results, aphase III study, POLO-AML-2, withvolasertib in combination with LDACwas initiated.LIFE WITH LUNG CANCERPATIENT PORTALThe portal is a comprehensive onlineresource for individuals coping with adiagnosis of lung cancer, and for familyand friends providing support andcare for their loved ones. It focuses onengaging and empowering patientssuffering from cancer and puts theindividual’s own journey at the heartof its navigation.www.lifewithlungcancer.infoFor more information go to:www.thewhiteroom.infowww.youtube/oncologyPioneering treatments for cancer51

HEPTATIS C VIRUS (HCV) INFECTIONHCV infection represents a significant global burden withhigh prevalence and death rates.Estimated chronic HCVinfections in 2012200Most HCV infectionsbecome chronicInfections often go unnoticed due toa lack of symptoms but, if left untreated,complications can be fatal.150,000,000100disease can progress with fewsymptoms for many years20120acutecan be resolvedwithin six months4 OUT OF 5 BECOMECHRONICchroniccan last a lifetimeand needs treatmentsevere liver inflammation withlong-term complicationsliver failure and potentialtransplantHIGH DISEASE BURDENOF HEPATITIS CDespite recent treatment progress, the burden of hepatitis C virus(HCV) infection on patients and physicians remains huge. BoehringerIngelheim is researching a better HCV medication that reduces thechallenge and the burden for the patient.HEPATITIS C VIRUS(HCV)Hepatitis C virus is a smallenveloped virus containing apositive-strand RNA genome.HCVerso clinical trial programmeWe maintain a rigorous HCV clinicaltrial programme, HCVerso, designedto find solutions to the challenges ofthis disease.Our clinical research extends to diverseHCV patient populations across theworld, including HIV co-infected patientsand those who have previouslyfailed treatment. The aim is to improvecure rates, shorten treatment and eliminateinterferon, which is the backbone ofcurrent HCV treatment and is associatedwith severe side effects, including heartfailure, blood poisoning, white blood cellreduction, depression and vision loss.Our HCV portfolioThe portfolio is directed towards advancinginhibitors that target essentialviral enzymes, such as the HCV serineprotease and RNA polymerase. We areinvestigating the two direct-acting antivirals(DAA) faldaprevir and BI 207127.FaldaprevirFaldaprevir, a potent investigationalnext-wave once-daily HCV NS3/4Aprotease inhibitor, is designed to targetthe viral reservoir within the liver andinhibit viral replication. The compoundis optimised to target genotype 1 HCV,the most difficult type to effectivelycure with current therapy.Phase III trial programmeSTARTVersoThe nearly completed multistudy phaseIII trial programme, STARTVerso,evaluates faldaprevir combined withpegulated inferon/ribavirin in bothtreatment-naïve, experienced and HIVco-infected patients with chronic genotype1 HCV.52 Boehringer Ingelheim annual report 2012

esearch & developmentperspectives for medical innovationSTAGES OF LIVER DISEASESEnduring inflammation of the liver by hepatitis C can lead toliver fibrosis. The next stage of the disease can be liver cirrhosis.Hepatitis C is also the main cause of liver cancer.healthyliverliverfibrosislivercirrhosislivercancerThe study programme is in progress atmore than 350 sites in 15 countries andincludes more than 2,000 patients. Thestudy programme evaluates sustainedviral response (SVR) as the primaryclinical endpoint, which is consideredto be the viral cure. Results from thephase III studies are expected in thefirst half of 2013.SOUND-C2 trialSOUND-C2 is an open-label, randomised,phase IIb study that enrolled362 treatment-naïve HCV genotype 1patients into one of five treatment arms.The study evaluated the safety and efficacyof the interferon-free polymodaltherapy of faldaprevir and BI 207127,with and without ribavirin.BI 207127 – A potent polymeraseinhibitorBI 207127 is an investigational nonnucleosideNS5B RNA-dependentpolymerase inhibitor that has the potentialto eliminate interferon fromHCV treatment when combined withfaldaprevir and ribavirin/RBV.BI 207127 works by blocking a specificstep in the viral lifecycle, targeting a siteof this polymerase enzyme and consequentlypreventing HCV from replicating.Phase II trials of this interferonsparingregimen (SOUND-C2) havebeen completed and phase III HCVersotrials investigating this regimen havebeen initiated.Final data from this trial in phase IIb(SOUND-C2) show high viral cure ratesin genotype 1 patients. When looking atall patients collectively, including themost challenging to cure, a viral curewas achieved for 70%.NEWSHOMEOur website is the one-stop shopfor clear, concise and easy tounderstand information abouthepatitis C.www.NewsHome.comHigh disease burden of hepatitis C53

1viral entryrnareleasernatranslatedinto proteins[+] rna23DIRECT-ACTING ANTIVIRAL AGENTS (DAA)6[+] rna [–] rnaThe hepatitis C virus is a small enveloped virusthat contains a positive-strand RNA genomethat encodes a polyprotein that is processed byhost and viral proteases into 10 proteins thatare required for RNA virus replication.assemblyand releasernareplicationpolyproteinprocessingbi 207127ns5b polymeraseinhibitorfaldaprevirns3/4a polymeraseinhibitorBI 207127 –NS5B POLYMERASE INHIBITORThe HCV NS5B polymerase is anessential viral enzyme that catalysesvirus genome replication and hasattracted research interest sinceinhibition of polymerase activity offersan opportunity for therapeuticintervention. Boehringer Ingelheimhas led the optimisation of a class ofnon-nucleoside NS5B inhibitors exemplifiedby BI 207127.The NS5B inhibitors that have recentlyprogressed in clinical trials are expectedto become an important componentfor a more effective and bettertolerated anti-HCV regimens. A recentparadigm shift towards the developmentof interferon-sparing therapiesusing combinations of DAAs withcomplementary modes of action, suchas NS3 protease inhibitors in combinationwith NS5B inhibitors, is envisagedto provide efficacy with improvedsafety and tolerability whileminimising the emergence of resistantvirus.FALDAPREVIRNS3/4A PROTEASE INHIBITORThe NS3/4A protease is one of theessential viral proteins and pioneeringresearch at Boehringer Ingelheim todiscover inhibitors of this viral enzyme.It led to the first clinical trialwith the NS3 protease inhibitor BILN2061 (ciluprevir) that clinically validatedthe NS3 protease as an attractivedirect antiviral target.Potent second wave NS3 protease inhibitorssuch as Boehringer Ingelheim’sfaldaprevir, currently in phase 3 clinicaltrials in combination with PegIFN/RBV,may be expected to provide simplifieddosing regimens and a further improvementin treatment options.FDA fast-track designationThe US Food and Drug Administration(FDA) granted fast-track designation forthe interferon-based development programmesfor faldaprevir in combinationwith PegIFN/RBV for genotype 1patients and the interferon-free regimenof faldaprevir and BI 207127 plusribavirin/RBV.This process is selected by the authoritywhen drugs to treat serious diseaseswith high unmet medical need shouldbe developed. Patients with HCVshould receive important new medicationsas in an attempt to get importantnew drugs to people with HCV as soonas possible.54 Boehringer Ingelheim annual report 2012

esearch & developmentperspectives for medical innovationTYPE 2 DIABETES MELLITUSType 2 diabetes results from an imbalancebetween insulin sensitivity and insulin secretiondue to an impaired beta cell function in thepancreas. The picture shows the pancreas.INDUSTRY-LEADING DEVELOPMENTOF ORAL ANTIDIABETES DRUGSDiabetes mellitus, literally translated, means “honey-sweet flow”.But there is nothing sweet about it. It leads to a plethora of damagein the body, particularly with regard to the small and large blood vessels,resulting, for example, in peripheral artery disease, myocardial infarction,stroke, chronic renal failure, blindness and premature death.An estimated 371 million people sufferfrom diabetes. This is expected to rise to552 million within the next 20 years.Each year, around four million people diefrom diabetes. 90% - 95% of these havetype 2 diabetes, which is a chronic andprogressive condition characterised byimpaired insulin secretion from the pancreasand insulin resistance of tissues.A growing global trend in obesity is oneof the key causes of this rise in diabetesprevalence.High unmet medical needSeveral medicines are available for thetreatment of diabetes, but most of themfurther increase body weight in thelong run, reinforcing a vicious cycle.For some of them, the so-called sulfonylureadrugs, treatment lowers bloodsugar, but nevertheless the range ofblood sugar variations remains high.Better treatments are urgently neededand they need to be tested as to whetherthey actually improve patients’ livesin the long run and allow patients tolive longer.40%At diagnosis, approximately40% of type 2 diabetes patientsalready exhibit some form ofpre s ent with some form of tissuedamage resulting from elevatedblood glucose levels, such asheart disease, stroke, renal impairmentand nerve damage.Industry-leading development of oral antidiabetes drugs55

12THE MAIN COMPLICATIONS OF DIABETES3The risk of stroke in newly diagnosedtype 2 diabetes is more than doubled.4Microvascular damage to the retina fromdiabetes (diabetic retinopathy).People with diabetes are two to four timesmore likely to have cardiovascular disease.Damage to the kidney filtering systems fromdiabetes (diabetic nephropathy).Damage to the nerves from diabetes(diabetic neuropathy) is a leading cause offoot wounds and ulcers.TRAJENTA® AND JENTADUETO®Both drugs are labelled for thetreatment of type 2 diabetes.5Diabetes Alliance – Boehringer Ingelheimand Eli Lilly & CompanyBased on its own research programmes,Boehringer Ingelheim has identifiedseveral drug candidates from multiplenew drug classes with promising characteristics.We are clinically developing them inan alliance with Eli Lilly & Company.The first result from this pipeline is linagliptin(trajenta®), which was firstlaunched in 2011, also as the single-pillcombination linagliptin and metformin(jentadueto®), which was first launchedin 2012. The second compound is empagliflozin,which will be filed for registrationin 2013.TRAJENTA® – linagliptinLinagliptin belongs to the drug class ofDPP4-inhibitors.trajenta® has been approved very rapidlyin all major markets and approvalfor fixed-dose combinations with metformin(jentadueto®), or as add-on toinsulin treatment, was obtained in2012. It can also be administeredwithout dosage adjustment in patientswith impaired renal function, whichfrequently occurs in diabetic patients.CAROLINA® trialIn an unprecedented effort to determinethe long-term benefit in cardiovascularcomplications, BoehringerIngelheim has performed a large outcomestudy versus a representative ofthe sulfonylurea drug class, glimepiride,the CAROLINA® study.Linagliptin is currently the only DPP4-inhibitor which is compared to an activecomparator in a large outcomestudy, and the CAROLINA® study hascompleted enrollment. Large outcomestudies will determine the beneficialeffects of linagliptin with a level ofcertainty not available for any otheroral antidiabetic drug.EmpagliflozinEmpagliflozin represents a novel classof antidiabetic drugs, the SGLT2-inhibitors.56 Boehringer Ingelheim annual report 2012

esearch & developmentperspectives for medical innovationLINAGLIPTIN DEVELOPMENT PROGRAMMEEMPAGLIFLOZIN DEVELOPMENT PROGRAMMEphase ιιι25 studiesapprox. 5,000 patientsphase ιιι11 studiesapprox. 7,800 patientsphase ιι5 studies,approx. 1,200 patientsphase ι51 studiesapprox. 1,500 patientscardiovascular outcome studycarolina®6,000 patients for approx. 6 yearsphase ιι8 studies,approx. 2,000 patientsphase ι26 studiesapprox. 800 patientscardiovascularoutcome studyempa-clarityapprox. 7,000 patientsfor approx. 5 years2004 2006 2008 2010 2012 2014 2016 2018 2004 2006 2008 2010 2012 2014 2016 2018In contrast to all other drugs, these donot slow glucose uptake from the gutor change its disposition within thebody, but promote its excretion via thekidneys, turning the former diagnosticmeasure of sugar in the urine into atherapeutic approach.change in HbA1c from baseline comparedto placebo, was met. Filing forregulatory review in the USA, Europeand Japan is expected in 2013.Weight loss and bloodpressure loweringPooled data from the phase II studieshave demonstrated that empagliflozintreatment not only avoids weight gain,but actually causes some weight lossand additionally some blood pressurelowering, addressing multiple importantcontributors to overall health.SGLT2-INHIBITORS - MECHANISM OF ACTIONEmpagliflozin in phase III studiesIts efficacy and safety is determinedin 12 multinational phase III studieswith over 14,500 patients, includinga cardiovascular outcome study thatis one of the largest of its kind.In the four completed phase III clinicaltrials for empagliflozin, the primaryefficacy endpoint, defined as significantglucosesglt2-inhibitorproximaltubuleglucoseurinary glucose excretion,loss of caloriesSGLT2-inhibitors do not slowglucose uptake from the gut orchange its disposition within thebody, but promote its excretionvia the kidneys, turning theformer diagnostic measure ofsugar in the urine into a therapeuticapproach.Industry-leading development of oral antidiabetes drugs57

ASTHMAAsthma is a chronic disease characterised byairway inflammation and bronchoconstriction.Symptoms include recurring periods of coughing,chest tightness, shortness of breath andwheezing.The air passages becomeinflamed, mucus-filledand narrowed, making itdifficult to breathe.As many as 300 million people worldwide haveasthma. Epidemiological data have shown thatmany adults with asthma remain symptomatic,despite current treatment options and haveasthma exacerbations (attacks).normal openairwaysinflamed airwaysduring an asthmaattackmucusMOVING RESPIRATORY FORWARDnarrow airwaysbecause ofinflammatoryairway swellingBoehringer Ingelheim has a long history and a leadership position inthe field of respiratory diseases and has an ongoing commitment tohelp patients suffering from respiratory diseases with the developmentof new medications.PHASE III TRIAL PROGRAMMEThe phase III trial programme inrespiratory includes: tiotropium inasthma, tiotropium + olodaterolfixed-dose combination in COPDand nintendanib in idiopathicpulmonary fibrosis.Tiotropium in asthmaA significant proportion of asthmapatients remain symptomatic, despitecurrent treatment options, and mayhave asthma exacerbations. Tiotropiumis a long-acting anticholinergicbronchodilator, which helps to keepthe airways open.Data from the PrimoTinA-Asthmaphase III studies presented in 2012show that tiotropium delivered via therespimat® Soft Mist Inhaler (SMI)device increases the time to first severeasthma exacerbations in patients whoremain symptomatic despite treatmentwith at least inhaled corticosteroids/long-acting beta agonists (ICS/LABA).Tiotropium also significantly improvedlung function in symptomatic asthmapatients on ICS/LABA.The PrimoTinA-Asthma studies arepart of our comprehensive ongoingphase III trial programme namedUniTinA-Asthma, which wasdesigned to establish the efficacyand safety of tiotropium respimat®in patients with symptomatic asthma.UniTinA-Asthma includes a numberof clinical studies in adults, adolescentsand children with symptomatic asthmaacross the spectrum of asthma severity.These studies involve over 4,000 patientsin more than 150 sites worldwide.58 Boehringer Ingelheim annual report 2012

esearch & developmentperspectives for medical innovationIDIOPATHIC PULMONARY FIBROSISIdiopathic pulmonary fibrosis results in a progressiveloss of lung function, associated with aclear deterioration in quality of life for patients.There is a high unmet need for effective newtreatments which may substantially change theclinical course of this deadly disease. Importantgoals are to influence the deterioration inlung function and to reduce the rate of exacerbations.normalipfO 2O 2O 2O 2O 2OO 22O 2O 2AFFECTS AS MANY AS14-43out of100,000PEOPLEcommon symptomsAnd is seen morefrequently in men.Resultant scarring/honeycombingin the lung restricts breathing andoxygen exchange.shortnessof breathchronicdry coughfingerclubbingTiotropium + olodaterol for COPDThe TOviTO phase III trial programmeis evaluating the potential benefits oftiotropium and olodaterol in a oncedailyfixed-dose combination using therespimat® Soft Mist Inhaler (SMI) device.The pivotal one-year registrationprogrammes for tiotropium and olodaterolfixed-dose combination are ontrack, with expected publication of resultsin 2014.Olodaterol is a complementary bronchodilatorthat has been studied extensivelyand developed as an ideal partnerto tiotropium in order to provide maximumbrochodilation for COPD patients.The scheduled announcement of thephase III clinical trial results for olodaterolis scheduled for 2013.options available to date. Approximately50% of patients with IPF die fromthe disease within two to five years afterdiagnosis. There is a high unmet clinicalneed for effective licensed agents.Phase II data from the TOMORROWtrial show that nintedanib 150 mg bidhas the potential to reduce disease progressionby slowing the annual declineof lung function, reducing acute exacerbationsand preserving quality of life.Nintedanib is currently in phase IIIclinical development. Two identicaltrials (INPULSIS-1 and INPULSIS-2)have been initiated and the last patientwas included in September 2012. Thistrial is being carried out in 24 countriesin Europe, the Americas, Asia andAustralia.NINTEDANIB IN IPFNintedanib is an investigationalsmall molecule tyrosine kinaseinhibitor (TKI) in development forIPF. It targets the growth factors:the vascular endothelial growthfactor receptor (VEGFR), fibroblastgrowth factor receptor (FGFR) andplatelet-derived growth factor receptor(PDGFR). These receptorshave been shown to be potentiallyinvolved in pathomechanismsof pulmonary fibrosis. By blockingthese signalling pathways that areinvolved in fibrotic processes, it isbelieved that nintedanib has thepotential to reduce disease progression,slowing the decline oflung function.Nintedanib in idiopathicpulmonary fibrosisIdiopathic pulmonary fibrosis (IPF) is aprogressive and severely debilitatinglung disease with high mortality, forwhich there are only limited treatmentMoving respiratory forward59

THERAPEUTIC AREA (TA) REVIEW CORE TEAMThe TA Review core team, which worked for over nine months in across-functional effort on the development of the Disease Map2025 defining potential future focus areas for our R&D+M efforts.THE FUTURE OF OUR RESEARCHAND DEVELOPMENTWe remain strongly committed to creating real value for patientsby constantly developing medicines in areas of high unmet medicalneed. We continuously review the focus of our Prescription Medicinesbusiness at the disease and indication level in oder to chart ourdirection in a rapidly changing external environment.Disease Map 2025The Disease Map 2025 defines goalsand key areas in research, developmentand medicine (R&D+M) in which wewant to develop our Prescription Medicines(PM) business. While the adjustmentof our research focus is ongoing,we at the same time make investmentsin R&D+M that are above the industryaverage.GOAL: BRINGING NEWMEDICINES TO PATIENTSThe Disease Map 2025 will helpus to achieve our goal of bringingnew medicines to patients. In orderto effectively and efficientlyenable this, we have defined specificactions for our establishedtherapeutic areas as well as areasof cross-TA opportunities.A cross-functional team reviewed ourfuture aspirations in the PM businessdivision by considering patients’ andsocietal needs for better medicines.Emphasis was placed on fundamentaltrends, unique opportunities andspecial challenges for our established,emerging and potential new researchareas.The results of this review have helpedus to draft the Disease Map 2025,which provides recommendationson our future direction.By assessing a large number of diseases,we were able to prioritise the most attractiveopportunities for our portfolio.These include diseases that are alreadypart of our current R&D focus as wellas new diseases. For both current andnew diseases, the target product profiles(TPPs) are very ambitious, with a strongemphasis on disease modification oversymptomatic treatment.Disease-modifying approachesWithin the therapeutic areas the emphasiswill be placed on disease-modifyingapproaches in larger and establishedindications. Furthermore, we willcontinue to focus on accessing external60 Boehringer Ingelheim annual report 2012

esearch & developmentperspectives for medical innovationCHANGING PHARMACEUTICAL ENVIRONMENT[ challenges for boehringer ingelheim ]R&D + M at Boehringer Ingelheim faces thechallenge of identifying and address highunmet medical needs as well as identifyingsynergies in disease and technology clusters.discoverydevelopmenton-marketLower salesexpectations(price, pricecuts)Access, reimbursementand pricing increasinglya challengeEarlier andmore aggressivecompetitionby genericsHIGH UNMETMEDICALNEEDSHigherdevelopmentcostsLowerprobabilityof successIncremental innovationnot recognised anymoreRisk-adjusted cash flows (cumulative)Nominal cash flows (cumulative)innovation for novel drug concepts andemerging technologies. In addition, wewill focus on smaller indications with ahigh unmet medical need.Disease clustersSynergies in researching diseasesshould be exploited in the future byidentifying groups of diseases from oneor more therapeutic areas which couldbe targeted by the same mechanism(disease cluster).Technology clustersIn addition to the TA-specific aspects,the company worked on general topicswith the primary goals of identifyingtechnology clusters. Such clusters willenable drug discovery by complementingour technical approaches, therebyenlarging the exploitable target spaceand increasing the chances of therapeuticadvance.Such technologies could include therapeuticvaccines, gene therapy, regenerativemedicine and new biotherapeutictechnologies.FOCUS ON CREATIVITY ANDGLOBAL SCIENCE NETWORKWe count on the creativity ofour employees to respond tothe challenges of the future.Our goal is to bring togetherunprecedented science in thecontext of a global network tohelp us define the attractivedrug concepts of the future.Potential advantages of such diseaseclusters are a fast path to clinical proofof concept with an increased probabilityof success by starting clinical developmentin indications with the strongestconcept-to-disease link. For all diseaseclusters, potential synergies in researchand development can be leveraged.The future of our research and development61

6° 59' 15" N, 125° 16' 15" Eapo, philippinesBoehringer Ingelheim annual report 2012

esearch our businesses & developmentperspectives for medical better health innovationread more aboutthe photographers’ perspectiveChapter

icardo f. solitariadistrict managermanila, philippines6° 59' 15" N, 125° 16' 15" Eapo, philippinesBoehringer Ingelheim annual report 2012

esearch & developmentperspectives for medical better health innovationChapter

PERSPECTIVES FORBETTER HEALTHBoehringer Ingelheim drives progress in the form of medicines,technologies and solutions that help people.We also evaluate innovative models of a healthcare provision andopportunities for cooperative innovation through pilot programmes,partnerships and investments in the field of integrated healthcaresolutions that deliver greater health benefit for patients.Here we are always led by people’s medical needs. BoehringerIngelheim is the patients’ partner that makes available innovativemedicines for better health.GROUP SALES[ 2012 ]GROUP SALES BY REGION[ in eur million ]14,691m[ eur ]+ 11.5 %2012 2011% ofgroupsalesAMERICAS 6,905 6,087 47 %EUROPE 4,194 4,037 29 %ASIA, AUSTRALASIA, AFRICA (AAA) 3,592 3,047 24 %64 Boehringer Ingelheim annual report 2012

our businessesperspectives for better healthcontents66 [ prescription medicines ]67 CARDIOVASCULAR DISEASES70 REDUCING STROKE RISK IN ATRIAL FIBRILLATION73 CONTROLLING HYPERTENSION AND CARDIOVASCULAR PROTECTION76 LIVING BETTER WITH DIABETES79 THE TRUE FACE OF COPD82 PERSPECTIVES ON INNOVATIVE BUSINESS MODELS84 MARKET ACCESS FOR NEW MEDICINES86 PASSIONATELY ENABLING GROWTH88 [ consumer health care ]89 STAY HEALTHY TO ENJOY YOUR FREEDOM90 FROM PRESCRIPTION TO SELF-MEDICATION92 [ biopharmaceuticals & biosimilars ]93 BIOPHARMACEUTICALS – MEDICINES FOR THE FUTURE94 INNOVATION DRIVERS IN BIOPHARMACEUTICALS97 BIOSIMILARS – PERSPECTIVES FOR PATIENTS98 [ animal health ]99 COMPREHENSIVE ANIMAL HEALTH MANAGEMENT101 FRONT LINE RESEARCH104 GLOBAL PERSPECTIVES IN ANIMAL HEALTH106 A FUTURE FOR VULTURES IN INDIAOUR TOP THREE PRODUCTS[ 2012 ][ spiriva® ][ micardis® ] [ pradaxa® ][ eur ]3,562m[ eur ]1,623m[ eur ]1,108mPerspectives for better health65

“My photo shows Frau Röhrigfrom a small village in theHunsrück upland (Kleinich).The lady is over 90 years oldand radiates a great joy ofliving. That’s a perspective thatmany people would wish forthemselves, living an activeand healthy life in old age.”andreas webertechnical assistantingelheim, germany49° 53' 12" N, 7° 11' 85" Ekleinich, germany

our businessesperspectives for better health#3.1PRESCRIPTION MEDICINESCARDIOVASCULARDISEASESBoehringer Ingelheim has for decades offered a widerange of medications for the treatment and preventionof cardiovascular diseases.88 %ischaemicstrokeSTROKE TYPES ANDINCIDENCE12 %haemorrhagicCardiovascular knowledgeBoehringer Ingelheim offers medicationsfor the treatment and prevention of:• Thrombo-embolic diseases with afocus on acute and recurrent stroke• Acute myocardial infarction• Hypertension, with focus on cardioprotectionStroke preventionThe acute phase is not the only stage ofa stroke that has to be managed. Strokeprevention, whether primary or secondary,is extremely important.Risk factors for strokeThe most important modifiable riskfactors for stroke are high blood pressureand atrial fibrillation.Other modifiable risk factors includehigh blood cholesterol levels, diabetes,smoking, heavy alcohol consumptionand drug use, lack of physical activity,as well as obesity and unhealthy diet.Interventions to prevent strokeThe best medical interventions shouldbe primarily aimed at weight reduction,promotion of regular exercise, reducingalcohol consumption or stoppingsmoking. Nonetheless, medicationis the most common method of strokeprevention and offers a scientificallyproven benefit for patients in terms ofstroke preventing.Stroke treatment and preventionA stroke is defined as an acute loss ofneurological function due to an interruptionin the blood supply to a part ofthe brain. Strokes can be ischaemic(reduced blood and oxygen supply toan area of the brain) or haemorrhagic(caused by bleeding).Ischaemic strokes occur when there isa blockage in a vessel by one of the following:a blood clot in a vessel, atheroscleroticplaques or an embolus fromanother vessel.OUR PORTFOLIO IN STROKEPREVENTION AND TREATMENTAcute treatment of stroke:actilyse® (alteplase)Prevention of stroke in patientswith atrial fibrillation:pradaxa® (dabigatran etexilate)Secondary prevention of stroke:aggrenox® (dipyridamol/ASA)Prevention of stroke (organprotection), treatment ofhypertension:micardis® (telmisartan)micardisplus® (telmisartan/HCT)Cardiovascular diseases 67

OUR CARDIOVASCULAR PORTFOLIOaggrenox®Secondary prevention of stroke,1998 in EU, 1999 in USAmetalyse®Acute myocardial infarction,2000 in USA, 2001 in Europepradaxa®2008 approval forprimary prevention ofvenous thrombo-embolismpradaxa®2010 approval forstroke prevention inatrial fibrillationactilyse®1987 acute myocardial infarction,1996 in USA, 2002 in Germany,acute stroke treatmentmicardis®1998 hypertension,2008 cardioprotectionmicardisplus®2002 hypertensiontwynsta®2009 hypertension1987 1998 200020022008 2009 2010Ischaemic core(brain tissuedestined to die)Penumbra(salvageablebrain area)An untreated patient losesapproximately 1.9 millionneurons every minute in theischaemic areaTREATMENT OF ACUTEISCHAEMIC STROKEOption to reduce neurologicaldamage by thrombolyticreperfusionReperfusion offersthe potential toreduce the extent ofischaemic injuryHaemorrhagic strokes occur whena blood vessel ruptures or leaks intothe brain tissue or subarachnoidspace.Time is brain – act fastIt is imperative that a stroke is recognisedearly, the stroke patient is takendirectly to a stroke unit, and diagnosisand reperfusion treatment follow asquickly and efficiently as possible.The earlier treatment is initiated, thebetter the outcome. Internationalguidelines recommend a door-toneedletime (DTN) of 1 hour or less.Acute stroke management – ACTILYSE®actilyse® (alteplase or recombinanttissue plasminogen activator, rt-PA), isa registered intravenous thrombolyticfor the treatment of an acute ischaemicstroke.The use of intravenous actilyse®revolutionised the approach to thetreatment of acute ischaemic stroke15 years ago.Patients should be treated within the4.5-hour treatment window. Time-totreatmentwith actilyse® is an importantdeterminant of 90-day and oneyearfunctional outcomes in acuteischaemic stroke. The earlier thatactilyse® is given in the therapeuticwindow to eligible ischaemic strokepatients, the better their outcomes.Reducing door-to-needle timesReducing door-to-needle (DTN) timesand increasing the portion of eligibleacute ischaemic stroke patients who aretreated are important goals. In numerousclinical studies, providing feedbackon clinical performance indicators hasbeen shown to improve clinical performanceand patient outcomes.QUICK initiativeBoehringer Ingelheim’s QUICK (QUalityImprovement of aCute IschaemicstroKe patient management) initiativeaims to help hospitals improve theiracute stroke patient management processby significantly reducing delays allalong the management process, from68Boehringer Ingelheim annual report 2012

our businessesperspectives for better healthOUR PORTFOLIO IN STROKE TREATMENTAND PREVENTION[ actilyse® ] [ aggrenox® ] [ pradaxa® ]F.A.S.T.The F.A.S.T (Face, Arms, Speech,Time) algorithm is a quick methodfor assessment of a potential stroke:• Asymmetry of the face – facialdroop on one side• Weakness on one side of thebody – typically, unable to raiseboth arms in parallel• Slurred speech – or inability tounderstand or formulate speech• Other problems, includingconfusion, visual disturbance,dizziness etc.the onset of symptoms to potentialtreatment.Secondary prevention of strokeSurvivors of a transient ischaemic attackor stroke have an increased risk ofanother stroke, which is a major sourceof increased mortality and morbidity.AGGRENOX®aggrenox®/asasantin®retard (extendedreleased dipyridamole + acetylsalicylic acid (ASA)) is indicated to reducethe risk of secondary stroke in patientswho have had a TIA or completedischaemic stroke due to thrombosis.PROFESS®, the world’s largest trial inrecurrent stroke prevention, includedmore than 20,000 patients. The studycompared aggrenox® with clopidogrel,while also analysing whether telmisartan,on top of other standardtherapy, would further reduce the riskof recurrent stroke when comparedwith placebo. In the two antiplateletregimens, the patients had a comparablerisk for stroke as well as for myocardialinfarction or vascular death.QUICK INITIATIVETo improve the efficiency of thestroke patient management process,the quick project is dividedinto four major phases for eachparticipating hospital.ReassessmentCheck upof the strokeunitsImplementationof the actionplanDevelopmentof actionplanTrials in stroke preventionThe prevention of stroke was speci ficallyinvestigated in PROFESS® andstroke was also included in the primaryendpoint of ONTARGET andTRANSCEND®.Analysis on structure andtime managementStakeholders todecide on actionsReduce door-toneedletimeEnsurecontinuityCardiovascular diseases69

HOW ATRIAL FIBRILLATION (AF)LEADS TO STROKEAF leads to serious secondary diseases.Blood clots (thrombi) can form in theatria that can dislodge and travel inthe bloodstream, potentially blockingblood vessels in the brain and leadingto ischaemic stroke.541 Embolus (clot) forms2 Atrial fibrillation in the left atrium3 Embolus (clot) enters blood streamand travels towards brain4 Embolus blocks blood flow to partof the brain5 Brain starved of oxygen leadingto stroke and brain damage321REDUCING STROKE RISK INATRIAL FIBRILLATIONFor patients with the cardiac arrhythmia atrial fibrillation (AF) anticoagulationtherapy is essential for stroke prevention. pradaxa®(dabigatran etexilate) belongs to a new generation of oral anticoagulants,which are fundamentally reshaping the medical landscapeby significantly reducing thrombo-embolic events.Strokes happen in AF when pools ofblood form in the heart due to failureof the atria to contract properly. Bloodsticks together in the atria and formsclots, which can travel through thebloodstream and block blood flow to thebrain, causing a stroke. Approximately92% of AF-related strokes are ischaemic.They tend to be severe, with an increasedprobability of death and disability.A stroke can change everything in amoment for patients and their families.The best protection against stroke isknowledge of the disease and appropriatetreatment. Anticoagulation therapyis essential for stroke prevention in AFpatients.Atrial fibrillation and stroke –an unholy allianceThe most common cardiac arrhythmiaatrial fibrillation increases the risk ofstroke by a factor of five. AF causes theheart to beat too fast, too slow or withan irregular rhythm.Up to three million people worldwidesuffer strokes related to AF each year.Appropriate anticoagulation therapycan help to prevent AF-related strokesand improve overall patient outcomes.Over one million patient-yearsClinical experience of pradaxa®, an anticoagulantfrom the class of the directthrombin inhibitors, is considerable andcontinues to grow, reaching over onemillion patient-years in the year 2012(including all licensed indications in over80 countries), and provides the greatestbody of clinical experience for pradaxa®of all novel oral anticoagulants.70Boehringer Ingelheim annual report 2012

our businessesperspectives for better healthPRADAXA®-DEVELOPMENT AT BOEHRINGER INGELHEIMLead molecule in the directoral thrombin inhibitorproject works in vivo.Dabigatranetexilate isselected fordevelopment.Phase II studiesin about 2,300patients.First patientsare enrolledin RE-LY®.European approval for dabigatranfor the preventionof VTE after hip or kneereplacement surgery.Research on a directoral thrombin inhibitorbegins.The dabigatranmolecule isdiscovered.First batch ofdabigatransuccessfullysynthesised.Innovativecapsuledeveloped.RE-VOLUTION®clinical trialprogrammestarted.FDA approvespradaxa® for strokerisk prevention inpatients with AF.pradaxa® approvedin the EUfor stroke preventionin AF.1992 1996 1997 2002 2004 2005 2008 20102011Sustained, long-term protectionData from the RELY-ABLE® study presentedin 2012 supports the long-termsafety profile and efficacy of pradaxa®.Highly consistent with the findingsfrom the landmark RE-LY® trial, the resultsobserved during the additionalfollow-up demonstrate the sustainedprotection over a treatment duration ofmore than four years and support thebenefit of both doses for tailored patienttreatment.Safety confirmedIn 2012, the positive risk-benefit profileof pradaxa® has been confirmed by independentregulatory appraisals of realworlddata led by the US Food and DrugAdministration (FDA) as well as the EuropeanMedicines Agency (EMA), whichhighlight that the drug offers importantbenefits to patients.Further researchBoehringer Ingelheim remains dedicatedto advancing science and ensuring thatphysicians have all the tools they mayrequire to effectively manage patients, includingin critical situations. BoehringerIngelheim is therefore currently developinga specific antidote to the anticoagulationeffect of pradaxa® to add tothe existing reversal strategies alreadyavailable in clinical practice.Unprecedented insightsWe continue to collaborate with regulatoryauthorities worldwide. In Germany,we have taken the unprecedented stepof actively and regularly sharing safetydata with physicians – achieving a newlevel of transparency and openness.Furthermore, unique insights have beenprovided through the development of‘Finding the right molecule’, a bookguiding readers through the innovativedevelopment journey of pradaxa®.Challenges of reimbursementpradaxa® addresses the demands foran effective treatment option, providingsustained and reliable stroke prevention.At the same time, health care systemsworldwide face increasing costrestrictions, providing a challengingenvironment for reimbursement. Still,PRADAXA®, PRADAXAR®,PRAZAXA®is a novel reversible oral directthrombin inhibitor that blocks theactivity of thrombin, the centralenzyme in clot formation. It isapproved for the primary preventionof venous thrombo-embolism(VTE) in adults who have undergoneelective total hip or kneereplacement surgery and was thefirst new anticoagulation therapyin over 50 years to be approvedfor the prevention of stroke andsystemic embolism for adultpatients with non-valvular atrialfibrillation who are at risk ofstroke.Reducing stroke risk in atrial fibrillation71

FINDING THE RIGHT MOLECULE“Finding the right molecule”, a bookthat guides readers through theinnovative development journeyof pradaxa®.Find out more here:www.heartofstroke.commost reimbursement agencies have concludedthat pradaxa® is a cost-effectiveuse of health care resources.1 Mission 1 MillionIn cooperation with leading medicaland patient organisations, such as theWorld Heart Federation and the AtrialFibrillation Association, the 1 Mission1 Million initiative has continued toraise awareness of AF and its link tostroke around the world. Communitybasedaction is at the heart of this globalinitiative, and during 2012 thefoundations of phase 2 were launchedto ensure ongoing engagement in 2013with key stakeholders – patients,healthcare professionals and thirdparty groups.1 Mission 1 Million – three approaches• Supporting projects around the worldthat aim to help prevent AF-relatedstroke.• The petition calls upon people to helpsave lives from potentially disablingor fatal AF-related strokes. The globalpetition calls upon health organisationsaround to world to fully recogniseAF as a serious condition and asa risk factor for stroke through bettermanagement, stroke prevention andeducation.• Encouraging people directly affectedby AF to share their unique storiesand experiences.72Boehringer Ingelheim annual report 2012

our businessesperspectives for better healthCARDIOVASCULAR PROTECTIONBEYOND BLOOD PRESSURE CONTROL[ brain]Ultimate goal – prevention of stroke,heart attack, kidney failure[ kidney ]CONTROLLING HYPERTENSION ANDCARDIOVASCULAR PROTECTION[ heart ]Controlling blood pressure is one of the most important factors toreduce cardiovascular events. The primary cardiovascular concern ofphysicians is treating high blood pressure. The goal is also to preventthe life-threatening events of stroke, heart attack or kidney failurethat can result from complications of high blood pressure.micardis® (telmisartan) is an angiotensinreceptor blocker (arb) registeredfor the treatment of hypertension andthe reduction of cardiovascular morbidityand mortality. This was achieved asa result of a vast and robust body of research,including the ONTARGETstudy, one of the most ambitious andfar-reaching research programmes everconducted with an arb.Evolution of the global brandmicardis® was discovered and developedby Boehringer Ingelheim andwas launched in 1998. The product iscurrently registered in 112 countriesand marketed in 104 countries worldwide.It is the foundation for the telmisartanfranchise, which also includesmicar dis plus® and twynsta®.Organ protection and cardiovascularpreventionHistorically, the point of difference formicardis® was “full 24-hour bloodpressure protection”, which includedcover for the risky early morning hours,where other medicines can wear off. In2006, this shifted to its “powerful 24-hour blood pressure lowering effect”,which was felt to be more meaningfulby doctors.MICARDIS®For the treatment of hypertension.For the reduction of cardiovascularmorbidity in patients with manifestatherothrombotic cardiovasculardisease (history of coronary heartdisease, stroke or peripheral arterialdisease) or type 2 diabeteswith documented target organdamage.Controlling hypertension and cardiovascular protection73

PATIENTS AT CARDIOVASCULAR RISKMost hypertensive patients need morethan just simple blood pressure control.Preserving vascular health and protectingvital end organs is essential too.micardis®, micardisplus® and twynsta®are indicated for the management ofpatients at added risk of cardiovascularevents. These include patients withobesity, diabetes, uncontrolled hypertensionand metabolic syndrome.obesitydiabetesuncontrolledhypertensionmetabolicsyndromeTWYNSTA®/MICAMLO®(telmisartan / amlodipine)Add-on therapy in adult patientswith not adequately controlledblood pressure on amlodipine andreplacement therapy in adult patientsreceiving telmisartan andamlodipine from separate tablets.24-hour control of blood pressure is animportant feature. micardis® aims furtherto protect of end-organs, such asthe brain, heart and kidneys.In 2008, Boehringer Ingelheim completedthe ONTARGET study – a largeand comprehensive clinical trial designedto investigate the direct cardioprotectiveeffect of micardis® beyondthe effects resulting from the loweringof blood pressure.This landmark trial gave clinical prooffor micardis® to prevent stroke, myocardialinfarction (MI) and cardiovasculardeath and led to the indication forcardiovascular prevention beyondblood pressure control.Reducing cardiovascular riskmicardis® is labelled for patientswith hypertension, as well as those atrisk of cardiovascular events. It is anangio tensin receptor blocker (ARB)that is clinically proven to preventstroke, mi and cardiovascular deathand is indicated for cardiovascularprevention beyond blood pressurecontrol.Single-pill combinationsTreatment guidelines recognise that atleast two-thirds of patients need twoantihypertensive agents to effectivelycontrol blood pressure; a figure thatrises to nine out of ten in patients withco-morbidities, such as obesity, diabetesand metabolic syndrome, which are allcardiovascular risk factors. Single-pillcombinations (SPCs) that are effectiveand well-tolerated offer a major benefitfor these patients.MICARDISPLUS®micardisplus® is labelled for hypertensivepatients at risk of cardiovascularevents who need blood pressure controland will benefit from adding a diuretic,e. g. the elderly and where oedema is oftena problem. micardisplus® deliversan efficacy that lasts for a full 24 hours.It contains telmisartan, the only arbwith a cardiovascular prevention indicationand the diuretic hydrochlorothiazide(HCTZ).74Boehringer Ingelheim annual report 2012

our businessesperspectives for better healthMICARDIS® PROFILE[ unique chemical structure ][ telmisartan ]micardis® is different to other ARBsas it also contains a non-tetrazolecarboxylic acid ring, shown in red(in chart right). The distinctivegroupings in the structure ofmicardis® give it properties thatmake it different from all other ARBs.TWYNSTA®, MICAMLO®twynsta® is labelled for hypertensivepatients who require intensified bloodpressure control. twynsta® delivers theeffective and prompt blood pressure reductionsneeded to help patients reachtheir goal, and the power of twynsta®lasts for a full 24 hours. twynsta® containstelmisartan, the only ARB with acardiovascular prevention indicationand the calcium channel blocker amlodipine.The TEAMSTA® switch studyTEAMSTA® switch has been a 12-week,open-label, multi-centre study, whichforms part of the telmisartan plus amlodipinephase III/IV clinical trials programme.The results from the TEAMSTA®switch study, presented in 2012, showedthat twynsta® delivers prompt bloodpressure control in the majority of patientswith uncontrolled hypertensionon renin-angiotensin system (RAS)blocker monotherapy and provides furtherconfirmation of its excellent efficacyin controlling high blood pressure.These latest findings add to a robust evidencebase, confirming that twynsta®is a valuable treatment option for patientswith hypertension and is highlyeffective in helping patients who areuncontrolled to reach their blood pressuregoals.OUR LANDMARK TRIALSmicardis® (telmisartan) has beeninvestigated in the most ambitiousand far-reaching research programmeconducted with an arb.In the clinical trial programmesONTARGET, PROTECTION andPROFESS®, over 58,000 patientswere enrolled to investigate theefficacy and cardiovascular protectiveeffects of telmisartan.micardis® (telmisartan) is one ofthe most studied antihypertensivesin clinical trials and is widely usedwith a total of more than 40 million(including micardisplus®)patient-years since approval.Controlling hypertension and cardiovascular protection75

TRAJENTA® / TRADJENTA®trajenta® is a prescriptionmedicine that is used along withdiet and exercise to lowerblood sugar in adults with type 2diabetes. The once-daily tabletis used along with diet andexercise to improve glycaemiccontrol.A STRONG ALLIANCE FOR DIABETES TREATMENT OPTIONSIn January 2011, Boehringer Ingelheim and Eli Lilly and Companyhave formed an alliance in the field of diabetes that centres on fourpipeline compounds representing several of the largest treatmentclasses.We understand the ongoing need to research and develop newer,targeted medications that are specifically designed not only to provideeffective, long-term reductions in blood sugar levels but alsoavoid the limitations and tolerability issues of the current treatments.trajenta® / tradjenta® and jentadueto® are the first productsmarketed under the alliance.LIVING BETTER WITH DIABETESManaging diabetes is a life-long job for patients. Increasing awarenessabout the importance and benefits of diabetes control is thereforethe key objective of strategies for a better life with this chronic disease.Beyond our focus on drug treatments for diabetes, we are eagerto establish tools and programmes that can help patients to make lifestyleand behaviour changes.371 millionPEOPLE HAVE DIABETESAn estimated 371 million peopleworldwide have diabetes, a seriouschronic condition that occurswhen the body either does notproperly produce, or use, the hormoneinsulin.Type 2 diabetes is the most commontype, accounting for an estimated90% to 95% of all cases. Thenumber of diabetes cases is expectedto grow considerably in thecoming years due to unhealthylifestyles.Living with type 2 diabetes requiresthat patients develop a range of competenciesthat allow them to take greatercontrol over the treatment of their disease.This includes:• Education and support for selfmanagement(including reductionof lifestyle risk factors).• Effective drug treatment strategies formaintaining normal blood glucoseand lipid levels, and normal bloodpressure.• Effective surveillance for early detectionand treatment of complications.The most important aspect is that thepatients stick to a chosen regimen andproperly manage their lifestyle change.Steps towards better healthIn future, patients with certain diseases,especially chronic ones, should be treatedwith a more holistic approach beyonddrug treatment. This requires educationwith the explicit aim of enhancing activeinvolvement of patients so that they becomepartners in their healthcare process.Boehringer Ingelheim is therforeconcentrating on new business modelsand healthcare innovation.Need for educational toolsEver more patients with type 2 diabeteshave comorbidities and new treatmentsoptions have raised expectations and redefinedthe standards for treatment success.In particular, the close link betweentype 2 diabetes and the onset andprogression of nephropathy presents acommon – and often underestimatedand misunderstood – treatment challenge.In order to meet this task effectively,practitioners need answers to sev-76Boehringer Ingelheim annual report 2012

our businessesperspectives for better healthJENTADUETO®jentadueto® is a twice-daily combinationof two diabetes medicines, linagliptin andmetformin. It can be used along with dietand exercise to help control blood sugar inadults with type 2 diabetes when treatmentwith both compounds is appropriate.Our Diabetes Health Lounge:The website combines educational videosand games, research tools and informationon type 2 diabetes.For more information see:www.diabeteshealthlounge.comeral questions. How many patients withdiabetes have some degree of renal impairment?What is their prognosis? Howdoes it impact their quality of life? Andlastly, what are the consequences for thedoctor, in terms of treatment approaches?Diabate © websiteSponsored by an unconditional educationalgrant from Boehringer Ingelheim,Diabate © is a resource for all medicallyqualified practitioners with an interestin the treatment of diabetes. It bringstogether experts in diabetes, diabeticrenal impairment and cardiovasculardisease in an ongoing programme toreview, discuss and understand the latestscientific developments relevant tothe overall topic of diabetes and renaldisease.Web, smartphone and type 2 diabetesWe have partnered with the digitalhealth management company Healthrageous,Inc. to study a web and smartphone-basedlifestyle behaviour modificationprogramme. The goal is to usetechnology to produce an easier andmore effective way for patients to selfmanagetheir diabetes and improvetheir health status. Study participants,who must have been diagnosed withtype 2 diabetes for at least six months,experience a digital technology interventioncombining digital coaching anda wireless glucose meter transmittingdata to clinical monitors.My Well Planner In 2012, Boehringer Ingelheim and EliLilly and Company introduced the MyWell Planner lifestyle improvementprogramme in the USA. The free, comprehensiveresource offers customisededucational content to help adults withtype 2 diabetes make simple lifestylechanges to improve their health. Sampletopics include general informationabout type 2 diabetes, better eating habits,building physical activity into dailylife, taking medication and communicationstrategies.The programme also creates progressreports, which patients can print outDIABATE © WEBSITEIt brings together diabetes expertsin an ongoing programme toreview, discuss and understandthe latest scientific developmentsrelevant to the overall topic ofdiabetes and renal disease.For more information see:www.diabate.tvLiving better with diabetes77

WORLD DIABETES DAYWorld Diabetes Day (WDD) is celebrated every year on 14 NovemberIt engages millions of people worldwide in diabetes advocacy andawareness. The campaign draws attention to issues of paramountimportance to the diabetes world and keeps diabetes firmly in thepublic spotlight. In 2012, Boehringer Ingelheim for the fourth consecutiveyear supported the Life for a Child programme by donatingthe proceeds of a 3km employee run that was held at the company’sheadquarters. A total of EUR 20,000 was donated to the programmeinitiated by the International Diabetes Federation (IDF).and take to their healthcare providersto discuss during visits.A day to raise awarenessOn each World Diabetes Day (WDD) on14 November, Boehringer Ingelheimconducts a number of diabetes awarenessraisingactivities among its employees.In 2012, an internal communicationcampaign designed to increase theunderstanding of the global diabetes epidemicpromoted healthy diet and activelifestyle. Special lunchtime menus wereoffered with the opportunity to let employeestest their blood sugar levels.10,000 children with diabetes in developingcountries through fundraisingand monetary contributions.The financial support that BoehringerIngelheim provided in 2012 will go directlyto diabetes centres in these countries,enabling them to provide the ongoingclinical care and diabetes educationthat children need to stay alive.MY WELL PLANNERMy Well Planner is designed tohelp adults with type 2 diabetesand their healthcare providerswork together to set small lifestylegoals at their own pace, buildingtoward bigger goals in the future.Patients in the USA can registerand create their own “My WellPlanner” account at:www.mywellplannerinfo.com.Support for the “Life for a Child”programmeOver 450 employees participated in a3km run with the knowledge that eachkilometer completed would be convertedinto a financial contribution to the“Life for a Child” programme initiatedby the International Diabetes Federation(IDF).This international aid programme provideslife-saving support to more than78Boehringer Ingelheim annual report 2012

our businessesperspectives for better healthCHRONIC OBSTRUCTIVE PULMONARY DISEASE (COPD)triggers includepeople experiencephysical and emotional impactpollutants andnoxious particlescigarettesmokebreathlessnesscoughingcopdexacerbationssociallyisolatedworkabsenteeismwheezinglimitedphysicalactivityincreasedsputumproductionscareddepressedTHE TRUE FACE OF COPDChronic obstructive pulmonary disease (COPD) has a lot offrightening aspects. You can’t breathe, you’re finding yourselfgasping for air after climbing a few stairs and are not able toaccomplish simple activities.COPD is caused by the long-term inhalationof pollutants, most commonlycigarette smoke, that progressivelyand permanently reduces the ability ofadults to breathe well and maintainactive lives.SPIRIVA® – over 31 million patientyearsin clinical useThe year 2012 signifies an importantten-year milestone for the COPD medicationspiriva® (tiotropium) sincelaunch of the HandiHaler® in 2002.31 millionIn clinical use for over 31 millionpatient-years, once-daily spiriva®is the most prescribed COPDmaintenance treatment worldwide.COPD, ranked fourth globally amongthe leading causes of death, is characterisedby breathlessness (dyspnoea),coughing, wheezing and increased sputumproduction. Due to its progressivenature, the early diagnosis and treatmentof COPD is essential to preventand/or reduce potential complicationsand exacerbations (worsening of symptoms)associated with the disease.In clinical use for over 31 million patient-years,once-daily spiriva® is themost prescribed COPD maintenancetreatment worldwide. This position isrooted in the wealth of clinical trialdata available to prove the clinical efficacyof spiriva® in reducing breathlessness(dyspnoea) and the risk of exacerbations,as well as in improvingpatients’ quality of life.The true face of COPD 79

SPIRIVA®: 10 YEARS AND MORE OF CLINICAL INNOVATION AND COMMITMENT TO COPD PATIENTSGlobal Initiative for ChronicObstructive Lung Disease(GOLD) is formed.spiriva® for the treatment ofCOPD delivered via the Handi-Haler® device is launched inEuropean and Asian countriesspiriva® HandiHaler®receives US FDA approvalDevelopment of tiotropiumbromideforCOPD began.GOLD releases its first report:Global Strategy for theDiagnosis, Management,and Prevention of COPD.International guidelines recommendinhaled long-acting bronchodilatorsas first-line maintenancetherapy for COPD.spiriva® becomes theworld’s most-prescribedCOPD maintenancetreatment.1985 1997 2001 2002 200320042005SPIRIVA®spiriva® is delivered via the Handi-Haler®, a breath-actuated, singledosedry powder inhaler, or byspiriva® respimat® Soft Mistinhaler, a propellant-free, newgeneration inhaler that combinesinnovative technology with theproven efficacy of spiriva®.Over the years, more than 175 clinicaltrials with the active ingredient tiotropiumin COPD have been conductedinvestigating a broad range of patientsin studies of up to four years.spiriva® has an established efficacy andtolerability profile, as demonstrated inmultiple clinical trials and extensivereal-world experience spanning overten years.spiriva® provides proven efficacy in abroad range of COPD patients, rangingfrom maintenance-naïve patients andacross varying severities of airflowlimitation (GOLD 2 to 4) to those patientswith or without concomitant respiratorytherapy, including long-actingbeta-antagonists.Reflected in global COPD guidelinesThe Global Initiative for Chronic ObstructiveLung Disease (GOLD) recognisesthat some of the key goals oftreatment are to alleviate the impactof symptoms, including breathlessness,and reduce the risk of adverse healthevents, such as exacerbations.In its report Global Strategy for Diagnosis,Management, and Prevention ofCOPD from 2011, GOLD extensivelyrevised the COPD assessment aspectswith the addition of the individualisedevaluation of symptoms and exacerbationrisk. This assessment now not onlyincludes spirometry tests but also acombination of a patient’s severity ofsymptoms and a history of exacerbations.The 2011 GOLD report recommendslong-acting anticholinergics such asspiriva® for every patient requiringmaintenance therapy (first choice for patientgroups B – D and second option forpatient group A) . This recommendationwas solely based on data for the longactinganticholinergic spiriva®. The recent2013 update of the GOLD’s GlobalStrategy for the Diagnosis, Management,and Prevention of COPD, reflects thesame choice recommendations on theuse of long-acting anticholinergics asproposed in the 2011 GOLD Report.80Boehringer Ingelheim annual report 2012

our businessesperspectives for better healthspiriva® respimat® Soft Mist Inhaler,which delivers tiotropium via a soft mistcloud, successfully secures Europeanregistration in 25 member states.GOLD update recommends longactinganticholinergics such asspiriva® for every patient requiringmaintenance therapy.spiriva® has over 31 millionpatient-years ofextensive real-worldexperience.UPLIFT® demonstrates thatspiriva® sustains lung functionimprovements over four years andimproves survival rate.POET-COPD® study results demonstratethe superiority of spiriva®over salmeterol in reducing the riskof COPD exacerbations.spiriva® is currently availablein over 120 countries and continuesto be the most widelyprescribed maintenance therapyfor COPD worldwide.2007 2008 2009 201020112012 and beyondConfirmed value to the patientAmong external institutions conductinghealth technology assessments(HTAs), the German IQWiG (Institutefor Quality and Efficiency in HealthCare) has examined whether spiriva®offers a perceptible benefit to patientscompared with placebo and other COPDdrugs. The IQWiG considers it proventhat, in comparison with the group oflong-acting beta-agonists (salmeterol,formoterol and indacaterol), tiotropiumdelivered via the HandiHaler® exhibitsadditional benefit in terms of both exacerbationfrequency and the need forhospitalisation as a result of exacerbation.A “proof” of evidence is the highestIQWiG evidence grading possible.COMBIVENT® RESPIMAT® in the USAFollowing FDA approval in 2011,combivent® respimat® was launchedin the US market in 2012. This marksan important milestone, as it is the firstproduct to be delivered in the propellant-freeand innovative respimat® inhaler.The respimat® inhaler is a newgeneration inhaler with a unique deliverymechanism, which is preferred bypatients. It is the platform for our futurerespiratory products.COMBIVENT® RESPIMAT®The launch of combivent®respimat® for COPD in 2012was the first introduction of therespimat® inhaler on theUS market.The IQWiG assessment was largelybased upon the head-to-head POET-COPD® study, comparing the effects onacute worsening of the disease (exacerbations)of two long-acting bronchodilatorsspiriva® and salmeterol. The studyshowed significantly better outcomeswith spiriva® in reducing COPD exacerbationscompared with salmeterol.The true face of COPD 81

BEHAVIOUR CHANGE INTYPE 2 DIABETESThe goal of the Healthrageous’ internetbaseddiabetes programme is to leveragetechnology in a way that makes thepersonalised journey of self-managingdiabetes easier and more effective.PERSPECTIVES ON INNOVATIVEBUSINESS MODELSMore complex technologies are able toscreen and provide medical care fromthe patient’s own home, facilitating accessto our ever aging population.Healthcare is changing. Over the next decade, the focus will switchfrom products towards integrated solutions and service offerings.Beyond medications it means combining numerous solutions intoa healthcare provision model that addresses the needs of patientsand healthcare providers alike.HEALTHRAGEOUS, INC.Digital coaching and a wirelessglucose meter transmitting datato clinical monitors.New healthcare business models are focusingtowards innovative integratedsolutions that seek to support patientsin prevention, and through the treatmentand management of their disease.These can include simple solutions thatallow a patient to monitor their conditionfrom home, providing them a moreaccurate view of the effectiveness oftheir actions and motivating them tofollow their treatment plan and activitiesto achieve better results.The emerging alliance between medicineand technology will lead to morepredictive, personalised and effectivemedical care. These measures aim toremove obstacles and encourage patientsand healthcare providers down acommon path where quality of life andhealthcare outcomes are improved.The shift towards integrated healthcaremodels can be seen as an evolution towardshighly effective holistic treatmentsolutions. Boehringer Ingelheimhas a department called Business Model& Health Care Innovation (BM&HCI),in order to further shape these changesand to improve knowledge, competenciesand capabilities in this area.82Boehringer Ingelheim annual report 2012

our businessesperspectives for better healthMAKING SELF-MANAGEMENT OF TYPE 2 DIABETESEASIER AND MORE EFFECTIVEWireless blood glucoseInternet-based clinical monitoringA B Cmeasurement+ digital coachingIntervention on changes inlifestyle behavioursreportingon selftrackingmessages,reminders andalertsSupporting the patientThe department is looking at supportingthe entire patient journey. This includesimaging, diagnostics and predictiveanalytics, that help identifyingpatients early on. It also comprises consumersensors, devices or monitors,codified and standardised protocolbasedpathways, as well as behaviourmodification tools that leverage scienceand economics.BM&HCI has been tasked with exploringopportunities for collaborative innovationthrough pilot programmesand partnerships, which drive superiorhealth benefits for patients, while facilitatingthe delivery of improved care byproviders.BM&HCI works to extensively networkwithin the company to assess potentialneeds and uncover ideas for potentialprojects early on.Simultaneously, via external partnershipswith academia and a variety ofdifferent industry partners, the departmentis building knowledge and relationships,including with partners nottypically associated with the healthcareindustry.In all, we are working to find and evaluatethe best solutions and businessmodels from a variety of sources.Cooperation with Healthrageous, Inc.Boehringer Ingelheim and Healthrageous,Inc., a digital health managementcompany, will evaluate in a pilotstudy a lifestyle behaviour modificationprogramme to improve the health statusof people with type 2 diabetes.Study participants will experience adigital technology intervention combiningdigital coaching and a wireless glucosemeter transmitting data to clinicalmonitors. The internet-based tool willallow an evaluation of the interventionon changes in lifestyle behaviours, glucosecontrol, additional medical parametersand medication adherence.DIGITAL COACHING ANDBIOMETRIC FEEDBACKIn the first phase 200 adults diagnosedwith type 2 diabetes for atleast six months will have accessto Healthrageous’ digital diabetesself-management programme.The web and smartphone deliveredprogramme will include a personalisedaction plan with healthbehaviour improvement goals, biometricfeedback to demonstrategoal achievement and milestones,digital coach interaction, recognitionand incentives for progress,supply and strip refill ordering andmedication reminders.If the results show the expectedbenefits, the programme will beexpanded to encompass up toone thousand patients in severalcountries.Perspectives on innovative business models83

Rapid progress in global healthcare generatesdemand for innovative medicines.MARKET ACCESS FORNEW MEDICINESRapid progress in global healthcare systems today continuouslygenerates demand for urgently needed innovative medicines. However,in many cases, innovations in medicines and technology result inincreased healthcare expenditure, at least in the short term. Healthcarebudgets are under severe pressure and cost-consciousness amonghealthcare providers has increased.BENEFIT FOR PATIENTSAND SOCIETYWe at Boehringer Ingelheim areconvinced that our new andinnovative products offer significantadditional medical benefitto patients and economic benefitto society.The market access environment formedications has changed structurally,driven by the limited affordability ofhealthcare for the public health sectorin growing and aging societies. Theimpact on the pharmaceutical industryis that the regulatory requirements,such as demonstrating efficacy, safetyand quality of products, are no longersufficient when bringing new medicinesto the market. Additionally, medicaland economic benefit have to be demonstratedwhen new medicines arebrought to the market.Innovation – risk-adequate incentivesBoehringer Ingelheim is guided by theaspiration to provide a sustainable contributionto the improvement of thehealth of society with innovative medications.As a research-driven company,we can, however, only continue to investin our own research and developmentof innovative medications, if weare risk-adequate incentivised and rewardedfor our entrepreneurial risk andinnovation. Cost-benefit calculations ofthe public sector for sole cost controlare falling short related to the sustainedimprovement of public health.Our market access organisationsTo find a solution for the divergent goalsof society and Boehringer Ingelheim,we have built up corporate and localmarket access structures and processes,which have helped to achieve and sustainaccess and reimbursement of ourproducts in most markets.However, market access activities forour two new innovative products,pradaxa® and trajenta®, have identi-84Boehringer Ingelheim annual report 2012

our businessesperspectives for better healthREQUIREMENTS FOR PRODUCT APPROVALThe pharmaceutical industry, including BoehringerIngelheim, is facing increasing difficulties to achievemarket access, i.e. reimbursement for the labelledportfolio of new innovative products.budgetimpactTHREE TRADITIONAL REQUIREMENTSProvision of evidence to demonstratesafety, efficacy and quality for purposes ofregistration and reimbursement of newmedications.value and costeffectivenessFOURTH REQUIREMENT:VALUE AND COST-EFFECTIVENESSqualityefficacysafetythree traditional requirementsfourthrequirementfifthrequirementHealthcare providers’ expenses for treatmentsare covered or reimbursed by a payer.This payer must be convinced of theadditional clinical, as well as the economicbenefit of the product to be willing to payfor it.fied a difference in stakeholders’ andcustomers’ value perception of externalmarket access compared with our convictionabout the innovation and medicalneed of the two products.Unlike in previous years, we also noteda mismatch between rather positivehealth technology assessment (HTA)outcomes and the finally implementedreimbursement and pricing decisions –most likely driven by payers’ increasinghealthcare budget constraints. As a result,physicians and patients often hadto wait longer than expected to get accessto pradaxa® or trajenta®.Market access embeddedTherefore, our market access group isan integrated part of committees inR&D, Marketing and Regulatory toalign evaluations and decisions with asufficient focus on market access in thepreparation of research and developmentmilestone decisions.Progressive market access modelsFaced with fast-changing healthcaresystems, we have started to explore anddevelop non-traditional market accessmodels, such as risk-sharing agreementsand outcome/performance-based agreementswith some payers. Tiered pricing,i.e. pricing in accordance with the abilityof societies to generate income percapita, might be a way to bring newmedicines to a wider group of eligiblepatients in emerging markets.Every market is different and we needto clearly understand each payer’sneeds and ability to finance new medicines,whether the payer is a third party(i.e. health insurer) or the actual patient.Budget constraints are expectedto continue in many markets and eachmarket needs a different solution.Demonstrating the overall benefit of a newproduct, i.e. in the form of so-called costbenefitmodels, has to be cleared by theresearch-driven pharmaceutical industry.Payers are assessing the benefits of anynew medicine before granting access tothe respective healthcare systems.FIFTH REQUIREMENT:BUDGET IMPACTAddressing the budget impact is the ultimatechallenge for gaining market accessat national, regional and local levels.Market access for new medicines85

KEY GOALS OF GLOBAL BUSINESS SERVICESimprovingproductivityimproving qualityand complianceadding businessvalueenabling businessgrowthattracting talentedemployeesLeveraging standardisation,automation andeconomies of scale.Leveraging innovativetechnology, transparencyand globallybundled expertise.Businesses and functionsto focus on theircore processes.Greater efficienciesthrough agility andstandards.Attractive work environment,modern ways ofworking, good developmentopportunities.PASSIONATELYENABLING GROWTHGlobal Business Services (GBS) is a programme, a system, anorga nisation. GBS is one of the largest and most significanttransformation initiatives that Boehringer Ingelheim has investedin to date. It embraces services, standards and systems.Scope of GBSThe scope of GBS covers more thanrolling out new software technologiesand business enterprise platforms toautomate commercial transactionalfunctions.GBS especially aims to target bothdirect and indirect resource creationthrough faster delivery of quality informationusing standardised, transparentand compliant processes and harmonisedsystems.The mission of GBS is to deliver optimalinternal global services fromwithin the organisation with the aimof operating more efficiently and effectively.Hence, GBS plays a significantrole in ensuring that the companyremains in a strong commercialposition.GBS has moved rapidly from a traditionalback-office function-basedrole to become a strategic partner tothe organisation.GBS evaluates three key topics to findout whether a service can be subject toa GBS target. If it can be standardised,internationalised or industrialised on alarge scale, it is likely that GBS, togetherwith the respective business andfunction, develops global standards.Interconnected systemsTo run such services, globally harmonisedstandards in processes and contenthave to be in place. Having definedservices, content and processes, a smartglobal architecture of information sys-86Boehringer Ingelheim annual report 2012

our businessesperspectives for better healthG LOBAL BUSINESS SERVICE CENTERGlobally standardised proceduresare executed by a central servicecenter, the Global Business ServicesCenter (GBSC), and createglobal synergies.The implementation of GBS isfocused on accountabilities andservice excellence aiming atincreasing service quality andallowing for continuous improvementof processes.improvement and strategic evolutionpurposes at globally standardisedsites, global governance isimproved and complexities arereduced in all business processareas.Overall, GBS is enabling BoehringerIngelheim to achieve costcontainment and sustain growthand success well into the future.As information is centrally availablefor monitoring, continuoustems is established to enable and empowerGBS. In fact, it is a number ofinterconnected systems that allowsBoehringer Ingelheim to run theseservices and processes, be they commercialor production-re lated.Organisational dimensionAdditionally, GBS also has an organisationaldimension: to govern, develop,deploy and to run services. Togetherwith the partners, particularly in itsfunctions Operations and InformationSystems, Boehringer Ingelheim rapidlydeploys the new set-up to all its subsidiaries.Global business standardsNew global business process standardsare rolled out in partnership with corporatebusinesses and functions and thesubsidiaries to create and refine stateof-the-artbusiness processes that willenable Boehringer Ingelheim to managekey assets with greater ease.invoices to suppliers and receiving paymentsfrom pharmaceutical distributorsand wholesalers.It also covers many front-end processesand interfaces, including customer relationshipmanagement, for the sales andmedical teams across the company.Operations also pursues a compatibleharmonisation approach closely alignedwith the GBS initiatives to streamlineand deploy the very best manufacturingprocesses to manage production logistics,operations planning, and ensuremanufacturing plants are running efficientlyand producing the highest qualitymedicines possible.Importantly, the GBS initiatives allowemployees in hundreds of different jobfunctions globally to focus more ontheir most important core businessfunctions.BUILDING UP GBSGlobal Business Services (GBS)were successfully introduced until2012, initially in some Europeancountries (UK, Ireland, Italy) andin Brazil.With this global proof of concept,we will now migrate additionalunits worldwide to new standardsand platforms. In 2013, furtherintroductions are scheduled inEurope, Asia and the Americas.The GBS initiatives cover commercialbusiness functions, such as payments ofPassionately enabling growth 87

“The perspectives that open upunexpectedly in the canyon, whichis about 1.5 km long, are so varied,because of the different lighting,colours and forms. So every stepturns into an experience, generatingcuriosity, excitement and fascination.”(Antelope Canyon, Arizona,USA)klaus fleischmannproject leaderingelheim, germany36° 51' 27" N, 111° 22' 19" Wantelope canyon, arizona, usa

our businessesperspectives for better health#3.2FUTURE PROSPECTS FOR CONSUMER HEALTH CARE (CHC)STAY HEALTHY TO ENJOYYOUR FREEDOMNowadays, people live longer due to better living conditions andbetter public and private healthcare systems. To contribute toimproving the health of an ageing society, we implemented aninnovation programme and understand better the quality oflife needs of people between 50 and 65 years old, the so-called“young-timers”, and bring new solutions for them.People born in the 1950s and 1960sform a large demographic group togetherwith the baby boomers, and representthe largest demographic group in mostdeveloped countries. They also hold avery large part of many countries’ economicwealth.Health and lifestyle solutionsPeople live longer and want to maintaintheir health and quality of life for aslong as possible. Retirement is probably,together with family and health-relatedtopics, one of the major concerns forthis age group. It can completely changepeople’s habits from one day to another,impacts incomes and can be life-changing.Some people face it with enthusiasmand others with fear.Their biggest needs and demands includehealth and lifestyle services especiallydesigned for them. BoehringerIngelheim is de veloping specific healthand lifestyle solutions and services forpeople aged 50 and over.MobilityPart of our current innovation programmefor “young-timers” is relatedto their mobility.The most common mobility ailmentsare back pain (sciatica or slipped disc),joint ache (arthritis, arthrosis, bursitis,tendinitis or gout), osteoporosis orconditions like varicosis or haemorrhoids.Through our innovation programme,we are working with experts who havepointed out the importance of beingproactive when mobility problems appear.New solutions also need to bemore personalised, more preventive andoffer clear guidance on how to manageproblems.MOBILITY – “YOUNG-TIMERS”Mobility is part of our innovationprogramme for “young-timers”,people between 50 and 65 yearsof age.Stay healthy to enjoy your freedom 89

OUR GLOBAL SWITCH TEAMThe Switch unit is focused on switching medicines withexpired patents to over-the-counter medications. The teamis working on global switch opportunities, thus offeringconsumers new self-care solutions.FROM PRESCRIPTION TOSELF-MEDICATIONA switch is a process whereby a drug, previously available as prescriptionmedicine only, is approved as safe and effective for selfmedicationuse without a doctor’s prescription. Switches increaseaccess to treatment options, reduce overall healthcare costs andcan significantly increase the awareness of the respective healthcondition.ALESION® JAPANA number of targeted campaignsmade alesion® one of the bestOTC launches, surpassing amarket share of 11% during thefirst season after launch.Many consumers want to be responsiblefor their own health and prefer greateraccess to self-medication. In addition,undertreatment of many common medicalconditions is a well-recognisedpublic health problem and easing theaccess to necessary drug therapies providesimproved health outcomes.Thus, governments and regulatory authoritiesshow an increased willingnessto make medications more accessibleand affordable through a switch and toavoid unnecessary doctor’s visits andhealthcare costs. Given the current financialconstraints and burden combinedwith a rapidly ageing population,we see a huge potential to relieve physicians’offices and to unburden thehealthcare systems by releasing medicinesfrom prescription.An expert team for switchesBased on these trends and in alignmentwith its Consumer Health Care (CHC)growth strategy, Boeh ringer Ingelheimset up a dedicated switch unit.The unit is focused on switching medicineswith expired patents of BoehringerIngelheim, thus offering consumersnew self-care solutions.Furthermore, the unit uses the reputationas a leading global over-the-counter(OTC) company to become a partnerof choice. The global strength of CHCmakes it an attractive partner for othercompanies with switch candidates.90 Boehringer Ingelheim annual report 2012

our businessesperspectives for better health21 Consumer campaign for the alesion®switch in Japan2 Health expert campaign of the alesion®switch in Japan1Highlights 2012While switches are complex and timeconsumingendeavours, and manyactivities are going on around the globe,the year 2012 showed some compellingsuccess stories.ALESION® – new OTC treatmentoption for hayfever in JapanAfter the switch of alesion® 10 (epinastine),CHC Japan launched it on to theJapanese OTC rhinitis market. alesion®10 provides effective relief from hayfeversymptoms, such as runny nose, with aconvenient once-a-day dosing. Furthermorealesion® 10 causes less drowsinessthan other products – a key differentiatorin the market.The Japanese team, in cooperation withthe global Switch team, is working onfurther switch opportunities for theJapanese OTC market.expert panel (Expert Advisory Committeefor Prescription-Only Issues) in 2012.One is a new mono substance in the indicationof acute diarrhoea, which willstrengthen the gastro-intestinal franchiseof CHC. The other is a combinationproduct, which will extend the presencein the cough and cold segment to thecold and flu sector – a huge and fastgrowingmarket segment.Both switches were given approval bythe German Upper House (Bundesrat)to change the law and to complete theswitch. Both products will offer considerablegrowth opportunities for theGerman self-medication business. Furthermore,both options will be launchedin additional countries.EVOLUTION INSWITCHESEvolving technology and communicationcapabilities will help tosupport self-diagnosis and extendself-medication to new areas, includingselected chronic conditionsand even symptomless ailments.Consumers will in the near futurecombine internet with their ownrecords and be able to monitorkey metrics like blood pressureand blood sugar.Our switch activities anticipatethe future, when consumers willbe able to take responsibility formaintaining and improving theirown health, measure their progressand partner with their healthcareprofessional.Switch opportunities for GermanyTwo switches were given a positiveswitch recommendation by the GermanFrom prescription to self-medication 91

“For me, the photo shows thatthe indirect view producesmore interesting perspectiveson things and people than asober examination of the facts.It brings details to light thatwe would otherwise never havediscovered.”wilhelm von heykinghead of development coordinationbiberach, germany48° 5' 53" N, 9° 47' 19" Ebiberach, germany

our businessesperspectives for better health#3.3BIOPHARMACEUTICALSBIOPHARMACEUTICALS –MEDICINES FOR THE FUTUREBoehringer Ingelheim was a pioneer in the field of biotechnologyand is now one of the leading companies for the development andmanufacture of biopharmaceuticals. New biological entities (NBEs)and biosimilars are and will continue to be among the main driversof growth in the pharmaceutical industry in the mid to long term.12 3New biologic entitiesOur Biopharmaceuticals business iscommitted to supporting research anddevelopment (R&D) of new biologicalentities.Biopharmaceuticals is an integral partof in-licensing activities and identificationof potential new products. It continuouslyscouts for innovative processand product technologies. These activitiesfoster the development of cuttingedgeNBEs in the respective therapeuticareas.Boehringer Ingelheim markets thefour biopharmaceuticals actilyse®,metalyse®, imukin® and beromun®produced in cell culture or from microbialfermentation.Boehringer Ingelheim BioXcellenceWe aspire to maintain our position asone of the world’s largest contract manufacturersof biopharmaceuticals, providingthe entire production technologychain from DNA to fill and finish. Wehave brought 22 new biopharmaceuticalproducts (or NBEs) together with ourcustomers to the market (i. e. cell-linedevelopment to registered product).The contract manufacturing business ofBoehringer Ingelheim is now representedby its new brand Boehringer IngelheimBioXcellence, which stands forexcellence, quality and reliability in themarket.Our biosimilarsIn addition, we decided to expand ourcurrent Biopharmaceuticals businessfor the development and manufactureof new and innovative biopharmaceuticalsinto developing biosimilars.With our expertise and world-classtechnology, we are well-placed tocreate, develop and manufacture highqualitybiosimilars.OUR BIOPHARMACEUTICALSNETWORK1 fremont, usa2 biberach, germany3 vienna, austriaBiopharmaceuticals – medicines for the future 93

2 Disposable single use bioreactorwith sensors attached that helpcontrol pH and dissolved oxygenduring cell culture.1 2INNOVATION DRIVERSIN BIOPHARMACEUTICALSInnovation in biopharmaceuticals will not only be driven by newproducts, but by availability of new technologies. Boehringer Ingelheimis well-prepared to deliver innovation in biopharmaceuticals byprovision of innovative products and technologies.INNOVATIVE BIOLOGICSPRODUCTSLooking at the early phase productportfolio, antibodies will continue todominate the biologics market. AlsoScaffolds, antibody fragments andmore complex antibody-derived moleculesare also on the increase. We arewell-prepared to develop and manufacturethese types of molecules andhave conducted more than 30 feasibilitystudies in the scaffold area.Global disposable networkPersonalised medicine will be farmore prominent in future, resultingin smaller quantities of material andleading to flexibility of scale becominga necessity. This is one reason whywe are establishing a global disposablenetwork.Experience with disposable systemsOver the last few years, Biopharmaceuticalshas been gaining experience withdisposables and an extensive experiencedataset has been collated to date.Now we have made a commitment toset up production facilities using disposablesystems for biopharmaceuticalsin both facilities in Biberach, Germany,and in Fremont, USA. Here wewill be able to seamlessly transfer processesas we apply the same technologyat all our sites.Disposable systems – high qualityThe quality standards will remain thesame regardless of whether disposableor stainless steel systems are used. Mediaand buffer solutions come intocontact with the product during theprocess, or even become part of theend product. Thus, studies and riskanalyses are carried out regarding theadsorptive and leachable properties ofthe disposable materials used.We have shown for a large number ofprocesses that the yield, along with theproduct quality and purity of the disposableprocess, match that of a conventionalprocess. In future, it is likelythat disposable systems will be state ofthe art, replacing conventional stainlesssteel-based systems for early clinicalproduction.94 Boehringer Ingelheim annual report 2012

our businessesperspectives for better health431, 3 + 4 With its new equipment and laboratories inprocess development, Boehringer Ingelheimprovides an expanded service offering for itscustomers along the whole biopharmaceuticalprocess chain. Process science laboratories inVienna, Austria.New processes and technologiesHigh production costs and technicaldifficulties in large-scale productionled to sophisticated technological developmentsand improvements. Thisfledgling area of biopharmaceuticalswill also in future be shaped by innovativetechnology developments infuture.Since production titers for standardmonoclonal antibodies (mAbs) are goingbeyond 4 g/l, which is pushing chromatographybeyond its physical and economiclimits, we are working on columnfreeprocesses. In addition, the generationof new molecule formats and non-mAbproteins cause problems in capturingwith standard affinity materials.In column-free processes, large amountsof protein are manageable and all kindsof biomolecules are feasible as thisprocess technique is mainly independentof protein design. Automation will alsoplay a significant role in this area.DATA-DRIVEN DRUGDEVELOPMENTThrough our automation in all areas ofchemistry, manufacturing and controls(CMC) development, we are able tobetter understand the processes.High throughput and miniaturisedassay provide the data to drive earlydecisions, which have a significantimpact on cost and timelines. Thisnow allows us to gain a holistic viewof biopharmaceutical processes earlyon. The process knowledge is basedon a much broader data set and allowsearly decisions to be made onthe right molecule format.The realisation of a new purificationplatform process from pre-harvest tobulk is the goal based on approved technologiessuch as aqueous two phase extraction(ATPE) and controlled precipitationand filtration processes.Innovation drivers in biopharmaceuticals95

“The hard-working beessuccessfully transformed thelife of the Lotus. It takestwo to tango.”grace wuinternal communications managertaipei city, taiwan23° 58' 0" N, 120° 58' 0" Etaipei city, taiwan

our businessesperspectives for better health#3.4BIOSIMILARSBIOSIMILARS –PERSPECTIVES FOR PATIENTSThe proportion of the population over 65 years old is growing acrossthe globe. This means that in coming years the demand for high-qualitymedical care will rise, as will treatment costs. At the same time,healthcare systems are subject to more stringent cost controls. Withbiosimilars we can help to meet the challenge.With more than 30 years of experiencein biopharmaceutical research and developmentand with a sophisticatedtechnological infrastructure, we arewell-positioned to enter the biosimilarsmarket.Doing the same in a different wayA biosimilar is a very close but nonidenticalre-creation of an approved biologicalmedicine that has lost patentprotection or exclusivity. Biosimilarsare derived from the same gene sequenceas the original, but the cell lines andprocess steps differ from one manufacturerto another. Unlike generics, a biosimilaris not an exact chemical copy,but a similar-as-possible re-creation ofthe originator product.A patient-orientated pipelineThe biosimilars pipeline at BoehringerIngelheim is aligned to patients’ needsfor various indications in which biopharmaceuticalsplay a role. In particular,our focus is on monoclonal antibodiesfor oncology and immunology.We have three mono clonal antibodiesin clinical development: adalimumab,bevacizumab, and rituximab.OUR BIOSIMILARS PIPELINEWe are currently conducting studiesin adalimumab (pictured above),bevacizumab and rituximab.Bringing better health to more peopleBiosimilars create better perspectivesfor patients, and also for physicians andfor payers in the healthcare sector. Theyoffer the same standard of care as theoriginator products, but with a lighterburden on healthcare budgets.Biosimilars – perspectives for patients 97

“There are many things and experiencesthat can change the perspective of your life.One of these, and the most important forme, has been my son Biel. This picture makesme think about how his perspective of lifecan be, how happy and enthusiastic he iswith his two and a half years. We shouldall try to keep a little bit of this enthusiasmin the course and in the different aspectsof our lives …”roser anglarill lozanomarketing assistantspain41° 28' 29" N, 2° 5' 12" Esant cugat, spain

our businessesperspectives for better health#3.5PERSPECTIVES IN ANIMAL HEALTHCOMPREHENSIVE ANIMALHEALTH MANAGEMENTHealth and nutrition are very important topics for the well-informedconsumer. Boehringer Ingelheim cares about the modern consumer’srequirements. High-quality protein, less residues and adequate animalhousing are relevant themes which are relevant.Sustainable healthcare for pigsAnimal Health strives to foster thehealth and wellbeing of mankindby contributing to an adequatesupply of safe, nutritious food andby promoting the emotional andphysical benefits arising from thehuman-animal bond.Sustainability and holistic health managementfor farm animals is one of theperspectives of our Animal Health business.“Prevention is better than cure” isthe central concept in the field of swinevaccines. Systematic use of vaccines canreduce the use of antibiotics.Comprehensive health management isthus the key. A combination of severalmeasures makes it possible for thefarmer to keep animals in good condition.Close interaction between theveterinarian and the farmer is thefoundation of integrated farm animalhealth management. Regular visitsand close monitoring of data on housing,nutrition and the hygienic situationon the farm form the basis, helpobtain an overview and offer the opportunityto intervene in time and beforeillness occurs.Highly effective vaccinesWith a wide range of highly effectivevaccines, our Animal Health businessaddresses a number of threatening respiratory,reproductive and enteric diseaseswhich can occur on a farm at anytime. These diseases can be life-threateningto pigs and result in economicloss for farmers.A leading company in chronic careIn a changing demographic and socialenvironment, pets and horses are increasinglyassuming the role of companionsand family members. Consequently,they are more frequently giventhe best healthcare and treatment, resultingin a longer and happier life. Wehave set standards for innovation inmany areas, for instance in heart failureand arthritis in dogs.Intensive research activities and stateof-the-arttechnologies form the backboneof the Animal Health business.In our global R&D centres, researchersVACCINE FLASKINGELVAC MYCOFLEX®The 22nd Congress of the InternationalPig Veterinary Society (IPVS),held in South Korea, attracted morethan 3,000 participants from 60countries. Boehringer Ingelheimorganised a symposium focusingon swine respiratory disease.A major success was the launchof our latest innovation, theingelvac mycoflex® vaccine flaskHeadspace bottle, which has beendeveloped to simplify the mixingof ingelvac circoflex® andingelvac mycoflex®. Customershad the opportunity to see the newflask at our booth and experiencelive vaccine mixing themselves.Comprehensive animal health management 99

OUR GLOBAL SCIENTIFIC NET WORKIN ANIMAL HEALTH1 fort dodge, usa2 ames, usa3 st. joseph, usa4 guadalajara, mexico5 ingelheim, germany6 hannover, germany7 tokyo, japan8 shanghai, china42316587INNOVATIVE VACCINES –MILESTONES IN SWINE HEALTHThis is a selection of the swinevaccines with which we inspirednew perspectives in animal healthmanagement.Healthy animals are the preconditionfor healthy meat. Any contributionto the well-being of farm animals istherefore also an important contributionto consumer protection.are working on innovative solutionsto best serve our customers. Unmetmedical needs are challenges for theresearchers and their ambition is tofind innovative and effective solutions.The numbers of newly emerging diseasesare expected to rise in an increasinglyglobalised economy and due toclimate change. Timely provision ofvaccines in response to these diseaseswill be a key factor in keeping animals,and thereby humans, healthy.Global manufacturing – focuson reliable supplyClose cooperation between our Operationsand Research and Development iscrucial in the supply chain. It usuallytakes 180 days to produce a vaccineproduct. As diseases and epidemics occurin waves, it is important to maintaindelivery at all times and have sufficientcapacity to react quickly. Our goal is areliable supply situation to be achievedin several stages.This year, we enlarged capacities in ourAnimal Health business. Acquisition of aproduction facility for vaccines in Weesp,the Netherlands, provides higher flexibilityfor manufacturing in Europe. Wealso invested at our other internationalmanufacturing sites, in state-of-the-arttechnology contributing to the needs ofour global, successful business.100 Boehringer Ingelheim annual report 2012

our businessesperspectives for better healthANIMAL HEALTH GLOBAL R&D –SEARCH FOR LEADING SOLUTIONSIn our global R&D centres, colleagues areworking on innovative solutions to serve ourcustomers best.FRONT LINE RESEARCHTeams of scientists from all over the world conduct advancedlevel research at eight major R&D centres to preserve and improvethe health of animals.High investment rate in R&DApproximately 450 scientists andsupport staff in R&D worked in theAnimal Health area at BoehringerIngelheim. This business continuallyinvests 11% of its revenues in R&D,which is one of the highest rates inthe industry. In 2012, this amountedto EUR 115 million.Vaccines and chronic carethe focus of R&DR&D at Animal Health focuses on twomain areas: improved vaccines for theprevention of infectious diseases in allspecies and development of treatmentsfor chronic diseases in companion animals.While the former aims at preventingdisease and suffering in all animals,the latter has the goal of improving thequality of life and enhancing the humananimalbond. In 2012, two major milestoneswere reached in treating epilepsyand chronic renal diseases in companionanimals.Epilepsy in dogsEpilepsy is a common disease in dogsand occurs frequently in the first yearof life. The disease leads to the animalhaving seizures (whole body cramps)and is highly stressful for the animaland its owner. Previously, only fewtreatment options were available andfor many decades veterinarians haveused phenobarbital and potassiumbromide to reduce the number of seizures.EUR 115mBoehringer Ingelheim AnimalHealth continually invests 11%of its revenues in R&D, which isone of the highest rates in the industry.In 2012, this amountedto EUR 115 million.Front line research 101

2 31 Scientists in Hannover working in the laboratoriesof the new Boehringer Ingelheim Veterinary R&Dcentre.2 Epilepsy is a common disease in dogs and occursfrequently in the first year of life.3 Chronic kidney disease is a frequent diagnosisin aging cats.1INNOVATION – FROM THE IDEATO THE FINAL PRODUCTAt all R&D centres, we conductvaccine research and development,from the idea to the finalproduct and marketing authorisation,using the latest technology.Many of our R&D centres are nearacademic research institutionsand close cooperation betweenacademic or biotech basic research,on the one hand, and applieddrug development at AnimalHealth, on the other, has provento be the most efficient way ofbringing innovation to the veterinarianand the animal owner.While these treatments lead to the desiredreduction in events, the drugs areassociated with a number of unwantedeffects, including tiredness and negativeeffects on the liver. Animal Health hasrecently obtained approval for a noveltreatment (imepitoin), which reducesthe number of events, while having asignificantly improved safety profile.This active ingredient binds to a differentreceptor than the currently approvedtreatments and thus has a differentmode of action.Kidney disease in catsChronic kidney disease in cats is a frequentdiagnosis in ageing cats. In manycases, this disease is associated withfatigue and a reduced quality of life inthe affected animals. A hallmark ofthis disease is that the kidneys becomeleaky and excrete proteins that arenormally not found in the urine.In addition, this disease is often associatedwith a high blood pressure inthese animals, which contributes tothe progression of the disease. In manycases, animals die from the long-termeffects of this disease. We have recentlyobtained the approval for a noveltreatment (telmisartan) to reduce theprotein leakage in the kidneys.This drug belongs to a class that is newto veterinary medicine, but has beenone of the first line options in humansfor treating high blood pressure andsome forms of kidney disease. Theseangiotensin receptor antagonists preventthe detrimental effect of angiotensinII on cells by selectively blockingits binding to one of the receptors.Preventing disease with vaccinesVaccination against infectious diseasesis one of the most effective measures tomaintain the health of livestock andcompanion animals. Boehringer Ingelheimhas a global network of vaccineR&D and manufacturing sites to serveglobal as well as regional needs.This includes US sites in the Midwest(Missouri and Iowa). In Hannover, Ger-102 Boehringer Ingelheim annual report 2012

our businessesperspectives for better health4 Scientific work in the lab requirespatience and care.5 Modern technology in the labs isessential to perform high levelscience.54many, Boehringer Ingelheim investedmore than EUR 40 million in a new researchand development for vaccines.Supply of safe and healthy food is alsogaining in importance in Asia, especiallyin China.We have therefore opened the AsianVeterinary R&D centre in Shanghai,China, where by the end of 2012 morethan 30 scientists were working on improvedvaccines for China and SoutheastAsia. Finally, R&D centres in Guadalajara,Mexico, and Tokyo, Japan, alsocontribute to our global R&D activitiesand ensure access to the important marketsof Latin America and Japan.ANIMAL HEALTH CENTRES OF EXCELLENCEWhile Boehringer IngelheimAnimal Health R&D centresin all regions conduct vaccineresearch as well asclinical and product development,a network of centresof excellence ensuresaccessibility to specialtechnology for the entireR&D organisation.These centres include genomics(Ames), immunology(Hannover), tolerabilityacceptance studies (StJoseph) and pharmaceuticalproduct development(Ingelheim).Front line research103

“Living and working on a differentcontinent is certainly a challenge,but it offers many opportunities atthe same time.”elisabeth kamphuishead of r&dguadalajara, mexico“I enjoy working for a leadingcompany in the animal healthbusiness and in an excellentglobal team.”jiang haifengbusiness developmentmanager, shanghai, chinaGLOBAL PERSPECTIVES INANIMAL HEALTHHaving the right people in the right place and position is a keysuccess factor for a leading company. Boehringer Ingelheim AnimalHealth offers chances for those looking for exciting professionalcareers in a successfully growing international business. Workingwith people from many nations is great fun and offers good potentialfor learning.FlexibilityAn international career is one of thedesired goals university graduatesstrive for. Within Animal Health, colleaguesobtain the chance to gain experienceworking in projects in anothercountry. Several options offershorter or longer work experience inone of the countries in which we havesites.Edgar Sandoval from Mexico, gaininginternational experience in St Joseph,Missouri, USA, says: “It is rewardingfor me to contribute to the success ofour Animal Health business and bepart of a great team.”ResponsibilityFrom the beginning, colleagues aretrained to take over responsibility fortheir projects and, at times, a team.Elisabeth Kamphuis, Head of R&Din Guadalajara, explains: “Since June2012, I have been working in Guadalajara,Mexico. In my new position, I canmove things forward for my team aswell as for the whole operating unit.I can bring in my professional experienceand knowledge of the field. It isvery exciting and pleasant to implementchanges and also to see thembear fruits of it.”AspirationOf course, we need to adapt to changingworking environments and marketsituations, but we offer interesting opportunitiesto those who are interested.“I worked for other international organisationsbefore,” says Jiang Haifeng,Business Development Manager atBoehringer Ingelheim China. “My superiorworks at Corporate Headquartersin Ingelheim, Germany, and I ambased in Shanghai, China. My projects104 Boehringer Ingelheim annual report 2012

our businessesperspectives for better health“I especially value the opportunityto work on real products that willbring benefit to our customers.”yali zhangbioprocess developmentmanager, shanghai, china“My incorporation to the USoperations team has allowed meto grow professionally by beingpart of major projects, like theFort Dodge technology transfer.”edgar sandovalgroup leaderst joseph, usaare progressing very well though, as wehave frequent review video meetingson my work progress, in addition to occasionalmeetings in person. Excellentsupervising and coaching is critical forme to be able to contribute to the successof our business and to achieve myprofessional goals.”NetworkingInternal development programmes offerample opportunities for ambitiouscolleagues to get to know the companywell and develop their talent and personality.Short- or mid-term exchangeprogrammes are a fruitful opportunityto work in different teams and cultures,which is perceived as highly rewarding.Future leaders need to know as much aspossible about the company before theytake up a position where they assumeresponsibility for important projectsand people alike.The real experienceFrom the beginning, young employeeswork in projects which are part of theregular business plan. They are involvedin the business cycle, accordingto the position they obtain. Yali Zhang,Bioprocess Development Manager inShanghai, states: “Here at the Asian VeterinaryResearch and DevelopmentCentre, we are researching and developingvaccine solutions for the Asiancountries. I especially value the opportunityto work on real products that willbring benefit to our customers.”3,100EMPLOYEES WORLDWIDEworked in Boehringer Ingelheim’sAnimal Health business in 2012.Global perspectives in Animal Health 105

1 Phoenix, the first captive-bredOriental White Back Vulture.2 Jürgen Dämmgen and the teamvisiting an Indian village.12A FUTURE FORVULTURES IN INDIAMillions of vultures used to be part of the fabric of India, just likerickshaws, fakirs and the Taj Mahal. In the late 1990s, ornithologistsstarted to discover that vultures were dying with no obvious cause andraised the first alarm bells. Jürgen Dämmgen is Boehringer IngelheimAnimal Health’s ambassador for coordinating the company’s support.CHEMICAL STRUCTUREOF MELOXICAMMeloxicam, the active ingredientof metacam © , is a nonsteroidalanti-inflammatory drug (NSAID).Its chemical structure and biologicalcharacteristics are differentfrom diclofenac.What consequence did the dyingvultures have for India?jürgen dämmgen: For religiousreasons, cows are sacred creatures inIndia. That is the reason why cattle havingdied in old age sanctuaries (panjarapoles)are disposed of carcass dumps,where they used to be eaten by carioneatingvultures. Meanwhile, this role ofvultures has been partly taken over by arising number of feral dogs, increasingthe risk for humans of being attackedand infected with rabies. Since 2007,Boehringer Ingelheim Animal Healthhas been supporting an initiative that istrying to help improve the situation.Has the root cause for thiscatastrophy been discovered?jürgen dämmgen: After a frustratinginitial search for infectious agents,a groundbreaking discovery was madeby detecting residues of diclofenac, thewell-known nonsteroidal anti-inflammatorydrug (NSAID), in cattle carcasses.This drug turned out to be extremelytoxic for vultures.106 Boehringer Ingelheim annual report 2012

our businessesperspectives for better healthVULTURE SAFE ZONES1 corbett2 dudhwa3 nepal4 jharkhand5 assam6 madhya prades7 maharashtra8 gujarat871623453 43 Ornithologist Richard Cuthbert collecting vulturenestlings in India.4 Schoolchildren in the countryside learn more aboutthe role of vultures in Indian culture and how to protectthem by means of entertaining puppet shows.Many children had never been in contact with vulturesbefore. Moreover, children could take homethe message and share this with their parents.Several vulture safe zones are being established inIndia and Nepal.Which measures have been taken?jürgen dämmgen: Quickly, thisobservation resulted in a ban of the useof diclofenac in veterinary medicine inthe Indian subcontinent. metacam®(meloxicam) was iden tified as a replacementfor di clofenac. Boehringer Ingelheimhelped the situation by droppingits patent rights for injectable metacam®(meloxicam) in India.In addition, we started an informationand awareness campaign together withthe British Royal Society for the Protectionof Birds and the Bombay NaturalHistory Society, visiting pharmaceuticalproduction sites in India. Today, meloxicamis the leading anti-inflammatorydrug for cattle in India.What is the long-term perspectiveof the engagement?jürgen dämmgen: Animal Healthhas committed itself to helping by providingboth financial and technicalsupport. Currently, it is sponsoring acaptive breeding programme to reestablisha viable population of vultures inthe future as well as creating vulturesafe zones, allowing these animals tolive without the risk of being poisonedby diclofenac.PROJECT PARTNERS:CAPTIVE BREEDING STATIONEvery day, the scientists are excitedabout what is happening withthe baby vultures being raised inPinjore, one of four captive breedingcentres in India. Techniquesand methods for breeding had tobe established from scratch.boehringer ingelheimanimal healthrspb royal society forthe protection of birdsA future for vultures in India 107

55° 21' 0" N, 131° 40' 24" Wketchikan, alaska

production networkperspectives for quality in operationsread more aboutthe photographers’ perspective

scott zhangstrategic effectiveness analystburlington, canada55° 21' 0" N, 131° 40' 24" Wketchikan, alaska

perspectives for quality in operations

PERSPECTIVES FORQUALITY IN OPERATIONSOperations at Boehringer Ingelheim ensure that patients can relyon receiving high quality medicines.From simple precursors and intermediates handling throughmanufacturing the active pharmaceutical ingredient and producingand delivering the final drug product, it is the responsibility ofoperations to ensure a smooth process.INVESTMENT IN GERMANY[ respimat® production ]SECURE SUPPLY CHAINS[ third-party management ]163m3PM[ eur ]We invest EUR 163m to increase anddouble capacity of the respimat® to44 million packaging units by 2015.The Third Party Management (3PM) networkcurrently includes more than a hundredcontract manufacturing organisations ondifferent continents. It is essential foranalysing and securing Boehringer Ingelheim’ssupply chains.110 Boehringer Ingelheim annual report 2012

production networkperspectives for quality in operationscontents112 MANAGING QUALITY114 SECURE SUPPLY CHAINS GUARANTEEDINVESTMENT IN THE USA[ high containment operations ]SECURE SUPPLY CHAINS[ supply chain integrity ]50mSCI[ usd ]In Columbus USD 50m were investedin a state-of-the-art facility for thedevelopment and manufacturing ofoncology and other high-potencyproducts.To ensure secure supply of safemedicines we have integrated thesupply chain integrity (SCI) initiativeinto our supply chain strategy.Perspectives for quality in operations111

With the quality risk management system, certainprocesses, such as production or packaging processes(here: technical testing of empty pradaxa® capsulesusing an optical length gauge), are evaluated, therebyensuring their robustness and quality.MANAGING QUALITYAs Operations at Boehringer Ingelheim has to ensure every daythat patients can count on receiving high quality medicine.In 2012, the focus was on risk and compliance management.PERFECTION AIM FOR ALLPRODUCTSThe Operations network is responsiblefor global supply ofBoehringer Ingelheim products.This requires knowledge of manufacturingflexibility and the localrequirements of each region. Inits “Launch Excellence initiative”,Boehringer Ingelheim is seekingcontinuous expansion and implementationof robust manufacturingprocesses with special focuson the quality engineered into theproducts and processes.The highest standards demanded by themedicine authorities worldwide formthe essential working basis in the research,development and manu factureof medicines. In 2012, we implementeda series of quality initiatives on differenttopics. In the area of risk management,we continually improve our processesand reduce risk accompanying thebusiness. For this reason, a quality riskmanagement system was developed thatcan be deployed at Operations sites.Process evaluationWith the quality risk management system,certain processes, such as productionor packaging processes, are evaluated,thereby ensuring their robustnessand quality. Furthermore, each site issubjected to risk analysis.The project initiative in 2012 evaluatedwhole business processes in departments,cross-functionally between departments,or for the overall productionsite. Managing and evaluating risk onthis business process level means tomitigate and control identified risks.Together with managerial review, thisensures that a high quality level can besupported and guaranteed long-term.This combination of several managementelements then becomes a qualitysystem.Focus on compliance managementAs we are committed to ensuring patientand product protection, we integratebrand protection and other servicesfor our patients into our businessmodel.Looking at the end-to-end supply chain,from the starting materials to the finalmedicinal product in the hands of thepatient, compliance management playsa pivotal role and is receiving increasinglymore focus. Consequently, as aglobal cooperation we focus on compli-112 Boehringer Ingelheim annual report 2012

production networkperspectives for quality in operations211 The site at Columbus, Ohio (USA), was expanded in 2012 andmoney was invested in its high-containment operations to includea new, state-of-the-art facility for the development andmanufacture of oncology and other high-potency products.2 Increased patient needs are raising demand for the respimat®Soft Mist Inhaler.ance along the entire chain from developmentand sourcing to manufacturingand distribution of our medications.As compliance hurdles worldwide continueto evolve, all products have topass not only all levels of our existingquality standards, but also anticipatedfuture requirements. Our goal is tocontinuously analyse and improveour end-to-end processes. Any topicaffecting or compromising our qualityor reliability along the medicinalproduct chain will be subject to receiverigorous scrutiny.INVESTING IN INNOVATIONNew market launches in our respiratoryportfolio and increased patientneeds are raising demand forthe respimat® Soft Mist Inhaler.We will therefore invest EUR 163mto increase and double capacityto 44m packing units by 2015.The inhaler system is manufacturedat Boehringer IngelheimmicroParts GmbH in Dortmund,Germany, and the cartridges withthe active ingredient at the Ingelheimsite. Production planningin Dortmund was adapted to therequired capacity and additionalresources created in 2012. Furthermore,new employees werehired and trained.The site at Columbus, Ohio (USA),was also expanded in 2012 andUSD 50m was invested in its highcontainmentoperations (HCO) toinclude a state-of-the-art facilityfor the development and manufactureof oncology and otherhigh-potency products.The new capacity includes productand analytical development areas,quality control laboratories, activepharmaceutical ingredient filling,manufacturing and packagingunits and a finished goods warehouse.A unidirectional work flowand state-of-the-art containmentavoidance technology means reducedpossibility for cross-contamination.In addition, the manufacturingsuites are designed forflexibility and quick changeovers.In Columbus, Boehringer Ingelheimmanufactures a broad rangeof products. Through investment,global capacity for handling andmanufacturing potent compoundsis increasing, thereby making theColumbus site into a HCO centerof excellence for the global BoehringerIngelheim network.Thanks to the new HCO facilityand the cutting-edge technologiesemployed, we will also be in a positionin the future to continuallybroaden its product portfolio inorder to offer even more highgradeand affordable medicines.Small and large-scale manufacturingcapacitities support bothclinical provision and commercialproduction, and will enable us totake timely advantage of futuremarket opportunities.Managing quality 113

In order to ensure patient safety, it is crucial thatBoehringer Ingelheim knows and controls allproducts that pass through its supply chains.SECURE SUPPLY CHAINSGUARANTEEDOne of the greatest challenges for the healthcare system is ensuringthe supply of secure or counterfeit-proof medicines. For this reason,Boehringer Ingelheim has integrated the initiative Supply ChainIntegrity (SCI) as an important cornerstone in its operational supplychain strategy.MINIMISING RISKTransparent, end-to-end supplychains – from feedstock to medicinesupply to patients – providea better understanding of therisks, as well as their minimisation,and enable rapid, determinedintervention. Current industrystandards for inspectingproduct authenticity are based onmass serialisation combined withoriginal seal technology.Third Party Management GroupTo be successful as a company, all participantsin the supply chain have towork together – from sourcing to sales.Boehringer Ingelheim takes extensiveprecautions to analyse and secure itssupply chain, irrespective of whether itconcerns contract manufacturers, externallyor internally produced products(see box, right).A good example is Boehringer Ingelheim’sThird Party Management Group(3PM). This monitors a network ofcontract manufacturing organisations(CMOs) and for patients worldwide ensuresa reliable and competitive supplyof prescription medicines and over-thecountermedications for patients worldwide.The 3PM network currently includesmore than one hundred CMOson different continents.Continuous development of the 3PMnetwork supports operational strategiesat many levels. It eliminates unrewardedcomplexity, optimises the risk profileand improves the overall competitivenessand robustness of the supplychain. It develops tailor-made solutionsfor production and supply activities forovercoming barriers to market accessand identifies new geopolitical developmentsand takes them into consideration.It seeks flexible openings for newbusiness opportunities, either withinthe existing 3PM network or by deliberatelyincluding new CMOs.The regional operational 3PM unitsensure that Boehringer Ingelheimstandards for supply chain integrity areimplemented for every CMO in the network.This is achieved by means of a114 Boehringer Ingelheim annual report 2012

production networkperspectives for quality in operationsVALUE AND DISTRIBUTION CHAIN[ chemical synthesis ] [ pharmaceutical production ] [ distribution ]startingmaterialfinalapitablet/capsulepackagingtransportationdistributionmarket place/customerquality assurance agreement in whichwe stipulate our expectations regardingthe supply chain transparency of CMOs,supplier management standards andmeasures to safeguard against counterfeiting.CMO approval processAn additional Boehringer Ingelheimmonitoring function for securing continuousregulatory, legal and financialcompliance for the 3PM network is theCMO approval process. The process isused for every CMO that is to join andincludes, for example, qualification auditson site and thorough and detailedassessment of the supply chain.An example of a special SCI initiativethat has already been implemented atone of our most important CMOs isbased on the serialising and aggregationrequirements recently issued bythe Chinese authorities. A tailor-madeIT solution, as well as alterations to theCMO’s packaging system, delivers anunambiguous identification numberfor every packaging unit that is suppliedto the Chinese market and enablesinspection for counterfeiting.External partners, such as customs orother authorities, can also take part inthe extensive investigations of divergencesthat lead to impairment of supplychain integrity. This allows improvementat the weak points in theprocess chain and criminal offences canbe selectively pursued. Only throughtransparency in communication andthe exchange of best practices with internaland external stakeholders is itpossible to create an environment for amore secure supply of medicines.SAFE MEDICINES IN FOCUSAuthorities worldwide regularlyissue updates to their regulations.Currently, the secure supply ofmedicines is centre stage. Frompharmaceutical manufacturers,the authorities demand that theyknow and control the productsthat pass through their supplychains in order to ensure patientsafety.Boehringer Ingelheim is also improvingthe integrity of its supplychain. The system embraces allprocesses that are required for ensuringsupply chain integrity, suchas global supplier management,relevant internal and external productionprocesses, global salesmanagement, protection againstcounterfeiting, serialisation andsupply chain risk managementand transparency.Secure supply chains guaranteed 115

37° 34' 48" N, 14° 16' 34" Esicily, italy

esearch our markets& developmentperspectives for medical established innovation marketsread more aboutthe photographers’ perspective

37° 34' 48" N, 14° 16' 34" Esicily, italydr hansjörg hagelshead of phyto centeringelheim, germany

esearch & developmentperspectives for medical established innovation markets

PERSPECTIVES FORESTABLISHED MARKETSIn contrast to emerging markets, mature markets are showingmodest economic growth or stagnation. Their industry has toa great extent matured.Healthcare systems are also undergoing change, primarily dueto aging populations that are increasingly dependent on innovativemedicines. At the same time, cost savings must be made.Increasing pressure on prices and market access difficultiesfor medicines present challenges for the research-drivenpharmaceutical companies in particular.BOEHRINGER INGELHEIM IN GERMANY[ 2012 ]BOEHRINGER INGELHEIM IN GREECE[ 2012 ]13,103 45Boehringer Ingelheim has 13,103employees (mean headcount 2012)in Germany.Boehringer Ingelheim’s Greekpro duction site produces forexport to over 45 countries.118 Boehringer Ingelheim annual report 2012

our marketsperspectives for established marketscontents120 EUROPE – MARKETS IN TRANSITION124 USA – FUNDAMENTAL REFORMS126 JAPAN – HEALTHCARE FINANCING UNCLEARBOEHRINGER INGELHEIM IN THE USA[ 2012 ]BOEHRINGER INGELHEIM IN JAPAN[ 2012 ]10,855 2.11bn[ eur ]In the USA Boehringer Ingelheimhas 10,855 employees(mean headcount 2012).Boehringer Ingelheim has had sales inJapan of EUR 2,11 bn.Perspectives for established markets119

Spain is one of the countries struck by the debt crisis.Not only are all administration levels in debt – communities,regional authorities, central government – butalso the bulk of private households. Public sector costcuts have also had an impact on healthcare spending.EUROPE – MARKETS INTRANSITIONEurope is a region of diverse significance for Boehringer Ingelheim,with the corporate headquarters in Germany and important research,development and manufacturing centres in the region. In addition,Europe makes a significant contribution to company turnover inPrescription Medicines.But markets are currently changing.Due to the economic and financial crisis,the states of Europe are under enormouspressure to reform. In order to reducenew indebtedness, or bring downaccumulated debt, countries are alsohaving to lower their expenditure. Thispressure to consolidate, which is burdeningmany European countries, leadsto savings in public sector budgets, alsoincluding spending on healthcare. Thecosts are rising steadily, not least due todemographic change. The saving measureshave an immediate impact onthe market situation for medicines thatqualify for reimbursement.The effects are varied:• Market access for new medicines hasbecome discernibly more difficult.New medicines are frequently takenup by European states only afterlong delays, even though they candemonstrate distinct clinical advantagesand cost-effectiveness.• In the course of cost reduction measures,prices for prescription medicinesqualifying for reimbursementare lowered in many countries. Theseprice cuts are, as a rule, unilateralpolitical decisions in which a companyhas no influence.• Many countries determine their pricesby means of a regular comparisonwith prices in other countries (internationalreference price). In combinationwith the aforementionedprice cuts, this reference price systemleads to a downward spiral effectfor innovative medicine pricesthrough extra ordinary cost-containingmeasures.120 Boehringer Ingelheim annual report 2012

our marketsperspectives for established marketsBOEHRINGER INGELHEIM IN GERMANYBoehringer Ingelheim has13,103 employees (meanheadcount 2012) in Germany.In 2012, it achieved a turnoverof EUR 1.03bn.The assessment and price formationintroduced within theframework of the German lawon the reorganisation of thepharmaceutical market(Arzneimittelmarktneuordnungsgesetz– AMNOG)presents new challenges forthe pharmaceutical industryand Boehringer Ingelheim inGermany. Germany is, nevertheless,Boehringer Ingelheim’smost important researchand production location: 46%of its worldwide investmentand 60% of its global researchexpenditure benefits Germansites – most recently, the expansionof respimat® productionin Dortmund.These figures document thecompany’s commitment tothis location, despite the difficulthealthcare policy conditions.In September 2012, theBoehringer Ingelheim VeterinaryResearch Center (BIVRC)was inaugurated in Hannover,making it the company’s fourthGerman site.dortmundingelheimhannoverbiberachNumerous challengesBoehringer Ingelheim faces numerouschallenges due to this situation. On theone hand, it still wishes to offer productsalready introduced in the respectivemarkets, despite this difficult environment.On the other hand, launchesof new Boehringer Ingelheim productsare of the greatest importance.The divide must be bridged betweenconstructively pursuing savings measuresin crisis-hit countries and ensuringsupply for patients in affected countries.Frequently, patients receive prescriptionsfor innovative medicines becausethere is no therapeutic alternative. Forthis reason, the pharmaceutical industryhas where necessary accepted pricesthat are barely economically reasonable.The effects of the crisis are particularlypronounced in Greece. Beyond what isa special situation in the country, allother European markets are also undergoingtransition. Several countries areTHE SITUATION IN GERMANYThe significance of BoehringerIngelheim for Germany as alocation is made clear in anew study (WifOR) on thepharmaceutical industry asan economic factor. In Germany,Boehringer Ingelheimgenerates more than 11% ofthe total pharmaceutical valueadded (status 2010) andemploys almost 10% of thepharmaceutical industry’sworkforce in Germany. Over35,000 jobs are either directlyor indirectly secured by companyactivities.Our total tax and social insurancecontributions amountto almost EUR 1.2 billion – asignificant contribution tofinancing public sector budgets.Nearly two thirds of allbusiness turnover is generatedfrom a high and steadilygrowing export quota that isabove the average for thewhole economy.Furthermore, BoehringerIngelheim, with its high, aboveaveragelevel of investment,supports Germany overall as abusiness location and supportsit as a location for cutting-edgetechnology with wellabove-average investment inresearch and development.Healthcare is already todaythe largest business sector inthe German economy today,with a rising growth trend. Itsshare of the total economy is11%. Every seventh employedperson works in healthcare:8.5 million jobs are attributabledirectly or indirectly tohealthcare.Europe – markets in transition121

21 View of Athens.2 Production site in Koropi,Greece.1increasing regionalisation. For examplein Italy, and recently also in Spain,where the national, regional and evenlocal authorities are now also decidingto release new medicines for use in particularregions or hospitals.This can take place via lists of authorisedmedicines (i.e. all medicines thatdoctors may prescribe placed on a list)or through medical guidelines whichdictate when a drug should be used.More and more countries, for exampleGermany and Portugal, are turning tothe method of setting medicine budgetsfor physicians which, if exceeded,can have negative economic consequencesfor the physicians.Ways to solutionsGovernments and the pharmaceuticalindustry are currently going through aphase in which both sides are learningto understand the other side in a changingenvironment and are beginning toaccommodate one another. In severalcountries, for example at a national levelin Greece and Portugal, or at a regionallevel in Italy and Spain, work is alreadybeing undertaken to find ways that allowboth sides to achieve their goals.Such solutions can differ totally.Agreements between the respectivepayers in healthcare systems and pharmaceuticalcompanies are playing agrowing role.For the research-driven pharmaceuticalindustry in Europe, this trend meansthat it is becoming increasingly difficultfor an innovative substance to reach patientsafter registration, and that thisprocess takes longer and longer.Agreements on additional services,such as promoting preventativemeasures or supporting patient programmes,or even public-private jointventures in patient care, make a whollynew form of cooperation possible.122 Boehringer Ingelheim annual report 2012

our marketsperspectives for established marketsBOEHRINGER INGELHEIM IN GREECEIn spite of the financial crisis andthe consequent difficult situationon the pharmaceutical market,Boehringer Ingelheim remainscom mitted to its Greek productionsite.Boehringer Ingelheim Ellas has342 employees (mean headcount2012) and sales of EUR 100 million.It is currently the only internationalpharmaceutical companywith a manufacturing facility inGreece, a fact which reinforcesthe role of the local subsidiary inGreek industry. The company’splant produces pharmaceuticalsfor the domestic market, butmainly produces for export to over45 countries in Eastern Europe,the Balkans, Asia, North Africaand the Middle East. Income fromexports amounted to EUR 156million in 2012, accounting for1% of the Greek gross domesticproduct.Investments of EUR 10 million in2012 now make it possible thatalso trajenta® can be produced inGreece and exported from there.Boehringer Ingelheim’s share ofthe Greek exports is thereforeanticipated to continue to rise.Boehringer Ingelheim Ellassucceeded in raising its positionranking in the domestic pharmaceuticalmarket from the 13thwith a market share of 2.6%in 2011 to the 9th position witha market share of 3.2% in 2012,despite constant healthcarereforms and medicine price reductionsresulting from the government’saim to contain pharmaceuticalexpenditure.ellinikokoropiThe pharmaceutical industry commandsmany competencies, which gobeyond researching and developingnew medicines. Competencies, for example,in the field of data analysis,further education in medicine, or logistics,can be used to modernise andimprove patient care in the countriesof Europe through a cooperative approachbetween healthcare systemsand pharmaceutical companies to thebenefit of patients.THE SITUATION IN GREECEThe crisis in Greece has made itnecessary for the Greek state tomake savings in all areas. And thememorandum with the “Troika”(the European Commission, theInternational Monetary Fund andthe European Central Bank) commitsthe Greek government tolowering public sector medicineexpenditure. That is forcing massivestructural adjustments preciselyat a time of economic recession.The measures arisingfrom the pressure to adjust, suchas price cuts for numerous medicines,a formulary that limits thenumber of medicines reimbursedby social insurance and a highergenerics share of the pharmaceuticalmarket, are only some of themeasures having an enormousimpact on the Greek pharmaceuticalmarket. In addition, pharmaceuticalcompanies are obliged togive clawbacks and rebates, i. e.they must return part of theirsales income to the government,if Greek state expenditure onmedicines exceeds the budgetforeseen for it.These rigid measures and badpayments practice in the Greekhealthcare system – the debts tothe pharmaceutical industry ofthe EOPYY, the Greek state healthservice, together with those of thepublic sector hospitals, amount tomore than EUR 2 billion – as wellas the uncertainty as to the extentto which Greece will be in a financialposition to include innovativenew medicines in reimbursement,create an extremely volatile anddifficult market environment.Europe – markets in transition 123

1 View of San Francisco, the leading financial and culturalcentre of Northern California.2 The increasing diversity in the US population (age,ethnicity, technology access/adoption, socioeconomicstrata) requires targeted solutions and approachesto meet specific patient and physician groups’ needs.1 2USA – FUNDAMENTAL REFORMSThe USA spends more on healthcare per capita than any otherdeveloped country, however increasing costs are no longersustainable in the context of the economic challenges and theneed to significantly reduce the federal deficit. The magnitudeof the funds to be identified is such that healthcare programmes(Medicare, Medicaid) are being targeted for spending cuts inaddition to other areas, such as defence.collaboration between payers, plansand providers. With mounting pressurefrom employers and government and agrowing lower margin in Medicare andMedicaid business, the insurance sectorand healthcare providers are continuallyconsolidating to achieve efficiencies,and making strategic decisions.Definitions are blurring between payersand providers as new entities mergeand emerge.PATIENT PROTECTION ANDAFFORDABLE CARE ACT (ACA)The ACA will make significantreforms to the healthcare system.ACA puts in place comprehensivehealth insurance reforms that willroll out over many years. One ofthe primary elements is providingcoverage to the uninsured due tostart in 2014. In addition, theMedicaid health programme forlow-income Americans will beexpanded. The ACA also imposesnew fees and rebates on the healthcaresector (pharmaceutical, healthplans, hospitals) to fund the expansionin coverage.Besides insurance coverage, the newAffordable Care Act (see left) encouragesvalue-based health system deliveryby providing incentives for healthcareproviders to form AccountableCare Organisations (ACOs), which willbe incentivised to coordinate careacross settings, improve quality, preventdisease and reduce hospital admissions.Unlike the current ‘fee forservice’ system, organisations with thebest outcomes will be paid more thanthose that perform poorly on qualitymeasures. One of the most fundamentalchanges the law may incent is thesubstantial increase in the levels ofEnduring implicationsThe combination of factors driving significantchange in the US healthcareenvironment has critical implicationsfor the pharmaceutical industry. Recognitionof the necessity of change, andthe planning and execution of effectivestrategies to meet the needs of the marketwill define success. Some examplesof areas of focus are:• Increased burden of proof will be requiredfor market access. With blockbustermedicines losing patent exclusivity,there are many generics withstrong profiles. Payers are seeking124 Boehringer Ingelheim annual report 2012

our marketsperspectives for established marketsBOEHRINGER INGELHEIM IN THE USABoehringer Ingelheim hasbeen represented in the USAsince 1971. In 2012, the companyhad 10,855 employees(average 2012) and turnoverof EUR 5.55 billion.Boehringer Ingelheim Pharmaceuticals,Inc., headquarteredin Ridgefield, Connecticut,is the largest US subsidiary.Other sites are located in thestates Ohio, Iowa, Missouriand California. BoehringerIngelheim Roxane, Inc., basedin Columbus, Ohio, is, forexample, one of BoehringerIngelheim’s production andlaunch sites.In Fremont, California, biopharmaceuticalproducts havebeen manufactured since 2011.The Animal Health business isalso represented in the USAby three sites, St Joseph, FortDodge and Ames.fremontfort dodgest josephcolumbusamesridgefieldbedfordpetersburgdemonstration of value of brandsversus generic standards of care,medical cost savings and defined andreproducible health outcomes.• Cooperation between payers, plansand organised providers will grow inimportance. New and different groupscontinue to be formed. Diversity inthe make up and focus of thesegroups will mean that the industrywill need to be flexible in its approach.Different competencies andaccount management skills are beingdeveloped.• The traditional detailing model tophysicians is facing challenges. Payerinfluence, laws and regulations andprovider consolidation, have impactedtraditional detailing models. Newengagement models with healthcareproviders are being developed, particularlywhere representative accessis restricted.• Empowered consumers and physiciansrequire multi-channel communication,decision support and behaviourmanagement tools.ACCESS, AFFORDABILITYAND QUALITYUS healthcare reform is centredon the core issues of access, affordabilityand quality of care.Transformation in healthcare tomeet these needs is dynamic.Boehringer Ingelheim is focusedon the planning and executionof effective go-to-market and externalcollaboration strategies,adopting new business prioritiesand capturing the current andfuture business opportunities.• Personalised medicines, the approachof tailoring medicines to the individual,is no longer confined to researchlaboratories. The last decadehas seen an increasing number oftargeted therapies brought to market,improving the predictability ofoutcomes. Boehringer Ingelheimwill be entering the field of personalisedmedicines in 2013 with entryinto oncology and with the launchof afatinib.USA – fundamental reforms125

211 View of Tokyo with Japan’s highest mountain,Mount Fuji.2 A low birthrate and a long life expectancy aretrends in the Japanese population.3 Boehringer Ingelheim in TokyoJAPAN – HEALTHCAREFINANCING UNCLEARAccording to an estimate by the government in Tokyo, Japan’s populationwill undergo enormous contraction and ageing in the comingyears. Against this background, what the financing of the healthcaresystem will look like in the years ahead remains unclear.low birth rate, coupled with long lifeexpectancy, hardly any industrialisedsociety is ageing as fast as Japan. It isforecast that, in 2060, the average agewill be over 84 for a man and almost91 for a woman.ADAPTATION OF LIFESTYLEThe lifestyle of the Japanese isadapting increasingly to that ofwestern societies. The result is anincrease in chronic diseases, mostof all cardiovascular diseases.The country currently has 128 millioninhabitants. In the coming 50 yearsor so, it will, however, lose a third ofits population, according to estimatesby the Japanese Social Affairs Ministry.As a share of the total population,Japanese people over 65 years of agewill by then have almost doubled to40%, while the under 15s will havemore than halved, amounting to almosteight million.It is presumed that the low birth rateof 1.39 children per couple will fall toan average of 1.35 by 2060. Due to itsFinancing of the healthcare systemThe health insurance administrationsees itself confronted by a deficit inorder to be able to treat increasingnumbers of patients with Alzheimer’sdisease, cancer and lifestyle diseases,such as diabetes and cardiovasculardiseases. The healthcare deficit, especiallyfor the elderly, is particularlylarge as it generally has higher medicalexpenditure. Overall reform of thesystem is now under discussion. Thekey focus has been on the balance betweencost reduction and retainingcontinuous provision of high qualitymedical services.126 Boehringer Ingelheim annual report 2012

our marketsperspectives for established marketsBOEHRINGER INGELHEIM IN JAPANIn Japan, the company has atotal of 2,652 employees (meanheadcount 2012). In the 2012financial year, total turn over ofEUR 2.11 billion was generatedin the country.As a result of the acceleratedregistration process, pradaxa®(brand name in Japan prazaxa®)was launched on the Japanesemarket in 2011, a year earlierthan expected. trajenta® (trazenta®)was also introduced in2011.Japan is the largest market formicardis® in the BoehringerIngelheim group of companies.The product has been marketedfor over ten years in cooperationwith the company Astellas.Cooperations between westernand Japanese companies aremuch favoured and widespread.Japanese companies are therebyable to improve access to westerninnovations, while the westerncompanies receive valuablesupport on the Japanese market.yamagata3kobetokyo and naritaPromotion of genericsJapan has traditionally been a pharmaceuticalmarket with limited genericpenetration (around 20%). This ismainly attributable to the loyalty ofthe Japanese to branded medicines.In order to reduce state healthcare expenditure,generics are projected toaccount for a 30% share of the totalmarket for prescription medicines inthe coming years.The Japanese pharmaceutical marketnevertheless remains attractive for innovativeproducts and is expected tocontinue to grow. In 2010, the Chuikyo(Japan’s Central Social InsuranceMedical Council) on a test basis introduceda form of incentive scheme forpatent-protected products. Productsthat still have no generic equivalenton the market are exempted from theusual biannual price reductions. Thisleads to prices on the Japanese pharmaceuticalmarket being quite stablecompared with the trends in westerncountries.In order to remove the drug lag, i. e.the delayed registration of innovativemedicines on the Japanese marketwhich has lasted for years, various initiativeshave been taken. In the past,the Japanese authorities demandedextensive clinical data from participantsin studies in Japan. The cost wasin part excessively high for pharmaceuticalcompanies and the Japanesemarket was denied innovations on occasionsas a consequence. This situationhas improved somewhat in themeantime. Data are generated in westernpopulations now also more readilyaccepted in Japan.THERAPEUTIC AREASThe medicines with the largestturnover on the Japanese pharmaceuticalmarket are drugs to treatfor cardiovascular diseases. Insecond place are alimentary andmetabolic drugs.Japan – healthcare financing unclear 127

IF YOU HAVE ANY QUERIES OR COMMENTS,PLEASE CONTACT US.Boehringer Ingelheim GmbHBinger Strasse 17355216 IngelheimGermanyTelephone + 49 6132 77-0Fax + 49 6132 72-3000ContactCorporate Division CommunicationsE-mail webmaster@boehringer-ingelheim.comInternet www.boehringer-ingelheim.comIssued byBoehringer Ingelheim GmbHDesign and layoutmpm · Corporate Communication Solutionswww.digitalagentur-mpm.dePhotosdieth + schröder Fotografie (p. 6, 30)dpa Picture-Allianz GmbH (p. 126), Fotolia (p. 55, 77, 124), Getty Images (p. 58, 82, 93, 120, 122, 126),iStockphoto (p. 102), plainpicture (p. 114, 120), Sciencephoto (p. 29, 52, 67, 97)Printed bySüddeutsche Verlagsgesellschaft, UlmCopyright©Boehringer Ingelheim GmbH, 2013All rights reserved. No part of this Annual Report 2012 may be reproduced or transmittedin any form or by any means, electronic or photocopy, without permission in writing fromBoehringer Ingelheim GmbH. Figures from third parties used in the annual report are basedon data available at the time the financial statement was drawn up.

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Value through InnovationBusiness Year 2012

usiness year 2012contentour company6 THE SHAREHOLDERS’ PERSPECTIVE10 KEY ASPECTS 201217 CORPORATE BODIESgroup management report 201220 BUSINESS AND OPERATING ENVIRONMENT31 NET ASSETS, FINANCIAL POSITION AND RESULTSFROM OPERATIONS36 REPORT ON POST-BALANCE SHEET DATE EVENTS36 RISK REPORT37 REPORT ON EXPECTED DEVELOPMENTSconsolidated financial statements 201240 OVERVIEW OF THE MAJOR CONSOLIDATED COMPANIES42 CONSOLIDATED BALANCE SHEET43 CONSOLIDATED PROFIT AND LOSS STATEMENT44 CASH FLOW STATEMENT45 STATEMENT OF CHANGES IN GROUP EQUITY46 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS66 AUDITOR’S REPORT

product portfolio70 [ branded prescription medicines ]70 RESPIRATORY DISEASES72 DISEASES OF THE CENTRAL NERVOUS SYSTEM74 CARDIOVASCULAR DISEASES78 METABOLIC DISEASES78 INFECTIOUS DISEASES80 [ consumer health care ]80 COUGH AND COLD80 SORE THROAT82 GASTROINTESTINAL DISEASES84 VITAMINS AND SUPPLEMENTS84 UROLOGICAL DISEASES86 LEG VEIN HEALTH86 PAIN88 [ animal health ]88 FOOD PRODUCING ANIMALS – SWINE88 FOOD PRODUCING ANIMALS – POULTRY90 FOOD PRODUCING ANIMALS – CATTLE92 COMPANION ANIMALS – HORSE94 COMPANION ANIMALS – SMALL ANIMALSCONTENT

Boehringer Ingelheim groupFINANCIAL HIGHLIGHTSAmounts in millions of EUR, unless otherwise indicated 2012 2011 ChangeNet sales 14,691 13,171 12%by regionEurope 29% 31%Americas 47% 46%Asia, Australasia, Africa 24% 23%by businessHuman Pharmaceuticals 93% 93%Animal Health 7% 7%Research and development 2,795 2,516 11%Personnel costs 4,024 3,664 10%Average number of employees 46,228 44,094 5%Operating income 1,853 2,272 — 18%Operating income as % of net sales 12.6% 17.3%Income after taxes 1,237 1,476 — 16%Income after taxes as % of net sales 8.4% 11.2%Shareholders‘ equity 6,178 7,466 — 17%Return on shareholders‘ equity 16.6% 22.8%Cash flow 2,225 2,378 — 6%Investments in tangible assets 562 458 23%Depreciation of tangible assets 793 535 48%Top 4 products — Prescription MedicinesNet sales 2012 in millions of EUR changespiriva® 3,562 + 13%micardis® 1,623 + 2%pradaxa® 1,108 + 76%combivent® 883 + 15%Top 4 products — Consumer Health CareNet sales 2012 in millions of EUR changebuscopan® 212 + 18%dulcolax® 193 + 13%mucosolvan® 166 + 4%pharmaton® 136 – 1%

usiness year 2012our companyOUR COMPANYBoehringer Ingelheim is a research-driven company dedicated toresear ching and developing, manufacturing and marketing pharmaceuticalsthat help to improve health and quality of life.Our businesses are human pharmaceuticals and veterinary medicines.We focus on innovative drugs and treatments that represent therapeuticadvances.Excellence in innovation and technology guides our actions in allareas. Our products have long been highly successful in the treatmentof respiratory, cardiovascular, central nervous system and infectiousdisorders. We have successfully launched new and innovative productsin thrombo-embolic and metabolic diseases. In addition, we have successfullyadvanced our research in respiratory, infectious and oncologicaldiseases.We have more than 46,000 employees in 140 affiliated companies andoperate global networks of research and development (R&D) facilitiesat six sites and 20 production sites in 13 countries. R&D expenditurein the business area Prescription Medicines corresponds to 22.5% of itsnet sales.Our headquarters is at Ingelheim, the German town where the familyownedcompany was founded in 1885.Our Company5

THE SHAREHOLDERS’PERSPECTIVEchristian boehringerchairman of the shareholders’ committeeAs the shareholder family of our company, Boehringer Ingelheim, we with selfconfidencepursue our own independent path.In doing so, our direction is marked by a basic ethical understanding that placesall our corporate activity in the service of human health.Vision – Value through InnovationThe independent path lies in consistent focus on innovations from our own researchand development. For us it is important that we always retain our curiousityabout what is truly new and convey this curiosity within our company.Improving therapeutic approaches encompasses partnerships with industrial andacademic research to expand our knowledge and our capabilities for developinginnovative medicines for patients. This gives our company a perspective expressedin our vision: Value through Innovation.6Boehringer Ingelheim annual report 2012

usiness year 2012the shareholders’ perspectiveThe patient’s partner – guided by people’s medical needsWe thereby succeed, together with the Board of Managing Directors and our employees,in making sustainable progress in the form of medicines and solutionsthat help people, giving physicians who provide treatment the opportunity of new,more effective and more efficacious therapies. We are guided by people’s medicalneeds, defined as needs for which there are today no adequate therapy options.We regard Boehringer Ingelheim as the patient‘s partner that provides innovativemedicines for better health.Passion for research and developmentPart of our own way is also that we have been able to achieve our innovations inhuman and veterinary pharmaceuticals from within, with our own network ofresearch and development sites, which has been successful for many years. Theefficient interplay between different strengths in each region is a key success factorhere. We feel that this strengthens our conviction that our investments and resultsin the form of innovative medications have far exceeded the industry average for along time.From our long corporate history as a research-driven pharmaceutical companywe know that innovations require decades, not just quarters. It takes over farmore than ten years before a new medication finds its way from the laboratory topatients. Part of the independence is also that researchers have been able to realisetheir innovations with the necessary long-term perspective, despite a cyclicalbusiness environment. At Boehringer Ingelheim investments in research anddevelopment also have an overarching emotionally binding component, as everyinnovation improves human health.The shareholders’ perspective7

Core business secures new growth initiativesWe plan long-term, over generations. A stable core business with safe and effectivemedicines creates the freedom and security to also think about completelynew types of growth initiatives, free from economic cycles, especially in currenttimes when the pharmaceutical environment is undergoing dynamic change. In avolatile environment we have, due to our solid development, the strength to reactwith agility and flexibility.Employees the strongest innovative forceWith our stability as an independent, family-owned company and our long-termplanning horizon, we give our employees the space and the freedom to develop aportfolio of innovative ideas. This has created a trusting and responsible environmentand thereby the unmistakeable corporate culture at Boehringer Ingelheim.A set of values, which we live out with our employees, places our employees in theforeground as the decisive success factor and its most important innovative force.Research and development partnershipsWe have established research and development partnerships with biotechnologycompanies, universities and basic research institutions. With the Research Instituteof Molecular Pathology (IMP) in Vienna, Austria, Boehringer Ingelheim supportsan institution that works exclusively with basic research. This enables thecompany, in cooperation with the scientific community, to integrate external innovationsinto the company in dependable and trustful partnership.Furthermore, we have set up a partnership with the non-governmental organisationAshoka within the framework of our “Making More Health“ initiative. Wecooperate with social entrepreneurs in the field of health projects and therebywant to learn how our partners design and further develop innovative solutionsin the area of healthcare provision using novel and sustainable approaches.8Boehringer Ingelheim annual report 2012

usiness year 2012the shareholders’ perspectiveWe look after our patients, partners and employeesAll our business activities have the goal of making the best possible medicationsavailable to people. Here we see Boehringer Ingelheim in the role of the partnerof physicians, state authorities and non-governmental organisations, and, notleast, of patients, for providing innovative medicines and solutions for betterhealth. We cooperate with trust, fairness and mutual respect with our employees.Our basic principle is to encourage each employee to take responsibility for themselvesand others in their actions.We, the shareholders of Boehringer Ingelheim, will, together with the Board ofManaging Directors and our employees further shape the future of BoehringerIngelheim. We would like to express our warmest thanks to everyone mentionedfor the work they have done over the past year, their continued commitment.For us the paramount goal remains independence as a family-owned companythat makes progress for the benefit of patients.signed bychristian boehringerchairman of the shareholders’ committeeThe shareholders’ perspective9

KEY ASPECTS 2012andreas barner, wolfram carius, allan hillgrove, joachim hasenmaier,hubertus von baumbach (from left to right)the board of managing directors10Boehringer Ingelheim annual report 2012

usiness year 2012 key aspects 2012Successful long-term, sustainable development of the company, allied with stableearnings and sound finances, is and will remain the basis of our independence andis central to the strategic direction of the Boehringer Ingelheim group of companies.Besides independence, the paramount goal is our most important endeavour tomake in equal measure available a high level of medical progress to patients andphysicians treating them by researching innovative medicines, especially in indicationswith urgent medical need.Growth maintainedIn 2012, Boehringer Ingelheim was able to build on its successful, above-marketgrowth from the previous year and achieved a growth rate of + 11.5%. We therebyjudge 2012 to be a successful year. Exchange rate developments in the currencymarkets, and the the currency effect associated with them, furthermore had anadditional EUR 664 million positive impact of the company‘s growth (currencyadjustedour growth was + 6.6%).Both our new products, such as the anticoagulant pradaxa® and the diabetes medicationtrajenta®, as well as established products, such as the respiratory medicinesspiriva® and combivent®, were the main growth drivers – all products from ourown research.In external comparisons of pharmaceutical companies, Boehringer Ingelheim is,according to the data from independent market research companies, again one ofthe fastest growing companies.Stable earnings and financial position in a difficult marketBoehringer Ingelheim made an operating profit of EUR 1,853 million. This correspondsto an operating margin of 12.6%.Key aspects 201211

We are satisfied with this result, as the successful operative business developmentoverall was negatively impacted by a multitude of one-off and extraordinary effects.Behind these effects are decisions which we have taken in order to preparethe group of companies for a changing business environment. With these measureswe have created a good starting position for ourselves for the years ahead.Our financial management aims to ensure liquidity, limit financial risks and optimisethe cost of capital. It is noteworthy that it allows the overall financing of thegroup of companies to maintain our independent, organic growth.Our fields of businessBoehringer Ingelheim divides its business activities into the areas Human Pharmaceuticals,Biopharmaceuticals and Animal Health.Human PharmaceuticalsOur Human Pharmaceuticals business’s sales were EUR 13,081 million, therebyshowing gratifying growth of around + 12%, (currency-adjusted + 7.7%). With an89% share of total sales, our Human Pharmaceuticals business (including PrescriptionMedicines and Consumer Health Care) is Boehringer Ingelheim’s largestbusiness area.Prescription MedicinesIn this business, the business area Prescription Medicines generated sales growth of+ 13%, amounting to EUR 11,405 million. In 2012, our anticoagulant pradaxa®,with sales of EUR 1.1 billion, exceeded the EUR 1 billion sales mark for the first time.The products spiriva® (EUR 3.6 billion), already established for 10 years, micardis®(EUR 1.6 billion) and combivent® (EUR 883 million) continued to grow.In addition, trajenta®, for the treatment of type 2 diabetes, has significant salespotential. trajenta® is marketed with Eli Lilly and Company within the frameworkof our strategic alliance in the field of diabetes. We consider it very disappointingthat trajenta®, a medication developed and manufactured in Germany, is preciselynot available in Germany for patients with type 2 diabetes. We remain convincedthat trajenta® has a distinct, patient-relevant, added benefit and we seeour position confirmed by positive therapeutic experiences in some 40 countriesaround the world.12Boehringer Ingelheim annual report 2012

usiness year 2012 key aspects 2012Furthermore, the evaluation of the German Joint Federal Committe (G-BA) fortrajenta® means the setting of a reimbursement price on a level with genericsulphonylureas. This is unacceptable for a newly developed, innovative active ingredientin the DPP-4 inhibitor class.Consumer Health CareThe business area Consumer Health Care has grown again mainly in emergingmarkets and achieved worldwide sales of EUR 1,505 million, corresponding togrowth of + 7.8% compared to the previous year.BiopharmaceuticalsThe business area Biopharmaceuticals focuses on the development and productionof new, innovative biopharmaceuticals. It is comprised of the contract manufacturingbusiness, biosimilars and the research and development of new biologicalactive ingredients. Here, Boehringer Ingelheim achieved net sales amounting toEUR 549 million (+ 5.3%)Boehringer Ingelheim’s contract manufacturing business is now represented byour new brand Boehringer Ingelheim BioXcellence, which in the market standsfor excellence, quality and reliability. We want to further expand our position asthe world’s biggest producer of contract-manufactured biopharmaceuticals andoffer the whole production technology chain from DNA to fill and finish. Togetherwith our customers, we have in past few years brought a total of 22 biopharmaceuticalcompounds (or new biological entities – NBEs) to market. In addition, wehave decided to expand our current Biopharmaceuticals business to developingbiosimilars.Animal HealthThe products in our Animal Health business developed equally favourably, withtotal turnover of EUR 1,062 million (+ 8.8%), led by ingelvac circoflex®, a swinevaccine, with sales of EUR 279 million (+ 8,6%).Key aspects 201213

Research with passionIn 2012, we employed an average of 7,492 people at our R&D sites. A total of almostEUR 2.8 billion was invested in the research and development of new medicines forhumans. R&D expenditure in the business area Prescription Medicines corresponds+ 22.5% of its net sales. Boehringer Ingelheim thereby once again increased its researchand development activities compared to the previous year and once more exceedsthe industry average.In Human Pharmaceuticals we are presented with a well-filled pipeline of competitivesubstances, mainly in oncology, diabetes, asthma and hepatitis C. And wehave a tight series of planned launches of product innovations and thereby continuedgrowth potential.In Animal Health the focus is on the research and development of innovative vaccines,primarily for protecting livestock and companion animals, as well as on pharmaceuticalproducts. Boehringer Ingelheim invested around EUR 115 million in 2012,roughly 11% of total Animal Health sales, in researching and developing new productsand in building up a global network of new R&D sites. An average 450 employeesworked at Animal Health’s R&D sites in the USA, Germany, Mexico, Chinaand Japan in 2012, researching new active ingredients for animal health and forward-lookingtherapeutic solutions.Future challengesOur own research and development will also be of paramount priority in the future.On the basis of promising product innovations in our research and developmentpipeline, we are laying the foundations for Boehringer Ingelheim’s continuous,organic, economic growth.We will be in the position of being able to, and having to, invest in launching substancesfrom our well-filled product pipeline in the therapeutic areas oncology,diabetes, asthma and hepatitis C. After entering the diabetes market in 2011, weexpect to enter oncology market in 2013 and extend our respiratory portfolio. Thesubstances from the advanced pipeline, foremost afatinib in lung cancer and tiotropiumor olodaterol in respiratory diseases, have the potential to be ready for themarket as early as in 2013 as well as in the next few years.14Boehringer Ingelheim annual report 2012

usiness year 2012 key aspects 2012Boehringer Ingelheim will also in the future face up to the challenges of dynamicallychanging healthcare systems. The heightened cost pressure in healthcare systemshas led to questions in the political and social world as to whether new medicines canbe afforded within the framework of reduced health budgets, even when they aresuperior to conventional therapies. The company could already feel this developmentwith the initial launch of pradaxa® and, most of all, with trajenta® in Germany.But we will continue to focus on further increases in efficiency by employing thelatest technology, as well as reducing complexity, in order to ensure BoehringerIngelheim’s competitiveness. Building up a global shared service center in Ingelheim,Germany, will progress the globalisation and standardisation of content, processesand systems. The operation and steering of the company will hereby be more efficientand more flexible.We have always been committed to Germany as location. Germany is the central locationof this global company Boehringer Ingelheim where we achieve only 7% of ourturnover, but where we have created jobs for 28% of our employees. A country inwhich we make 50% of our total investments, and in which we invest a research anddevelopment share of more than 50% for new, innovative medications. In Germanywe also pay over 77% of our taxes.As a research-driven company, we can only invest in the research and development ofnew, innovative medicines, if the corporate risk and innovations are rewarded at a riskadequatelevel. Public sector cost-benefit calculations, primarily in Germany, solelybased on cost control, are short-sighted with regard to sustainable improvement of thehealthcare system.OutlookWe are convinced, on the basis of our established product portfolio and the successfullaunches of new products from our own research and development expected for2013 and beyond will sustainably reinforce and expand our position in the globalhuman and veterinary pharmaceuticals market.Key aspects 201215

Our goals will be achieved jointly with our employees with much effort, engagementand creativity. We fully appreciate the performance of our highly qualified and committedemployees as our decisive basis of our company’s success, be it above-marketgrowth, making available a substantial pipeline or ourselves manufacturing our ownproducts for future launch. That is why we would like to express our particular thanksto our employees for the success of the past year.For 2013, we expect to be able to maintain growth and anticipate a mid-single digitincrease in sales compared to the financial year 2012.signed byandreas barnersigned byhubertus von baumbachsigned bywolfram cariussigned byjoachim hasenmaiersigned byallan hillgrove16Boehringer Ingelheim annual report 2012

usiness year 2012corporate bodiesCORPORATE BODIESShareholders’ CommitteeBoard of Managing Directors*christian boehringerChairman of the Shareholders’ Committeechristoph boehringererich von baumbach jr.ferdinand von baumbachisabel boehringerdr mathias boehringerAdvisory Boardprof. dr michael hoffmann-beckingAttorney at Law, DüsseldorfChairman of the Advisory Boardegbert appelTrustee, Martin Hilti Family TrustMember of the Board and Managing DirectorHilti Foundationdr andreas kreimeyerMember of the Board of Executive Directorsand Research Executive DirectorBASF SEprof.** dr dr andreas barnerChairman of the BoardCorporate Board Divisions Human Resources andResearch, Development and Medicinehubertus von baumbachCorporate Board Division Financeprof. h.c. dr wolfram cariusCorporate Board DivisionsBiopharmaceuticals and Operationsdr joachim hasenmaier (from 01.10.2012)Corporate Board Divisions Animal Health andConsumer Health Careallan hillgrove (from 01.01.2013)Corporate Board DivisionPharma Marketing and Salesengelbert tjeenk willink (until 31.12.2012)Corporate Board DivisionPharma Marketing and Salesprof. dr fredmund malik (until 31.12.2012)Chairman of the BoardMalik Management Zentrum St. Gallen AGjan rinnertVice Chairman of the Board of ManagementHeraeus Holding GmbH* Change of structure of Corporate Board Divisionsfrom 01.10.2012** Republic of AustriaCorporate bodies17

18Boehringer Ingelheim annual report 2012

usiness year 2012group management report2012GROUP MANAGEMENT REPORTcontents20 BUSINESS AND OPERATING ENVIRONMENT31 NET ASSETS, FINANCIAL POSITION ANDRESULTS FROM OPERATIONS36 REPORT ON POST-BALANCE SHEET DATE EVENTS36 RISK REPORT37 REPORT ON EXPECTED DEVELOPMENTSGroup Management Report19

GROUP MANAGEMENT REPORT 2012BUSINESS ANDOPERATING ENVIRONMENTEconomic environmentThe global economy continued to lose momentum in the2012 calendar year. At 3.0%, the growth rate was downon the previous year’s figure of 3.8%. One crucial factorhere was the sovereign debt and banking crisis in theeurozone, which triggered considerable uncertainty inthe global economy. Significant cuts in the public andprivate sectors of the industrialised nations had a lastingnegative impact on their economic development. Fallingimport demand in the industrialised nations, generallyhigh levels of uncertainty and country-specific factorsalso led to an economic slowdown in the emerging anddeveloping countries, where growth totalled 5.1% in 2012,down 0.8 percentage points on the previous year. At 2.2%,the US economy achieved robust growth compared withthe eurozone, helping to stabilise the global economyalong with Japan and emerging countries, such as Chinaand India.Economic growth of 2.4% is expected for 2013. Twoopposing effects come into play here. Growth in the USAand in Japan is expected to be weaker than in 2012. Incontrast, the emerging countries have the opportunity togenerate higher growth rates in 2013 by using their monetaryand fiscal room for manoeuvre. For the emergingand developing countries, the World Bank forecastsgrowth of 5.5%. The progression of the crisis in the eurozonecontinues to be regarded as a key factor in the developmentof the global ecoomy. A 1.3% increase in realgross domestic product is expected for the industrialisednations.The economy of the eurozone was in recession in 2012(– 0.4%) and showed a mixed picture, as in previousyears. The decline in economic output in some southernEuropean countries was exacerbated by the sovereigndebt crisis, restrictive fiscal policy, a difficult labour marketsituation and high capital outflows. The uncertaintysurrounding the further progression of the crisis causedmany companies to delay their investment projects orshelve them entirely. In contrast, foreign trade had a bolsteringeffect. For the 2013 financial year, the WorldBank forecasts a 0.1% drop in real gross domestic productand therefore expects another year of recession inthe eurozone. The weak external environment and de-Net sales by business (in millions of EUR)Prescription Medicines201211,4052011 10,096Consumer Health Care20121,5052011 1,396Pharma Chemicals and Pharmaceuticals Production2012 1622011 178Biopharmaceuticals2012 5492011 519Animal Health2012 1,0622011 97620Boehringer Ingelheim annual report 2012

usiness year 2012group management reportNet sales by region (in millions of EUR)Europe 4,194 4,0372012 2011Asia,Australasia,AfricaAmericas 6,905 6,087(AAA) 3,592 3,0472012 20112012 2011started the 2012 financial year at 1.29 USD/EUR andranged between 1.21 USD/EUR and 1.35 USD/EUR asthe year progressed. After reaching its yearly high againstthe US dollar in the first quarter, the euro entered severalmonths of decline, ending in July at an exchange rate of1.21 USD/EUR. By the end of the year, the euro had recoveredagainst the US dollar. Contributory factors herewere the approval of the European Stability Mechanism(ESM) by the German Federal Constitutional Court, theannouncement of a new scheme involving the purchaseof government bonds by the European Central Bank (ECB)and an agreement with Greece regarding further aidpayments. The year ended with an exchange rate of 1.32USD/EUR, meaning that the euro had gained 2% comparedwith 31 December 2011.velopments in the eurozone also had an increasing impacton the German economy. Economic output rose byjust 0.7% in 2012. As a result of export success in thirdcountries, a key growth factor, Germany’s performancecontrasted with the weak economic development in theeurozone. The German labour market continued to developpositively. Another new high of just under 42 millionin work was reached in 2012. The average numberof unemployed during the year fell to 2.3 million. TheIfo Institute expects a 0.7% increase in real gross domesticproduct in the current financial year, but points to ahigh level of forecasting uncertainty due to the dependenceon overall economic developments in the eurozone.In December 2012, the annual inflation rate in Germanystood at 2.0%, thus matching the European Central Bank’starget. Rising food prices were the main reason for theincrease in consumer prices, while the upward trend inenergy prices slowed down slightly. In the eurozone, theannual inflation rate stood at 2.2% in December. Increasedexcise duty in some EU countries, such as Spain and theNetherlands, had a significant impact here.In addition to the euro, the other key currencies forBoehringer Ingelheim are the US dollar (USD) and theJapanese yen (JPY). In relation to the US dollar, the euroAnother key currency for Boehringer Ingelheim, theJapanese yen (JPY), fluctuated significantly in the 2012financial year. The exchange rate of the euro against theJapanese yen varied between 94 JPY/EUR and 114 JPY/EUR, which equates to a fluctuation range of more than20%. After the euro initially gained against the Japaneseyen, the European currency fell to its yearly low of 94 JPY/EUR in July 2012 due to the European debt crisis. Theeuro then underwent a continuous recovery against theJapanese yen up to the end of 2012, reaching a 17-monthhigh of 114 JPY/EUR on 27 December. This developmentis largely attributable to easing of policy by the JapaneseCentral Bank (BOJ), which combated deflation with extensivebond purchases and key interest rates of temporarily0%.The growth of the global pharmaceutical market deceleratedin 2012. The year on year growth of around 1.6%was significantly lower than in 2011 (4.6%). Health policymeasures and price regulations, mainly in establishedindustrialised nations, put pressure on the pharma business.Growth in the worldwide pharmaceutical marketwas largely driven by high growth rates in emergingmarkets. For 2012, market researchers are anticipating astagnation or merely a small growth for the global pharmaceuticalmarket.Business and operating environment 21

Business at Boehringer IngelheimIn the 2012 financial year, the Boehringer Ingelheimgroup of companies maintained its growth path despitethe challenging economic and political environment.A period of organic growth for the company started backin 2011, chiefly as a result of the approvals of the productspradaxa® and trajenta®, which were researchedand developed in-house. The positive trend continued in2012 with sales of EUR 14,691 million. At 11.5%, yearon-year(6.3% after adjustment for exchange rate effects)sales growth was stronger than that of the global pharmaceuticalsmarket, making Boehringer Ingelheim oneof the fastest-growing among the 20 leading pharmaceuticalcompanies. This growth was driven by the anticoagulantpradaxa®, launched in 2011, and the diabetesdrug trajenta® as well as established respiratory tractproducts spiriva® for chronic obstructive pulmonarydisease (COPD) and combivent® for COPD and asthma.These products all posted double-digit sales growth,thus making a key contribution to the increase in sales.Besides this positive business development, the changesin healthcare must be taken into account. Increasedcost pressure in healthcare systems has led politiciansand society to consider whether new drugs are affordablein the context of reduced health budgets, even ifthey are superior to conventional treatments. The companyfelt the effects of this development when launchingpradaxa® and trajenta®.As part of our corporate strategy, we are focusing ourbusiness activities on research, development and marketingof innovative medications. By concentrating onour strengths in this way, we are laying the foundationsfor continuous organic growth. In areas where we requirenew expertise, or if meaningful market opportunitiesarise, Boehringer Ingelheim will also evaluate opportunitiesfor external growth.Since the last financial year, Boehringer Ingelheim’s operatingactivities have been divided into Human Pharmaceuticals,Biopharmaceuticals and Animal Health.The new Biopharmaceuticals business unit consists ofthe contract manufacturing business, biosimilars and researchand development of new biological active ingredients.The contract manufacturing business has beengiven its own identity with the brand name BoehringerIngelheim BioXcellence.By establishing of a global shared service centre in Ingelheimwe are putting focus on globalising and standardisingcontents, processes and systems to help the companyto achieve greater efficiency and flexibility worldwide.The situation at our US subsidiary Ben Venue Laboratories,Inc. again had a negative impact on our business in2012. After what we regard as a necessary suspension ofproduction in November 2011, extensive renovation andcorrective actions were required in the last financial year.In January 2013 we have voluntarily entered into a ConsentDegree (CD) with the US Food and Drug Administration(FDA) . Under this CD Ben Venue Laboratories,Inc. has the right to continue to manufacture and sellmore than 100 products. Ben Venue Laboratories, Inc.will be fully focused on the company’s own genericsbusiness in future. The contract manufacturing that iscurrently still being carried out at the location will betransferred to other manufacturers in a transfer processlasting several years.Efficiency enhancements and essential rationalisationmeasures remain the focal point in order to ensure thatthe group of companies remains competitive in an environmentmade increasingly tough by growing cost pressurein the healthcare systems. In connection with this,cost-reduction initiatives have been launched. They hada short-term negative impact on income in 2012.In the 2012 financial year, Boehringer Ingelheim’s salesdeveloped positively in all three regions (Americas, Europeand Asia/Australasia/Africa). The Americas regiongenerated sales of EUR 6,905 million, up 13.4% on theprevious year. With around 47% of our total sales, theAmericas region remained Boehringer Ingelheim’s mostimportant sales market. The Asia/Australasia/Africa regionagain posted the strongest growth, at 17.9%. With22Boehringer Ingelheim annual report 2012

usiness year 2012group management reportnet sales of EUR 3,592 million, this increasingly significantregion accounts for around 24% of total sales. TheEurope region posted a slight increase in sales (+3.9%) toEUR 4,194 million. Around 29% of group sales are thusgenerated in this region.Net sales by region(in millions of EUR) 2012 2011 ChangeAmericas 6,905 6,087 13.4%Europe 4,194 4,037 3.9%Asia, Australasia, Africa (AAA) 3,592 3,047 17.9%The sales of our Human Pharmaceuticals business totalledEUR 13,080 million in the last financial year, apleasing increase of around 12% (7.7% after adjustmentfor exchange rate effects). With an 89% share of totalsales, Human Pharmaceuticals is Boehringer Ingelheim’slargest business. Within this business, the PrescriptionMedicines division generated sales of EUR 11,405 million,an increase of 13.0% (7.1% after adjustment for exchangerate effects). The Consumer Health Care divisionachieved further growth, particularly in the emergingmarkets, generating global sales of EUR 1,505 million,up 7.8% year-on-year (4.7% after adjustment for exchangerate effects). The Biopharmaceuticals division generatedannual sales of EUR 549 million, an increase of 5.8%.Our products in the Animal Health division also performedpositively, with total sales of EUR 1,062 millionand a growth rate of 8.8% (3.8% after adjustment for exchangerate effects), led by the product with the strongestsales, ingelvac circoflex®.Net sales by businesses(in millions of EUR) 2012 2011 ChangePrescription Medicines 11,405 10,096 13.0%Consumer Health Care 1,505 1,396 7.8%Pharma Chemicals andPharmaceutical Production 162 178 — 9.0%Biopharmaceuticals 549 519 5.8%Animal Health 1,062 976 8.8%Overall, we are satisfied with the development of our salesin 2012. The positive development of our establishedproducts and the promising product innovations serve toaffirm our actions as a company. At EUR 1,853 million,Boehringer Ingelheim’s operating income correspondedto a return on sales of 12.6%.Key figures (in millions of EUR) 2012 2011 ChangeNet sales 14,691 13,171 11.5%Operating income 1,853 2,272 — 18.4%Return on net sales 12.6% 17.3%Research and development (R&D)In line with Boehringer Ingelheim’s corporate missionstatement, our primary objective is to develop innovativemedicines and treatments for diseases that cannot yet betreated in a satisfactory manner. We are constantly strivingto make an important contribution in areas wherethe need for treatment is high and to attain a leading positionin the major indication areas. In order to achievethis goal, we ensure that we are always up-to-date withstrategically important technologies and systematicallyresearch new key technological approaches. In addition,we believe in using the expertise of academic groups,public research facilities and biotech companies, andhave set up a global network.In the 2012 financial year, we employed an average of7,492 staff at our R&D sites. A total of around EUR2.8 billion was invested in the research and developmentof new drugs. This equates to 19.0% of group sales andthus reaches the level of research and development activitiesof the previous year.Boehringer Ingelheim’s successful research and developmentactivities and our innovative strength have alwaysprovided the basis and foundation for our positive economicdevelopment in previous years. In-house researchand development will remain a top priority in the future.One example of the rigorous implementation of ourstrategy is our investment of around EUR 50 million inbuilding a pilot facility for the production of newly developedpharmaceutical active ingredients in Biberach,Germany. Construction of the new technical centre willensure provision of the necessary amounts of new activeBusiness and operating environment23

ingredients for clinical trials, and is scheduled for completionat the start of 2014.Human PharmaceuticalsResearch and development activities, with our large researchsites in Germany (Biberach), the USA (Ridgefield)and Austria (Vienna), were focused on the following indicationareas:• Respiratory diseases• Cardiometabolic disorders(cardiovascular and metabolic diseases)• Oncology• Diseases of the central nervous system• Immunology• Infectious diseasesThe 2012 financial year saw the launch of the “DiseaseMap 2025”, which is aimed at constantly reviewing thefocus of the Prescription Medicines division with regardto indication areas and diseases to be treated. In a fastchangingexternal environment, it stipulates targets andcore areas in research, development and medicine wherewe want to develop our division. In the context of thisextensive review, Boehringer Ingelheim decided to stopits research work on virology. This led to the closure of theresearch site in Laval, Canada, which will be shut downin the first quarter of 2013. The reason for this is a trendtowards treating infectious diseases with vaccinations,an area in which Boehringer Ingelheim is not active.Boehringer Ingelheim is one of the world’s leading pharmaceuticalcompanies in the treatment of respiratorydiseases. So far, the most successful product from inhouseresearch is tiotropium, which has been availablefor ten years under the product name spiriva® and isused to treat chronic obstructive pulmonary diseases(COPD). The company currently has an extensive researchand development pipeline for treatment of COPD, asthma,idiopathic pulmonary fibrosis and lung cancer.Overall, various preparations in early phases of clinicaldevelopment (phase I and II) and additional active ingredientsin late development phases (phase III and approval)are available. One example is the respiratoryproduct olodaterol, a long-acting beta-2 agonist for treatingCOPD. Olodaterol is in the approval process and wasprimarily developed as a combination product for tiotropiumin the long-term treatment of COPD. The test substancenintedanib is a tyrosine kinase inhibitor for treatingidiopathic pulmonary fibrosis (IPF), and has shownpromising results in a clinical phase II study. IPF is arare disease with a high mortality rate a few years afterdiagnosis, meaning that there is a significant medicalneed for effective new treatments. Regarding this substance,admission of patients for the approval-relatedphase III study INPULSIS was completed in the secondquarter of 2012. The outcome of this study is expectedin 2014. The results of the phase III study PrimoTinA-Asthma showed that asthma patients who retainedsymptoms despite currently known treatment options reducedtheir exacerbations when treated with tiotropiumResearch and development 2012 2011 2010 2009 2008Expenditure in millions of EUR 2,795 2,516 2,453 2,215 2,109– as % of net sales 19.0 19.1 19.5 17.4 18.2Prescription Medicines expenditure in millions of EUR 2,563 2,372 2,306 2,100 2,016– as % of Prescription Medicines net sales 22.5 23.5 23.8 20.9 22.1Average number of employees 7,492 7,159 7,093 6,934 6,788Investments in tangible assets (without investments in infrastructure) in millions of EUR 139 112 83 125 14524Boehringer Ingelheim annual report 2012

usiness year 2012group management reportin the respimat® inhaler, thus helping to improve theirlung function. The respimat® inhaler is a propellantgas-free soft-mist nebuliser, which acts as a standard applicationfor our future respiratory system products.In the indication area of metabolic diseases, researchand development work is focused on active ingredientsfor the treatment of diabetes. On the basis of in-houseresearch programmes, Boehringer Ingelheim has identifiedseveral active ingredients with promising propertiesfrom a host of new substance classes. Clinical developmentof these active ingredients is being carried out incollaboration with Eli Lilly & Co. The first result of thisalliance is our drug trajenta® (active ingredient linagliptin),which was approved in 2011 in the USA, Japan andEurope and has been available since 2012 as a combinationproduct of linagliptin and metformin (jentadueto®)in the form of a single tablet. Linagliptin is a dipeptidylpeptidase-4 inhibitor (DPP-4 inhibitor) for the treatmentof type 2 diabetes and is approved as monotherapy andcombination therapy with metformin or with sulfonylureaand metformin. In addition, approval was grantedin 2012 for the use of linagliptin in combination withpro-ven anti-diabetic agents or as an add-on to insulintherapy. The product is also suitable for patients withimpaired kidney function, a frequent concomitant diseasewith diabetes.To determine the long-term effect in cardiovascularcomplications, Boehringer Ingelheim is currently conductingtwo major outcome studies. The CARMELINAstudy is examining linagliptin compared with placebos,while the CAROLINA® study is examining the productcompared with a representative of the sulfonylurea substanceclass, glimepiride.The efficacy and safety of the active ingredient empagliflozinis currently being determined in twelve multinationalphase III studies with over 14,500 patients, includinga cardiovascular outcome study. Empagliflozinrepresents a new class of anti-diabetic agents, SGLT-2inhibitors. In contrast to all other drugs, these do notlead to slower absorption of glucose from the intestineor modified glucose release in the body. Instead, theypromote the excretion of glucose from the kidneys, thusconverting the sugar determination in the urine from adiagnostic method to a therapeutic approach. Approvalof the active ingredient empagliflozin for the USA andEurope is likely to be applied for in 2013.In the indication area of oncology, Boehringer Ingelheimis committed to research and development of novel cancertreatments that give patients therapeutic added value,thus helping to improve their quality of life. The researchfield covers the development of targeted treatments forsolid tumours as well as for haematological cancers.Our oncology pipeline was enhanced again in 2012, withclinical research focusing on products for the three contrastingareas of angiogenesis inhibition, signal transductioninhibition and cell cycle kinase inhibition. In thecontext of our LUX® study programme, the substanceafatinib is currently in several phase III studies to examineits effect on non-small-cell lung cancers (NSCLC),head and neck cancer and breast cancer. Afatinib is anirreversible blocker of the ErbB family that inhibits signaltransduction of all kinase receptors of the ErbB familythat are involved in the growth and spreading of tumours.In 2012, based on the available results of theLUX®- Lung-3 study, Boehringer Ingelheim submitted anapplication for market approval for afatinib as a treatmentfor NSCLC with positive EGFR mutation status inEurope, the USA, Canada, Japan and other countries.The clinical phase II study programme to examine theactive ingredient volasertib led to positive results regardingtreatment of acute myeloid leukaemia (AML) in 2012.For patients with newly diagnosed AML who were notconsidered for standard therapy, positive study resultswere attained by treating them with volasertib in combinationwith a low dose of cytarabine (LDAC). Based onthese positive results, Boehringer Ingelheim announcedin December of the last financial year that a phase IIIstudy with volasertib in combination with LDAC was tobe initiated, with a scheduled start date of early 2013.Business and operating environment 25

With regard to the test substance nintedanib, severalphase III studies are currently being conducted, examiningthe efficacy of the substance for treating patientswith advanced non-small-cell bronchial carcinoma orfor treating female patients with ovarian cancer. The resultsof these extensive studies are expected in 2013.Boehringer Ingelheim’s development activities in thetherapeutic area of infectious diseases are focused onviral diseases with high, previously unmet medical needs.The focus here is on treatment of hepatitis c viruses(HCV). The portfolio comprises the enhancement of inhibitorsthat attack key viral enzymes, such as HCV serineprotease and RNA polymerase. Here, we are examiningthe two direct-action antiviral substances (DAA)faldaprevir (BI 201335) and BI 207127. The first is ahighly effective, orally administered HCV-NS3/4A proteaseinhibitor and is being examined in several multinational,randomised, double-blind and placebo-controlledphase II studies (SILEN-C® study programme). Theefficacy and safety of faldaprevir combined with pegylatedinterferon and ribavirin (PegIFN/RBV) in patients infectedwith HCV genotype 1 are being examined here. Inthe above-mentioned studies, faldaprevir shows an improvedsustained viral response (SVR), a measure ofhealing in viral diseases. The product was generally verywell tolerated and showed a beneficial safety profile, i.e.low incidence of skin rash and no anaemia or hepatictoxicity.Test substance BI 207127 is an NS5B-RNA-dependentpolymerase inhibitor with the potential, when used incombination with faldaprevir and ribavirin, to eliminatethe need for interferon for HCV treatment. BI 207127blocks a specific step in the viral life cycle by attacking ahighly preserved part of this polymerase enzyme, thussuppressing HCV replication. The HCVerso phase IIIstudies that are examining this dosage scheme were initiatedin the 2012 financial year. To provide HCV patientswith new medications in good time, the US Food andDrug Administration (FDA) has promised to accelerateprocessing of the interferon-based development programmesfor faldaprevir in combination with PegIFN/RBV and treatment without interferon with faldaprevirand BI 207127 plus ribavirin.Animal HealthThe main focal points of research at Boehringer Ingelheim’sAnimal Health business are the research and developmentof innovative vaccines, primarily to protectfood-producing animals and pets, and pharmaceuticalproducts. In the last financial year, the company investedaround EUR 115 million in research and development ofnew products and in setting up new R&D sites. This representsapproximately 11% of the overall sales generatedby our Animal Health business.New active ingredients are researched and future-orienttatedtherapeutic solutions are developed at our sites inthe USA, Germany, Mexico, China and Japan. As manyvaccines are based on local pathogens or pathogen variants,it is necessary to be represented with in-house research,development and production facilities in all keysales regions. The 2012 financial year saw the opening ofthe European Research Centre for Animal Vaccines inHanover, Boehringer Ingelheim’s fourth German site.We invested more than EUR 40 million in the BoehringerIngelheim Veterinary Research Centre (BIVRC). 55 employeesare already working on developing innovativevaccines for livestock. By 2017, up to 102 highly qualifiedscientists, laboratory workers and animal keepers areexpected to work at the BIVRC. Our first Asian researchand development centre for veterinary medicine has beenbuilt in China. Boehringer Ingelheim is investing a totalof EUR 12 million in the centre at the Zhangjiang High-Tech Park in Shanghai, which opened in 2012. These investmentfigures clearly illustrate our commitment andlong-term aim of expanding the company worldwide inthe area of animal health.In the 2012 financial year, Boehringer Ingelheim obtainedEuropean market approval for administration of theporcine vaccines ingelvac circoflex® and ingelvacmycoflex® using the FLEXcombo® method. This makesit possible to vaccinate pigs simultaneously against porcinecircovirus (PCV) type 2 and Mycoplasma hyopneu-26Boehringer Ingelheim annual report 2012

usiness year 2012group management reportmoniae, an infectious disease caused by mycoplasmas,with a single injection.Our product metacam® for pain relief when dehorningcalves was also approved throughout Europe in 2012.This decision was based on a study by Ontario VeterinaryCollege at the University of Guelph in Canada, whichanalysed the effect of metacam® on the stress parameters,pain sensitivity and behaviour of calves. The investigationsshowed that calves’ cortisol levels were reducedand they had a significantly lower heartbeat and respiratoryrate after dehorning. metacam® is a non-steroidalanti-inflammatory drug in the oxicam group. The productwas first used for cattle in 1998 and is now approvedin over 40 countries.R&D CooperationsAt the start of 2012, Boehringer Ingelheim, GWT andthe Medical Faculty of the Technical University of Dresden,Germany, signed a five-year research agreement.This cooperation is aimed at obtaining new findings onthe causes of diabetes and the link between raised glucoselevels and the severe complications associated withthe disease. In addition, a four-year cooperation withthe Institute of Molecular Health Sciences and the Instituteof Food, Nutrition and Health of the Swiss FederalInstitute of Technology in Zurich has been entered intoin order to obtain new findings on the development ofdiabetes and obesity. The joint work is focused on examiningthree cell types that could contribute to the onsetof diabetes due to their key role in metabolic homeostasis.In mid-2012, an agreement was reached with FunxionalTherapeutics in which Boehringer Ingelheim acquiredthe global rights to the substance FX125L andthe somatotaxin range. FX125L is a molecule for treatingseveral inflammatory diseases. Its effect has alreadybeen examined in a phase II study. With the agreement,Boehringer Ingelheim has taken over the further research,development and marketing of the substanceFX125L. Furthermore, a cooperation agreement has beenconcluded with the US company Healthrageous, Inc..Boehringer Ingelheim and Healthrageous, Inc., a digitalhealth management company, are working on an innovativebusiness model and, in a pilot study, will be jointlyexamining a lifestyle-changing programme aimed at improvingthe health of patients with type 2 diabetes.The organisation TransCelerate BioPharma, Inc. was alsoestablished by Boehringer Ingelheim and nine otherleading biopharmaceutical companies in the 2012 financialyear. The objective of this joint venture is to meet thechallenges in drug development together and to improvethe quality of clinical studies in order to provide patientswith new medications more quickly.ProductionHuman PharmaceuticalsThe Human Pharmaceuticals production network comprised20 sites in 13 countries in 2012. Spread over theseproduction sites, Boehringer Ingelheim operates 12 pharmaceuticalunits, five chemical units, three biopharmaceuticalunits and one production unit for medical productsworldwide. Our many years of experience at theseproduction sites guarantee a reliable and high-qualityproduct supply using state-of-the-art technology. Ourproduction division is therefore a reliable partner bothfor internal group customers and external industrialcustomers.The chemical and pharmaceutical production sites forproduct launches are grouped together in the Launch &Strategic Products (LSP) division, which forms an interfacebetween our development activities and series production.The division ensures adherence to our high qualityrequirements for new product launches as well as thetechnologically and procedurally challenging manufactureof these innovative products during the first years oftheir life cycle. Our Established Products (ESP) divisionis focused on the manufacture of established products inthe advanced stages of their life cycle, and accounts formore than half of our total production volume. A globalpresence in all growth markets allows us maximum flexibilityin our ESP production network, so that we can reactoptimally to local requirements. We can thereforemanufacture not only our proprietary drugs, but alsoBusiness and operating environment 27

products for industrial customers cost-effectively and reliablyto high quality standards at all times.Boehringer Ingelheim undertook several risk and compliancemanagement initiatives in the 2012 financialyear. We are constantly working to improve our processesand to reduce the risks associated with our business. AQuality Risk Management (QRM) system was developedin 2012. In addition to a comprehensive risk analysis ofthe sites, specific processes such as the manufacturing orpacking process are assessed via QRM, thus ensuringtheir quality.The launch of new products for respiratory diseases andincreased sales of established products are leading tohigher demand for Boehringer Ingelheim’s respimat®Soft Mist Inhaler. The company therefore decided in2012 to increase capacity in Dortmund and Ingelheim to44 million packaging units by 2015 with a total investmentof EUR 163 million. The inhalation system is manufacturedby Boehringer Ingelheim microParts GmbH inDortmund and filled with the corresponding pharmaceuticalactive ingredients at the Ingelheim site for globaldistribution. Another example of the strengtheningof our production network is the investment project totallingjust under EUR 10 million at our site in Athens,Greece. At this ESP site, production and packaging capacityis being expanded to enable future production ofproducts in our anti-diabetes product range, for examplejentadueto®.BiopharmaceuticalsIn addition to the manufacture of proprietary products(actilyse®, metalyse®, imukin® and beromun®), thebiopharmaceutical production arm of Boehringer Ingelheimat the sites in the USA (Fremont), Germany (Biberach)and Austria (Vienna) is a globally respected contractmanufacturer for industrial customers. The companycovers the entire biopharmaceutical process chain fromgenetic development of the cell to manufacturing andright through to market launch.In the 2012 financial year, Boehringer Ingelheim enteredinto a strategic production agreement with the biotechnologycompany Molecular Partners AG to support theDARPin® production pipeline, which constitutes a newclass of biological active ingredients and which MolecularPartners AG specialises in researching, developing andmarketing. Furthermore, Boehringer Ingelheim concludeda production agreement with the biopharmaceutical companyApexigen, Inc. for the manufacture of APX005. Thisactive ingredient is a human monoclonal antibody and astrong CD40 agonist for cancer treatment. BoehringerIngelheim signed an agreement with the French companyServier S.A.S. and its partner XOMA Corporation on thecontract manufacturing of gevokizumab, which is currentlyin clinical phase III and is to be produced in Biberach infuture. In November 2012, Boehringer Ingelheim acquireda technology licence from BaroFold, Inc. that will be usefulin the development of biopharmaceutical productionprocesses.Animal HealthIn the field of animal health, Boehringer Ingelheimgained a European production site with approximately100 employees in 2012 through the acquisition of a vaccinefactory in the Netherlands (Weesp). In conjunctionwith the European Research Centre in Hanover, this hasput us in a position for further growth in Europe. A jointventure for construction of a production facility for animalvaccines was concluded in China as well. With totalinvestment of more than EUR 55.5 million, the plant willbe built in Taizhou China Medical City, a high-tech parkfor the pharmaceutical industry, and will manufacturevaccines for pigs and poultry for China and other Asianmarkets. This investment emphasises our long-termcommitment in China.Environmental and employee protectionThe observance of social and ecological concerns hasbeen firmly anchored within Boehringer Ingelheim’scorporate philosophy for many years and is of centralimportance in terms of our long-term development as acompany. This importance is reflected in our missionstatement, in which the protection of our employees, our28Boehringer Ingelheim annual report 2012

usiness year 2012group management reportfacilities and the environment, the sustainable use ofnatural resources and the promotion of environmentalawareness are key components.Observing social and ecological concerns is the only wayto ensure that we enjoy sustainable business success. Tothis end, Boehringer Ingelheim has demonstrated itscommitment to responsible action by participating in theResponsible Care® initiative of the World Chemicals Associationsince 1995.Binding standards for environmental protection, healthand occupational safety have been implemented throughoutthe group of companies. These internal guidelines reflectthe respective country-specific legal requirementsand significantly exceed them in many cases. The Environment,Health and Safety (EHS) department is responsiblefor introducing and reviewing the internal environmentaland occupational safety guidelines. Compliancewith our standards and the status of environmental protectionand occupational safety are examined as part ofregular audits in order to allow for the continuous identificationof potential areas of improvement. A total of nineinternal EHS audits were performed throughout the groupin the 2012 financial year. In addition, projects and performanceat individual locations were systematically reviewedon the basis of defined key figures. The interactionbetween these various measures and the fact that they arefirmly established in our business processes serve as thebasis for our high standards in the areas of environmentalprotection, health and occupational safety.One example of the ongoing improvement in the area ofenvironmental protection is the new exhaust air treatmentsystem at the Ingelheim site, with an investmentvolume of more than EUR 8 million, which will supplementand respectively improve the existing exhaust airtreatment system at the Ingelheim production facilities.A new wastewater treatment system with a total investmentvolume of EUR 3.8 million also went operational inItaly in 2012. In several process steps and using state-ofthe-arttechnology, wastewater is pre-treated and posttreatedbiologically, chemically and physically in orderto ensure that it is cleaned to a standard that exceedsthe statutory requirements. In the past financial year,Boehringer Ingelheim also intensified measures for surveyingand renovating old waste deposits around theworld. In Ingelheim, where active ingredients and drugshave been produced for more than 125 years, the companylaunched a comprehensive examination and decontaminationof the ground on and adjacent to the plantpremises, and this will continue in 2013. Technicalprogress and improved information mean that problemsof this nature can now be analysed more efficiently thanwas previously the case. Experts in the fields of geochemistry,environmental toxicology and engineeringwere consulted in implementing the measures.Boehringer Ingelheim has set itself the ambitious targetof cutting its CO 2 emissions by 20% in the period from2010 to 2020. This will be achieved by including potentialenergy savings and reductions in emissions, promotingthe exchange of expertise between the company’slocations and coordinating projects at an internationallevel. After realising significant CO 2 reductions at thesites in Germany and Petersburg, USA, in 2011, last yearsaw measures such as the launch of a project in SantCugat (Spain) involving the extensive installation of energy-savinglighting, which will cut annual CO 2 emissionsby around 150 tonnes.The health and safety of our employees enjoys the highestpriority at Boehringer Ingelheim. This is reflected inour high global safety standards and guidelines as wellas the implementation of our safety culture. An initiative,which was launched in 2010, is aimed at further reducingthe number of accidents at work and was rolledout in Brazil in 2012 in addition to countries, such asGermany, the USA, China and Russia. Management andemployees play an equally important role within the initiative,proactively taking responsibility for their ownsafety and that of their colleagues. With 2.1 accidents permillion hours worked in 2012, we were able to furtherimprove in this respect compared with the previous year.Business and operating environment 29

Employee reportingAs in the previous years, Boehringer Ingelheim’s workforceincreased in the 2012 financial year. The averagenumber of employees for the year was 46,228, up 4.8%on the previous year.Average number of employees by region 2012 2011Americas 15,208 14,300Europe 22,106 21,380Asia, Australasia, Africa (AAA) 8,914 8,41446,228 44,094Boehringer Ingelheim’s employees are an important factorin the successful future development of the company.Accordingly, we are particularly committed to activelydeveloping and supporting our employees in order to ensurethat we are ideally equipped to deal with the challengesahead. As part of a comprehensive qualificationsystem, we place great importance not only on the acquisitionof technical skills, but also on the promotion ofsocial skills.Creating conditions that enable a healthy work-life balanceis one of the keys to corporate success and satisfactionin the workplace. Flexible working hours, part-timeworking and teleworking, nursery places, individual employeesupport and preventive health programmes aremeasures that allow people to strike a balance betweentheir career and their private life. In the past year, thisfamily-friendly HR policy was again recognised by the“berufundfamilie®” initiative of the Hertie Foundation inGermany. Following basic certification in 2005, we successfullycompleted the re-auditing process in June. Inthe USA, the National Business Group on Health presentedBoehringer Ingelheim with the “Best Employersfor Healthy Lifestyles Award” in 2012. These repeatedawards serve to underline the attractiveness of our companyand also motivate our employees to continue tocreate a family-friendly working environment in future.Boehringer Ingelheim has traditionally upheld a strongcommitment to promoting young talent. In Germany, weemployed 672 apprentices in 30 different occupations inthe past financial year. We also help people with disabilitiesto integrate into professional life thanks to the versatilityof the occupations we offer. In 2012, BoehringerIngelheim became the first company in Germany to preparea dedicated plan of action for implementing the UNConvention on the Rights of Persons with Disabilities.As a result, we received a special prize from the Rhineland-PalatinateState Department of Social and YouthServices for the exemplary employment of severelyhandicapped people.Talent management plays an important role within ourcorporate strategy. The aim of the programme is to havethe right employees available in the right place at theright time. This ensures the employability and professionaldevelopment of all employees. Employees withdevelopment potential are identified and specifically preparedfor strategically important positions from an earlystage. This targeted employee development providesBoehringer Ingelheim with a strategic competitive advantagein a rapidly changing and highly competitivebusiness environment and enables it to achieve longtermemployee retention.Boehringer Ingelheim’s remuneration system consists ofa standard basic salary plus variable salary componentsthat vary depending on the success of the company andthe achievement of individual targets by the respectiveemployees. Our attractive remuneration system, whichplaces us in a strong competitive position, is rounded offby extensive voluntary benefits such as our company pensionscheme and preventive health checks. For a numberof years, Boehringer Ingelheim has also offered its seniormanagers a remuneration component linked to the company’slong-term success; this component is geared towardsthe attainment of long-term company targets ratherthan short-term goals.Corporate citizenshipA commitment to society and an awareness of social responsibilityhave been key elements of Boehringer Ingelheim’scorporate culture for more than 125 years. Thislong tradition shows how important the well-being of30Boehringer Ingelheim annual report 2012

usiness year 2012group management reportour patients and employees and their families is to us.This commitment is actively supported and implementedthrough our participation in a large number of projectsaimed at helping people in particular need in the countriesand regions in which we are active as a company.The global partnership “Making More Health” betweenBoehringer Ingelheim and Ashoka, an international nongovernmentalorganisation (NGO), has been a major partof our social commitment since 2011. The aim of theprogramme is to identify and provide three years of supportfor 50 social entrepreneurs whose concepts are furtheringsustainable solutions in the area of health. Theseare people who are looking to make a long-term, positivechange to society and are willing to work energeticallyto achieve this. The company currently supports35 social entrepreneurs in 23 countries around the world.In addition to the financial support provided by the group,Boehringer Ingelheim’s employees actively participate inlocal projects. The participants in the Global ManagementDevelopment Programme (GMDP) even have theopportunity to accompany the activities of a social entrepreneuron-site for a certain time. Sample projects includean improved interpreting service for hearing-impairedpeople in Germany and an innovative approach tohelping people in eastern Africa who are not in regularemployment to obtain access to health insurance.2012 also saw the continuation of the global informationcampaign “1 Mission 1 Million® – Getting to the Heartof Stroke”. Boehringer Ingelheim launched this initiativein 2010 and has since supported 32 projects selected bythe public that are aimed at improving the understandingof atrial fibrillation and the associated risk of stroke,as well as the public perception.In the 2012 financial year, Boehringer Ingelheim enteredinto a partnership with the global online donation portal“ammado”. This platform allows individuals and organisationsto collect donations independently and aroundthe world for their information projects with regard tostroke prevention, for which Boehringer Ingelheim providesfinancial support of up to EUR 2,500 per project.2012 also saw the start of efforts to create a global petitionto support the work of the World Trade Organization,its member states and other health authorities andto help atrial fibrillation to be recognised around theworld as a relevant risk factor for strokes.Boehringer Ingelheim has been an active supporter ofresearch, science and culture for many years. Long-termpartnerships with academic institutions serve to underlinethe group’s systematic focus on research and development.In addition to supporting and sponsoring scientificactivities, the group presents scientists with awards,such as the Boehringer Ingelheim FENS Research Awardfor neuroscience.NET ASSETS, FINANCIALPOSITION AND RESULTSFROM OPERATIONSResults from operationsThe achievement of long-term, sustainable success of thecompany, accompanied by stable profits and solid financing,is the foundation for securing the independence ofthe group of companies and is at the centre of BoehringerIngelheim’s strategic orientation. As in previous years,we based our actions on these principles last year. TheComponents of growth in net sales (as %) 2012 2011 2010 2009 2008Price/quantity/new introductions 6.3 6.3 — 6.2 6.6 9.7Acquisitions and sale of business 0.0 — 0.1 0.2 0.1 — 0.2Currency effect 5.2 — 1.6 4.9 3.0 — 3.6Business and operating environment / Net assets, financial position and results from operations31

positive development of new, innovative products in the2012 financial year allowed us to continue the period ofsustainable growth.We increased sales by 11.5% year-on-year to EUR 14,691million in 2012. The development of foreign exchangerates on the markets and the associated favourable exchangerate effects had a positive effect here (+ 5.2%),leading to a currency corrected growth of 6.3%.The Boehringer Ingelheim group’s activities are dividedinto the three business areas of Human Pharmaceuticals,Biopharmaceuticals and Animal Health. In turn, theHuman Pharmaceuticals business is subdivided into PrescriptionMedicines, Consumer Health Care and IndustrialCustomers. In 2012, our Human Pharmaceuticalsbusiness generated net sales of EUR 13,080 million, correspondingto sales growth of 12.0% compared with theprevious year (7.7% after adjustment for exchange rateeffects) and a share of around 89% in net sales.Prescription MedicinesWith a share of overall sales of around 78%, PrescriptionMedicines is the key pillar of our activities in the HumanPharmaceuticals business area. Net sales increased by13.0% to EUR 11,405 million in 2012 (7.1% after adjustmentfor exchange rate effects).Net sales (in millions of EUR) 2012 2011 Changespiriva® 3,562 3,153 13.0%micardis® 1,623 1,593 1.9%pradaxa® 1,108 629 76.2%combivent® 883 766 15.3%As in previous years, our highest-selling and most importantproduct was spiriva®, which is used to treat chronicobstructive pulmonary disease (COPD). In the reportingperiod, it generated revenues of over EUR 3,562 million,which equates to growth of around 13% compared with2011. In its largest sales market, the USA, sales increasedby a further 18.9% to EUR 1,789 million.Our second-largest product, micardis®, a drug for thetreatment of high blood pressure, also enjoyed positivedevelopment, with sales rising by around 1.9% to EUR1,623 million. Our new oral anticoagulant pradaxa® isthe fastest-growing product in our portfolio. In the reportingperiod, it generated revenues in excess of EUR1 billion for the first time (EUR 1,108 million), correspondingto year-on-year growth of 76.2%.Regional development of our Prescription Medicinesbusiness was varied. For the first time in two years, salesrose year-on-year in all regions, with the Americas andAsia/Australasia/Africa (AAA) regions posting strongdouble-digit growth, while Europe recorded a mid-single-digitincrease.In the Americas, Boehringer Ingelheim’s largest sales regionfor prescription medicines, sales amounted to EUR5,556 million in the past financial year (+15.0% comparedto previous year). This growth was driven in particularby the USA, which recorded the highest sales, with revenuesup 16.8% year-on-year to EUR 4,645 million.The AAA region achieved encouraging sales growth of18.3% to EUR 2,815 million. In Japan, the most importantAAA market for Boehringer Ingelheim, revenuesrose by 17.0% compared with 2011 to EUR 1,752 million.We expanded our business in the growing Chinesemarket by around 46.2% to sales of EUR 285 million.At EUR 2,822 million, sales in the Europe region wereup 5.7% on the previous year. Germany (+ 8.5%) and theUnited Kingdom (+ 9.3%), the most important countriesfor our Prescription Medicines business, posted encouragingincreases in revenue to EUR 578 million and EUR337 million respectively despite a challenging marketenvironment due to high cost pressure in the healthcaresystems. In the growth market of Russia, we increasedour revenues by 39.4% to EUR 188 million.32Boehringer Ingelheim annual report 2012

usiness year 2012group management reportNet sales by region(in millions of EUR) 2012 2011 ChangeAmericas 5,556 4,831 15.0%Europe 2,822 2,671 5.7%Asia, Australasia, Africa (AAA) 2,815 2,380 18.3%Consumer Health CareOur business with non-prescription drugs also developedpositively last year. With an encouraging 7.8% increaseon the previous year (4.7% after adjustment forexchange rate effects), sales of EUR 1,505 million weregenerated in 2012.buscopan®, dulcolax®, mucosolvan® and pharmaton®were again our best-selling non-prescription productsin the last financial year, with revenues of more thanEUR 100 million each. buscopan® again posted thehighest revenues (EUR 212 million) and the highest growthrate (+ 17.8%) compared with the previous year. In addition,our products bisolvon® and zantac® broke theEUR 100 million sales barrier for the first time in 2012.Net sales (in millions of EUR) 2012 2011 Changebuscopan® 212 180 17.8%dulcolax® 193 171 12.9%mucosolvan® 166 160 3.8%pharmaton® 136 137 — 0.7%In regional terms, the Europe region accounted for thehighest proportion of total sales in the Consumer HealthCare business at EUR 557 million (+ 3.2% compared with2011). Germany, which is the most important sales marketin Europe, enjoyed a solid 3.7% increase in sales toEUR 139 million. The highest growth rate in the 2012financial year was in the AAA region, where sales increasedby 14.1% to EUR 486 million, and the Americaswas the second strongest region in the Consumer HealthCare business. The positive development of this region isdominated by the key Japanese market, where we achievedsales of EUR 294 million (+ 7.3%). In the Americas region,sales were up 7.4% to EUR 462 million, mainly driven bysales growing by 11.6% to EUR 162 million in the mostimportant market, the USA, as well as high growth ratesin some South American countries.Industrial CustomersThe Industrial Customer business encompasses our thirdpartybusiness in the field of Pharmaceutical Productionand our contract manufacturing business for PharmaChemicals. The biopharmaceuticals contract manufacturingbusiness, allocated to the Industrial Customerssegment until 2011, was integrated into the new Biopharmaceuticalsbusiness unit at the start of 2012.With revenues of EUR 162 million, the Industrial Customerbusiness continued to decline in a challenging marketenvironment (– 9.0% compared with the previous year).BiopharmaceuticalsSince the last financial year, Boehringer Ingelheim’s operatingactivities have been divided into Human Pharmaceuticals,Biopharmaceuticals and Animal Health.The new Biopharmaceuticals business unit consists ofthe contract manufacturing business, biosimilars and researchand development of new biological active ingredients.The contract manufacturing business has beengiven its own identity with the brand name BoehringerIngelheim BioXcellence. Revenues were only generatedfrom the contract manufacturing business in 2012. TheBiopharmaceuticals business posted annual sales ofEUR 549 million, an increase of 5.8%.Animal HealthIn its worldwide business with animal health products,Boehringer Ingelheim significantly increased its revenuesagain last year. With growth of 8.8% comparedwith 2011 (3.8% after adjustment for exchange rate effects),we broke the EUR 1 billion sales barrier for thefirst time here (EUR 1,062 million). Porcine vaccineswere again the most important growth driver, performingstrongly in this highly contested market. The bestsellingand fastest-growing product, ingelvac circoflex®,generated revenues of EUR 279 million, up 8.6% on 2011.In addition to success in the livestock business, ourproducts in the companion animal segment also devel-Net assets, financial position and results from operations33

oped positively. The most important product in this area,metacam® for small animals, maintained its strong position,despite competition from generic drugs, attainingrevenues of EUR 72 million with sales growth of 5.9%.Overall, we strengthened and extended our position asone of the top companies in the animal health sector lastyear. With a market share of 6.0%, Boehringer Ingelheimis ranked 6th among companies in this market segment,according to the provisional figures of the market researchers.Net sales (in millions of EUR) 2012 2011 Changeingelvac circoflex® 279 257 8.6%metacam® 99 96 3.1%ingelvac® prrs 68 57 19.3%vetmedin® 49 46 6.5%This is also borne out by an assessment of the sales developmentin the regions. The encouraging growth of justunder 21% in the AAA region underlines the innovativestrength and future potential of the Animal Health business.This region has the highest growth rate, and generatedsales of EUR 215 million in the last financial year,with notable contributions from Japan and the emergingmarket of China. The Americas region increased itsrevenues by 7.1% to EUR 511 million, mainly as a resultof 10% sales growth in the USA. While sales in Germanystagnated at the high previous year’s level of EUR 91 million,revenues in Europe as a whole were up 4.4% toEUR 329 million.The 2012 financial year saw the opening of the Europeanresearch centre for animal vaccines in Hanover, BoehringerIngelheim’s fourth German site. The Boehringer IngelheimVeterinary Research Centre (BIVRC) develops innovativevaccines. Another major step in the long-termexpansion of our Animal Health segment was the constructionof our first Asian research and developmentcentre for veterinary medicine at the Zhangjiang High-Tech Park in Shanghai, China.Expenditure and incomeIn the 2012 financial year, Boehringer Ingelheim’s operatingexpenses rose to EUR 14,367 million, a change of+ 17.2% year-on-year. At EUR 1,878 million, materialexpenses were up 11.9% on the previous year (EUR1,679 million). As a result of the increase in sales, thematerial costs as a share of total sales remained unchangedat 12.8%. Personnel costs amounted to EUR 4,024 million(+ 9.8%). Consequently, the personnel expensesshare was 27.4%, down slightly on the previous year.Amortisation rose by EUR 260 million (+ 40.8%) toEUR 897 million. Other operating expenses increased by20.6% year-on-year to EUR 7,568 million. Among otherthings, this cost block includes commission and licencepayments, which are dependent on sales. As expected, atEUR 1,853 million, operating income was down on theprevious year (EUR 2,272 million), also due to the situationat our US subsidiary Ben Venue Laboratories, Inc. aswell as initiated cost-reduction measures, as was the returnon net sales of 12.6% (2011: 17.3%).In the reporting period, the financial result totalledEUR – 117 million, up EUR 81 million on the previousyear. This was largely attributable to higher income fromplan assets for pensions and similar obligations as a resultof positive market developments.Income before taxes developed in line with the resultfrom operating activities, falling to EUR 1,739 million.Tax expenses amounted to EUR 502 million. Here, it mustbe taken into consideration that, under the provisions ofGerman commercial law, shareholders’ personal taxesarising from group business activities may not be recognisedin tax expenses. Instead, these taxes are presentedas part of withdrawals from group equity. Taking this extraordinaryeffect into account, the actual tax ratio ismarkedly higher than the figure shown in the profit andloss statement.In the 2012 financial year, the net income of the BoehringerIngelheim Group totalled EUR 1,237 million,34Boehringer Ingelheim annual report 2012

usiness year 2012group management reportdown from EUR 1,476 million in the previous year(– 16.2%).Financial positionBoehringer Ingelheim’s financial management instrumentsand methods are aimed at securing liquidity, limitingfinancial and economic risks and optimising thecost of capital through a suitable capital structure. Ourfinancial activities are therefore geared towards supportingthe company’s business strategy.As a result of Boehringer Ingelheim’s international orientation,developments on the foreign exchange ratemarkets have a considerable impact on the measure ofthe company’s success. The importance of our US businessand the associated supply relationships means thatthe exchange rate development of the US dollar constitutesthe greatest individual risk. Within the frameworkof group-wide financial reporting, foreign exchange riskis calculated and hedged through derivative financial instruments.The nature and scope of these measures areset out in our group guidelines and are regularly discussedand decided upon by the relevant committee in a standardisedprocess.From a strategic viewpoint, investments are of great importanceto Boehringer Ingelheim. Continuous investmentis a requirement for the long-term development of ourbusiness areas and forms the basis for profitable growth.In total, EUR 642 million was invested in tangible andintangible assets in the year under review. To meet growthin demand for the respimat® Soft Mist Inhaler, the companyhas resolved to increase capacity at the Dortmundand Ingelheim sites to 44 million packaging units by2015 with total investment of around EUR 170 million.The inhalation system is manufactured by BoehringerIngelheim microParts GmbH in Dortmund, Germanyand filled with the corresponding pharmaceutical activeingredients at the Ingelheim site for global distribution.Boehringer Ingelheim is also continuing to invest in expandingproduction capacity in China in order to meetrising demand on the Chinese market. Our in-house researchand development will also remain a top priorityin future. To this end, pilot facilities for the productionof newly developed pharmaceutical active ingredientsare to be constructed at the research sites in Biberach,Germany and Ridgefield, USA. The European researchcentre for animal vaccines in Hanover, Germany wasopened in the 2012 financial year.Cash flow stood at EUR 2,225 million in 2012. This constitutesa 6.4% decrease compared with 2011. Due to thelower income for the period under review compared withthe previous year, cash flow from operating activities fellby EUR 400 million to EUR 2,170 million. Despite thisdecrease, as in previous years, investments were financedentirely through funds generated by the company itself.A total of EUR 562 million was invested in tangible assetsand EUR 79 million in intangible assets. Cash flow frominvesting and financing activities exceeded cash flow fromoperating activities and resulted in reduced securities andliquid funds at year-end of EUR 6,467 million.In summary, it can be emphasised that with the existingliquidity, the financial structure and the high cash flowfrom operating activities, all the prerequisites for the stablecontinuation of our business activities and the successfulimplementation of our strategy are still fulfilled.Net assetsIn the 2012 financial year, Boehringer Ingelheim’s totalassets amounted to EUR 17,290 million, a decrease ofEUR 1,368 million or 7.3% compared with the previousyear. Tangible and intangible assets totalled EUR 3,785 millionand were fully covered by consolidated equity.At the end of the financial year, financial assets reacheda figure of EUR 4,222 million and were EUR 269 millionhigher than in the previous year. Inventories increased by4.9% to stocks of EUR 2,095 million. Trade accounts receivablerose by just EUR 10 million to EUR 2,541 millionin 2012. Liquid funds, including non-fixed securities,stood at EUR 2,374 million (2011: EUR 3,903 million).Due to the above-mentioned changes in cash and cashequivalents, group equity amounted to EUR 6,178 million.Net assets, financial position and results from operations 35

In the long term, in addition to the equity, the pensionprovisions and long-term liabilities are also available tothe group. These three items totalled EUR 10,173 millionin 2012, equivalent to 58.8% of total assets. Consequently,long-term disposable capital covers all intangibleand tangible assets, inventories and trade accountsreceivable.While other provisions were up 5.2% year-on-year atEUR 3,330 million, liabilities were reduced by 12.0% toEUR 2,887 million last year, primarily as a result of decreasedliabilities due to banks.The balance sheet and the respective balance sheet ratiosround off the positive picture already shown in the financialposition and results from operations. A combinedevaluation of the net assets, financial position and resultsfrom operations shows that Boehringer Ingelheim is asoundly financed and profitable company.REPORT ON POST-BALANCESHEET DATE EVENTSSince the end of the 2012 financial year, we have notbecome aware of any events that are of material significanceto the group of companies, or could lead to a reappraisalof its assets, financial or earning position.RISK REPORTThe aim of the risk management system implemented atBoehringer Ingelheim is to identify business-specificrisks and, in particular, risks that jeopardise the continuedexistence of the company as early as possible, to assessthem and to reduce them to a reasonable level bymeans of suitable measures. When assessing the risks inthe context of holistic risk management, we also endeavourto take into account the resulting opportunities andincorporate them into the analysis.Boehringer Ingelheim uses an established risk managementsystem that has proved itself over the last few yearsand that was not modified in the 2012 financial year.The persons responsible for the key business areas andfunctions are included in the process of calculating andassessing risks. The group-wide risk and informationsystem ensures that all identified risks are analysed andassessed carefully. Following appropriate classification,adequate countermeasures are initiated and their implementationis consistently monitored.In the year under review, Internal Auditing performedtargeted routine audits as well as extraordinary auditsaround the world. In addition to adherence to legal requirementsand internal group guidelines, the main focalpoints were the functionality of systems, the effectivenessof internal controls for the prevention of lossof assets, and the efficiency of structures and processes.Corresponding adjustments or optimisations were initiatedas necessary. An audit plan approved by the Boardof Managing Directors was largely followed.The global orientation of our business activities resultsin currency risks due to exchange rate volatility. Thegroup monitors these risks at regular intervals and limitsthem by means of corresponding hedging strategies andappropriate financial instruments, such as forward exchangecontracts. From the portfolio of trade accountsreceivable and trade accounts payable, we did not identifyany extraordinary risks beyond the usual level in thesector for the group. The same applies to possible defaultrisks for receivables, which are largely hedged againsteconomic and political risks. We will continue to carefullytrack macroeconomic and industry-specific risks inorder to allow us to respond to negative changes in atimely manner.The group pursues a conservative investment strategy inthe management of its financial assets. This is reflectedin the defensive orientation of its portfolio, which is focusedon European Economic and Monetary Union36Boehringer Ingelheim annual report 2012

usiness year 2012group management report(EMU) government bonds with top credit ratings andshort-term investments at selected banks.Boehringer Ingelheim is exposed to risks arising fromlegal disputes and proceedings as well as official investigations.As the legal or administrative decisions in ongoingor future proceedings cannot be predicted, wehave made appropriate provisions for the resultant riskswhere appropriate.Protection of innovations through trademark, brand andpatent rights is of particular importance to BoehringerIngelheim as a research company. These commercialprotective rights are increasingly the target of attacksand breaches. We have taken the necessary precautionsto allow us to detect threats at an early stage and, bycommencing appropriate countermeasures, defend ourlegal position using all legal means available to us whereapplicable.Risks in the area of Environment, Health and Safety areminimised preventively by adherence to our own extremelyhigh safety standards. Appropriate emergencyplans have been drawn up for possible incidents of anykind and are practised and subjected to comprehensivequality testing at regular intervals. To provide protectionagainst the financial impact of potential damage or lossevents and liability risks, Boehringer Ingelheim has concludedappropriate insurance coverage for the company’srisk profile. The scope and amount of this coverage areregularly monitored.There are currently no indications of any risks above andbeyond this that could jeopardise the continued existenceof the Boehringer Ingelheim group.REPORT ON EXPECTEDDEVELOPMENTSOur satisfactory business performance in the 2012 financialyear confirmed our long-term orientation. The measurestaken to reduce costs and enhance efficiency haveprovided us with a strong starting point for the comingyears.Following the transitional year of 2010 with the expiryof exclusivity protection for our blockbuster productsflomax® and mirapex® in the USA – something we hadbeen aware of for some time and planned for – and theimpact on operating income from the extensive investmentsin R&D and marketing for the planned new productlaunches, we successfully continued the new periodof organic growth initiated in the 2011 financial year in2012 as well.In addition to the further growing blockbusters spiriva®and micardis®, this upturn was driven by the launch ofour innovative oral anticoagulant pradaxa® (dabigatranetexilate) for the indication of stroke prevention in patientswith atrial fibrillation, which exceeded the salesmarker of EUR 1 billion for the first time in the past financialyear.Boehringer Ingelheim is also exposed to business risksspecific to the pharmaceutical industry. In addition tothe loss of exclusivity of products established on themarket and risks associated with the development andregistration of new products, these risks increasingly includechanging and restrictive requirements relating topricing and reimbursement on many sales markets. Frequently,the prices of pharmaceutical products are subjectnot only to state monitoring and regulation, but alsoto price pressure from cheaper generic drugs caused bythe state reimbursement systems.trajenta® (active ingredient linagliptin) for the treatmentof type 2 diabetes also offers significant sales potential.trajenta® is being marketed as part of a strategic alliancebetween Boehringer Ingelheim and Eli Lilly. Thelong-term collaboration for the joint development andmarketing of diabetes active ingredients also comprisesother active ingredients that will be ready for market inthe next few years.In the Biopharmaceuticals business, we have manyyears of expertise in the development and production ofReport on post-balance sheet date events / Risk report / Report on expected developments 37

iological medicines. This gives us a good basis for thedevelopment, production and marketing of biosimilars,a line of business that we entered into for the first timein 2012.Our well-filled product pipeline with promising studyoutcomes for products under development, as well assignificant sales potential, justifies our high investmentsin R&D.We will continue the comprehensive renovation and requalificationat our US subsidiary Ben Venue Laboratories,Inc. after the temporary suspension of production,and are confident of being able to solve the regulatoryproblems without a negative long-term impact on ourbusiness.We increased R&D expenses once again in 2012, therebyunderlining our strategic approach of driving growthand product supply primarily through products fromour own research and development. Here we are investingwith good judgegment and after intensive investigationof the therapeutic benefit and the associated prospectsfor success.We are convinced that our established product portfolioand the successful launch of new products will help usto strengthen and expand our position on the globalpharmaceutical market. We are anticipating a mediumsingle-digit increase in sales as against the year underreview in 2013. As this positive trend will be continuedwith further planned product launches, we are also confidentthat we will be able to further improve our salesyear-on-year in 2014.We increased R&D expenses once again in 2012, therebyunderlining our strategic approach of driving growth andproduct supply primarily through products from our ownresearch and development. We are confident that thissustainably generated organic growth will secure the basisfor our long-term success.The major challenges facing the research-driven pharmaceuticalindustry, besides patent expiry and patent infringement,are growing investments in the R&D areaand greater obstacles and raised expenditure in productregistration. One particular factor is the intensificationof cost pressure in healthcare systems, which are increasinglyunwilling to reward the high level of investmentin new drugs to an appropriate extent. Legislativeintervention in the pricing of prescription drugs is havinga negative impact on various markets.Boehringer Ingelheim will tackle these challenges in thecoming years. We are confident that we will successfullyovercome them and achieve our ambitious targets withgreat innovative strength based on a well-filled pipelineand the support of our highly qualified and motivatedemployees, who are a key factor in our success. BoehringerIngelheim’s declared aim remains to continue to developthe company competitively and successfully as an independent,family-owned enterprise. For us, long-term andsustainable organic growth still takes precedence overshort-term profit targets. We will also continue to standby our vision “Value through Innovation”, researchingand developing innovations that offer medical benefitsand bringing them to the market with the aim of providingpatients with the best treatments possible.38Boehringer Ingelheim annual report 2012

usiness year 2012consolidated financial statements2012CONSOLIDATED FINANCIALSTATEMENTScontents40 OVERVIEW OF THE MAJOR CONSOLIDATED COMPANIES42 CONSOLIDATED BALANCE SHEET43 CONSOLIDATED PROFIT AND LOSS STATEMENT44 CASH FLOW STATEMENT45 STATEMENT OF CHANGES IN GROUP EQUITY46 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS66 AUDITOR’S REPORTConsolidated Financial Statements39

OVERVIEW OF THE MAJOR CONSOLIDATED COMPANIESC. H. Boehringer Sohn AG & Co. KG*Boehringer Ingelheim GmbHBoehringer IngelheimEurope GmbHBoehringer IngelheimInternational GmbHgermany D P Raustria D P RaustriaRBoehringer IngelheimPharma GmbH & Co. KG,IngelheimBoehringer IngelheimVetmedica GmbH, IngelheimBoehringer IngelheimmicroParts GmbH, DortmundBoehringer IngelheimBiopharmaceuticals GmbH,IngelheimBoehringer Ingelheim RCVGmbH & Co. KG, ViennaBoehringer IngelheimPharma Ges.m.b.H., Viennaczech republicBoehringer Ingelheim s.r.o.,PraguefinlandBoehringer IngelheimFinland Ky, EspoonorwayBoehringer IngelheimNorway KS, AskerpolandBoehringer Ingelheim Sp.zo.o.,WarsawDDDDForschungsinstitut für MolekularePathologie Gesellschaft mbH,ViennabelgiumDSCS Boehringer IngelheimComm. V., Brusselschina D PBoehringer IngelheimInternational Trading (Shanghai)Co. Ltd., ShanghaiBoehringer Ingelheim ShanghaiPharmaceuticals Co. Ltd.,ShanghaiphilippinesDBoehringer Ingelheim(Phil.), Inc., Manilasouth koreaDBoehringer IngelheimKorea Ltd., SeoulBoehringer Ingelheim VetmedicaKorea Ltd., SeoulD DistributionP ProductionR Research and Development* Sole, personally liable, managing shareholder:Boehringer AG40Boehringer Ingelheim annual report 2012

usiness year 2012consolidated financial statementsC. H. Boehringer Sohn Grundstücksverwaltung GmbH & Co. KGBoehringer IngelheimAuslandsbeteiligungs GmbHargentina D Rgreece D Pnew zealandDturkeyDBoehringer Ingelheim S.A.,Buenos AiresBoehringer Ingelheim Ellas AE,AthensBoehringer Ingelheim(N.Z.) Ltd., AucklandBoehringer Ingelheim IlacTicaret A.S., IstanbulaustraliaDindonesia D PportugalDunited kingdomDBoehringer Ingelheim Pty. Ltd.,North Rydebrazil D PBoehringer Ingelheim do BrasilQuimica e Farmaceutica Ltda.,São PauloSolana Agro Pecuaria Ltda.,Arapongascanada D RBoehringer Ingelheim(Canada) Ltd., BurlingtonchileBoehringer Ingelheim Ltda.,Santiago de ChileDcolumbia D PBoehringer Ingelheim S.A.,Bogotádenmark D PBoehringer IngelheimDanmark A/S, CopenhagenecuadorDBoehringer Ingelheim delEcuadorCia. Ltda., Quitofrance D PPT Boehringer IngelheimIndonesia, Jakartaitaly D P RBoehringer IngelheimItalia S.p.A., ReggelloBidachem S.p.A.,Fornovo S. GiovanniBoehringer Ingelheim ResearchItalia S.a.S., Milanjapan D P RNippon Boehringer IngelheimCo. Ltd., TokyoSSP Co. Ltd., TokyoBoehringer IngelheimVetmedica Japan Co. Ltd.,TokyoBoehringer IngelheimSeiyaku Co. Ltd., YamagataBoehringer IngelheimJapan, Inc., Tokyomexico D P RBoehringer IngelheimPromeco S.A. de C.V.,Mexico CityBoehringer Ingelheim Vetmedica,S.A. de C.V., Guadalajarathe netherlands D PBoehringer Ingelheim Lda.,LisbonUnilfarma Lda., Lisbonsouth africaDBoehringer Ingelheim (Pty.) Ltd.,RandburgIngelheim Pharmaceuticals (Pty.)Ltd., Randburgspain D PBoehringer IngelheimEspaña S.A., BarcelonaBoehringer Ingelheim S.A.,BarcelonaEuropharma S.A., BarcelonaLaboratorios Fher S.A., BarcelonaswedenDBoehringer Ingelheim AB,StockholmswitzerlandDBoehringer Ingelheim(Schweiz) GmbH, BaselPharmaton S.A., LuganotaiwanBoehringer IngelheimTaiwan Ltd., TaipeiDBoehringer Ingelheim Ltd.,Bracknellusa D P RBoehringer Ingelheim Corp.,Ridgefield, ConnecticutBoehringer IngelheimPharmaceuticals, Inc.,Ridgefield, ConnecticutBoehringer IngelheimUSA Corporation,Ridgefield, ConnecticutBen Venue Laboratories, Inc.,Bedford, OhioRoxane Laboratories, Inc.,Columbus, OhioBoehringer IngelheimVetmedica, Inc.,St. Joseph, MissouriBoehringer IngelheimRoxane, Inc., Columbus, OhioBoehringer IngelheimChemicals, Inc.,Petersburg, VirginiaBoehringer IngelheimFremont, Inc.,Fremont, CaliforniavenezuelaBoehringer Ingelheim C.A.,CaracasDBoehringer IngelheimFrance S.A.S., ParisLabso Chimie Fine S.A.R.L.,BlanquefortBoehringer Ingelheim B.V.,AlkmaarBoehringer IngelheimAnimal Health Operations B.V.,AlkmaarthailandBoehringer Ingelheim(Thai) Ltd., BangkokDOverview of the major consolidated companies 41

C. H. Boehringer Sohn AG & Co. KG, IngelheimCONSOLIDATED BALANCE SHEETAssets (in millions of EUR) Notes 1) 31.12.2012 31.12.2011Intangible assets (3.1) 682 710Tangible assets (3.2) 3,103 3,442Financial assets (3.3) 4,222 3,953Fixed assets 8,007 8,105Inventories (3.4) 2,095 1,998Accounts receivable and other assets (3.5) 3,197 3,126Securities 468 1,932Cash and cash equivalents 1,906 1,971Current assets 7,666 9,027Deferred charges and prepaid expenses 74 69Deferred taxes 1,543 1,457Total assets 17,290 18,658Liabilities and equity (in millions of EUR) Notes 1) 31.12.2012 31.12.2011Shareholders‘ capital 178 178Group reserves 4,764 5,806Balance sheet currency conversion difference — 1 6Net income 1,237 1,476Group equity 6,178 7,466Negative difference from acquisition of companies 134 157Provisions (3.6) 7,462 7,128Accounts payable (3.7) 2,887 3,280Liabilities 10,349 10,408Deferred charges 342 353Deferred taxes 287 274Total liabilities and equity 17,290 18,6581)For explanation, see relevant section in the Notes to the consolidated financial statements.42Boehringer Ingelheim annual report 2012

usiness year 2012consolidated financial statementsC. H. Boehringer Sohn AG & Co. KG, IngelheimCONSOLIDATED PROFIT AND LOSS STATEMENT(in millions of EUR) Notes 1) 2012 2011Net sales (4.1) 14,691 13,171Changes in inventories — 46 — 101Other internal work performed and capitalised 3 4Other operating income (4.2) 1,572 1,454Total revenues 16,220 14,528Material costs (4.3) — 1,878 — 1,679Personnel costs (4.4) — 4,024 — 3,664Amortisation of intangible and depreciation of tangible assets (4.5) — 897 — 637Other operating expenses (4.6) — 7,568 — 6,276Operating income 1,853 2,272Financial income (4.7) — 117 — 198Holding income (4.8) 3 — 31Income before taxes 1,739 2,043Taxes 2) (4.9) — 502 — 567Net income (4.10) 1,237 1,4761)For explanation, see relevant section in the Notes to the consolidated financial statements.2)Due to legal requirements the disclosure of the shareholders‘ personal taxes arising from consolidated business activities as tax expenses is notallowed. These taxes are shown as withdrawals from the accrued group capital.Consolidated balance sheet / Consolidated profit and loss statement43

C. H. Boehringer Sohn AG & Co. KG, IngelheimCASH FLOW STATEMENT(in millions of EUR) 2012 2011Income after taxes 1,237 1,476Write-downs/write-ups on fixed assets 1) 866 659Change in provisions for pensions 122 243Cash flow 2,225 2,378Change in other provisions 294 382Other non-cash income and expenses 5 287Loss on disposals of fixed assets 40 20Change in inventories — 125 — 136Change in accounts receivable and other assets not related to investing or financing activities — 259 — 515Change in trade accounts payable and other liabilities not related to investing or financingactivities — 10 154Cash flow from operating activities 2,170 2,570Investments in intangible assets — 79 — 54Investments in property, plant and equipment — 562 — 458Investments in non-current financial assets 1) — 10 — 14Proceeds from disposals of tangible assets 24 17Proceeds from disposals of non-current financial assets 1) 4 7Cash flow from investing activities — 623 — 502Cash receipts from/cash payment to owners and minority shareholders — 2,541 — 498Cash proceeds from borrowings/repayments of loans — 299 32Cash flow from financing activities — 2,840 — 466Change in liquid funds from cash relevant transactions — 1,293 1,602Changes in liquid funds due to exchange rate movements 49 — 4Financial funds 2) as of 1.1. 7,711 6,113Financial funds 2) as of 31.12. 6,467 7,7111)Excluding fixed-asset securities2)Liquid funds, securities within fixed and current assets(+) = source of funds, (-) = use of funds44Boehringer Ingelheim annual report 2012

usiness year 2012consolidated financial statementsC. H. Boehringer Sohn AG & Co. KG, IngelheimSTATEMENT OF CHANGES IN GROUP EQUITY(in millions of EUR)Shareholders’capital 1)AccruedgroupcapitalthereofcurrencyeffectsEquityMinorityintereststhereofcurrencyeffectsGroup equityBalance as of 31.12.2010 178 6,296 — 5 6,474 0 0 6,474Withdrawals 0 — 495 0 — 495 0 0 — 495Net income 0 1,476 0 1,476 0 0 1,476Other changes 0 11 11 11 0 0 11Balance as of 31.12.2011 178 7,288 6 7,466 0 0 7,466Withdrawals 0 — 2,518 0 — 2,518 0 0 — 2,518Net income 0 1,237 0 1,237 0 0 1,237Other changes 0 — 7 — 7 — 7 0 0 — 7Balance as of 31.12.2012 178 6,000 — 1 6,178 0 0 6,1781)The shareholders’ capital consists of the equity of C. H. Boehringer Sohn AG & Co. KG and C. H. Boehringer Sohn Grundstücksverwaltung GmbH & Co. KG. As of31.12.2012, the capital consists only of the limited partner’s capital contribution. The shareholders’ personal taxes arising from consolidated business activities areshown as withdrawals from the accrued group capital.Cash flow statement / Statement of changes in group equity45

C. H. Boehringer Sohn AG & Co. KG, IngelheimNOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS 20121 PRINCIPLES AND METHODS1.1 General principlesThe consolidated financial statements of Boehringer Ingelheim for the 2012 financial year were preparedin accordance with section 264a of the Handelsgesetzbuch (HGB – German Commercial Code), in linewith the requirements of group accounting of sections 290 et seq. HGB.In accordance with section 297 paragraph 1 HGB, the consolidated financial statements consist of the consolidatedbalance sheet, the consolidated profit and loss statement, the notes to the consolidated financialstatements, the cash flow statement and the statement of changes in equity.The consolidated financial statements were prepared in euro in accordance with section 298 paragraph 1in conjunction with section 244 HGB.To improve the clarity of the consolidated financial statements, individual items of the consolidated balancesheet and the consolidated profit and loss statement have been combined. These items are presentedand explained separately in the notes. The additional disclosures required for the individual items can alsobe found in the notes.1.2 Information on companies included in consolidationThe parent company of the Boehringer Ingelheim Group is C. H. Boehringer Sohn AG & Co. KG, Ingelheim.Boehringer AG, Ingelheim, is the sole, personally liable, managing shareholder of this company.Besides C. H. Boehringer Sohn AG & Co. KG, there is C. H. Boehringer Sohn Grundstücksverwaltung GmbH& Co. KG, the general partner which is controlled by C. H. Boehringer Sohn AG & Co. KG.The Boehringer Ingelheim Group consists of a total of 140 affiliated companies in Germany and abroad. Inaddition to C. H. Boehringer Sohn AG & Co. KG and C. H. Boehringer Sohn Grundstücksverwaltung GmbH& Co. KG, a further 115 companies in which C. H. Boehringer Sohn AG & Co. KG directly or indirectly holdsthe majority of voting rights have been fully consolidated in the consolidated financial statements.21 companies were not included in consolidation in accordance with section 296 paragraph 2 HGB in the reportingyear, as they are individually and collectively insignificant to the net assets, financial position and resultsof operations of the Group. The total amount of the sales, equity and net income of the companies notincluded in consolidation account for less than 1% of the aggregated group financial statements totals. Thesecompanies were also not classified as associates in accordance with section 311 paragraph 2 HGB on accountof immateriality. There are ongoing restrictions on disposal at two other companies on account of their arti-46Boehringer Ingelheim annual report 2012

usiness year 2012consolidated financial statementscles of association. These were not included in consolidation in accordance with section 296 paragraph 1sentence 1 HGB.The total number of affiliated companies was reduced by five as against the previous year:• Ten companies were sold• Five companies were foundedThe following subsidiaries were exempted from the reporting and disclosure obligations of section 264paragraph 3 HGB:• Boehringer Ingelheim GmbH, Ingelheim• Boehringer Ingelheim Europe GmbH, Ingelheim• Boehringer Ingelheim Vetmedica GmbH, Ingelheim• Boehringer Ingelheim Secura Versicherungsvermittlungs GmbH, Ingelheim• Boehringer Ingelheim Grundstücksgesellschaft mbH, Ingelheim• Boehringer Ingelheim Finanzierungs GmbH, Ingelheim• Boehringer Ingelheim R&D Beteiligungs GmbH, Ingelheim• Boehringer Ingelheim Venture Fund GmbH, IngelheimExempt from the duty to prepare and disclose annual financial statements and management reports in accordancewith HGB provisions for corporations under section 264b HGB are:• C. H. Boehringer Sohn AG & Co. KG, Ingelheim• C. H. Boehringer Sohn Grundstücksverwaltung GmbH & Co. KG, Ingelheim• Boehringer Ingelheim Pharma GmbH & Co. KG, Ingelheim• Boehringer Ingelheim Veterinary Research Center GmbH & Co. KG, Hanover1.3 Consolidation methodsFor inventories and fixed assets, receivables, liabilities and income and expense items, transactions betweenthe companies included in consolidation were eliminated as part of debt consolidation in accordance withsection 303 HGB, the elimination of intercompany profits in accordance with section 304 HGB and theconsolidation of income and expenses in accordance with section 305 HGB.The revaluation method of section 301 HGB was applied in acquisition accounting for the first-time consolidationof subsidiaries. First-time consolidation occurred on the date at which the company became asubsidiary.The carrying amount of the shares held by the parent company was offset against the corresponding equityof the subsidiary. Equity is carried at the amount of the fair value of the assets, liabilities, prepaid expensesand deferred income and special reserves included in the consolidated financial statements as at the timeof consolidation. Any remaining balance after offsetting was capitalized as goodwill.Notes to the consolidated financial statements47

1.4 Currency translationAssets and liabilities resulting from foreign currency transactions were translated using the middle spotexchange rate as at the balance sheet date. The realisation principle (section 298 paragraph 1 in conjunctionwith section 252 paragraph 1 no. 4, 2nd half-sentence HGB) and the historical cost convention (section298 paragraph 1 in conjunction with section 253 paragraph 1 sentence 1 HGB) were complied withfor remaining terms of more than one year.In these consolidated financial statements, the financial statements of foreign subsidiaries domiciled in astate outside the euro zone and denominated in foreign currency have been converted into euro in accordancewith section 308a HGB using the modified closing rate method.Using the modified closing date rate method, the asset, equity and liability items of the annual financialstatements prepared in foreign currency were translated into euro using the middle spot exchange rate as atthe closing date, with the exception of equity, which was translated using the historical rate. The items ofthe profit and loss statement were translated into euro using the average rate. The resulting translation differencewas reported within consolidated equity below the reserves within “Difference in equity fromcurrency translation”. The most important currencies for the Group developed as follows in the reportingyear (basis: EUR 1):Year-end rateAverage annual rate31.12.2012 31.12.2011 2012 2011US dollar 1.32 1.29 1.29 1.39Japanese yen 113.61 100.20 102.62 111.03Pound sterling 0.82 0.84 0.81 0.87Canadian dollar 1.31 1.32 1.28 1.3848Boehringer Ingelheim annual report 2012

usiness year 2012consolidated financial statements2 ACCOUNTING POLICIES2.1 Fixed assetsAcquired intangible assets and tangible assets were carried at cost less straight-line amortisation and depreciationrespectively in line with technical and economic circumstances. This is based on the followinguseful lives:Intangible assetsBuildingsTechnical equipment and machineryOther equipment, operating and office equipment2 to 15 years20 years10 years3 to 10 yearsOnly straight-line depreciation and amortisation is used in the consolidated financial statements. Anticipatedpermanent impairment was shown by extraordinary write-offs. Direct costs of materials and labourcosts, appropriate portions of materials and labour overheads and the depreciation of fixed assets (if causedby production) were taken into account in determining production costs.All capitalised, intangible assets have a limited useful life.Goodwill from the first-time consolidation of shares is usually being amortised over a period of five years.A useful life of ten years was applied to the goodwill for Boehringer Ingelheim Korea Ltd., acquired in2007, as past experience of products, sales markets and the business conditions of Boehringer IngelheimKorea Ltd. has shown that this presents a true and fair view.Financial assets essentially included shareholder rights, securities and loans and are carried at the lower ofcost or fair market value, if impaired.2.2 Current assets and prepaid expensesInventories were carried at the lower of cost and fair market value.Raw materials, consumables and supplies were capitalised at the lower of average acquisition prices or fairmarket value on the balance sheet date.Finished goods and work in progress were measured at production cost on the basis of individual calculations,taking into account the directly attributable costs of materials, direct labour costs, special direct costs,appropriate shares of production and materials overheads and depreciation.Goods for resale are valued at the lower of either purchase cost or fair market value.All identifiable risks in inventory assets arising from above-average storage periods, diminished marketabilityand lower replacement costs were taken into account by appropriate valuation adjustments.Notes to the consolidated financial statements49

Inventories are valued loss-free, i.e. discounts were recognised on the expected sales prices for costs yet tobe incurred.Receivables and other assets were recognised at cost less allowances for specific risks and general creditrisk. Low-interest or non-interest-bearing receivables with a term of more than one year were discounted.Securities classified as current assets include other securities and were recognised at the lower of cost orquoted/market prices on the reporting date.Cash and cash equivalents were recognised at the lower of cost or fair market value.Deferred charges and prepaid expenses in accordance with section 250 paragraph 1 HGB include expensespaid in advance for a certain period after the balance sheet date.Deferred charges in accordance with section 250 paragraph 2 HGB include proceeds, which are income fora certain period after the balance sheet date.2.3 Negative difference from acquisition of companiesThe negative difference from acquisition of companies was recognised as a result of the net assets of a companyacquired as of 31 March 2011 and 1 August 2012 exceeding the purchase price.The value of the negative difference from acquisition of companies amounting to EUR 157 million as of 1 Januarywas increased by the acquisition of a company acquired on 1 August 2012 amounting to EUR 11 million.The release of the negative difference from acquisition of companies of EUR 34 million to EUR 134 million isshown in other operating income. The amount of the release of the negative difference from acquisition ofcompanies is in line with the amortisation of the excess net assets as of the time of acquisition. The periodof amortisation is currently estimated at ten years.2.4 Group reservesGroup reserves include the retained earnings of the consolidated subsidiaries from prior years and consolidationentries that affect earnings related to prior years.2.5 ProvisionsTax provisions and other provisions include all uncertain liabilities and expected losses from executorycontracts. They were carried at the amount required to settle the obligation based on reasonable business judgementin accordance with the prudence principle (i.e. including future cost and price increases). Provisionswith a remaining term of more than one year are discounted using the matched-term, average market interestrate for the last seven years (in accordance with the Rückstellungsabzinsungsverordnung – GermanRegulation on the Discounting of Provisions).50Boehringer Ingelheim annual report 2012

usiness year 2012consolidated financial statements2.6 LiabilitiesLiabilities are recognised at settlement amount.2.7 Deferred taxesTo calculate deferred taxes on temporary or quasi-permanent differences between the accounting carryingamounts of assets, liabilities, prepaid expenses and deferred income and their tax carrying amounts or ontax loss carryforwards, the amounts of the resulting tax benefits and expenses at the time of reversal weremeasured using tax rates specific to the respective consolidated company (10% – 41 %) and not discounted.Differences due to consolidation measures in accordance with sections 300 to 305 HGB were also measuredusing company-specific tax rates at the time of the expected reversal of the difference. Deferred tax assetson loss carryforwards were taken into account, if it is likely that they will be used within the next five years.Deferred tax assets and liabilities were reported without being netted.Notes to the consolidated financial statements51

3 NOTES TO THE CONSOLIDATED BALANCE SHEET3.1 Intangible assets(in millions of EUR)Acquiredconcessions/similar rightsGoodwillAdvancepaymentsTotalProcurement/manufacturing costsBalance as of 1.1.2011 1,334 572 27 1,933Currency conversion difference 30 1 0 31Additions due to first consolidation 0 0 0 0Additions 44 0 10 54Disposals — 15 0 — 1 — 16Reclassifications 26 0 — 22 4Balance as of 31.12.2011 1,419 573 14 2,006Currency conversion difference — 26 0 0 — 26Additions due to first consolidation 0 0 0 0Additions 74 0 5 79Disposals — 10 0 0 — 10Reclassifications 13 0 — 3 10Balance as of 31.12.2012 1,470 573 16 2,059Accumulated depreciationBalance as of 1.1.2011 656 541 0 1,197Currency conversion difference 12 0 0 12Additions due to first consolidation 0 0 0 0Additions 97 5 0 102Write-ups 0 0 0 0Disposals — 15 0 0 — 15Reclassifications 0 0 0 0Balance as of 31.12.2011 750 546 0 1,296Currency conversion difference — 14 0 0 — 14Additions due to first consolidation 0 0 0 0Additions 99 5 0 104Write-ups 0 0 0 0Disposals — 10 0 0 — 10Reclassifications 1 0 0 1Balance as of 31.12.2012 826 551 0 1,377Book value as of 31.12.2011 669 27 14 710Book value as of 31.12.2012 644 22 16 68252Boehringer Ingelheim annual report 2012

usiness year 2012consolidated financial statements3.2 Tangible assetsLand and Technical Other Advance Totalbuildings facilities facilities/ payments/and machines operating construction(in millions of EUR) equipment in progressProcurement/manufacturing costsBalance as of 1.1.2011 2,655 2,782 1,963 509 7,909Currency conversion difference 62 41 22 6 131Additions due to first consolidation 0 8 1 0 9Additions 61 214 137 218 630Disposals — 15 — 60 — 93 — 2 — 170Reclassifications 63 140 30 — 237 — 4Balance as of 31.12.2011 2,826 3,125 2,060 494 8,505Currency conversion difference — 63 — 47 — 25 — 6 — 141Additions due to first consolidation 7 4 1 1 13Additions 57 77 139 277 550Disposals — 182 — 52 — 107 — 12 — 353Reclassifications 135 66 46 — 257 — 10Balance as of 31.12.2012 2,780 3,173 2,114 497 8,564Accumulated depreciationBalance as of 1.1.2011 1,402 1,757 1,436 0 4,595Currency conversion difference 36 21 18 0 75Additions due to first consolidation 0 6 2 0 8Additions 113 235 187 0 535Write-ups — 3 — 6 0 0 — 9Disposals — 13 — 49 — 79 0 — 141Reclassifications 0 0 0 0 0Balance as of 31.12.2011 1,535 1,964 1,564 0 5,063Currency conversion difference — 39 — 38 — 21 0 — 98Additions due to first consolidation 0 0 0 0 0Additions 242 349 202 0 793Write-ups — 2 0 — 3 0 — 5Disposals — 152 — 45 — 94 0 — 291Reclassifications 1 0 — 2 0 — 1Balance as of 31.12.2012 1,585 2,230 1,646 0 5,461Book value as of 31.12.2011 1,291 1,161 496 494 3,442Book value as of 31.12.2012 1,195 943 468 497 3,103Notes to the consolidated financial statements53

3.3 Financial assets(in millions of EUR)Investments Loans Investments Investment Other Totalin affiliated to affiliated in related securities loanscompanies companies companiesProcurement/manufacturing costsBalance as of 1.1.2011 79 7 105 3,007 19 3,217Currency conversion difference 4 0 1 8 0 13Additions due to first consolidation 0 0 0 0 0 0Additions 0 0 8 853 6 867Disposals — 2 — 7 0 — 46 — 5 — 60Reclassifications 0 0 0 0 0 0Balance as of 31.12.2011 81 0 114 3,822 20 4,037Currency conversion difference — 1 0 0 — 4 0 — 5Additions due to first consolidation 0 0 0 0 0 0Additions 0 0 6 329 5 340Disposals — 43 0 0 — 56 — 5 — 104Reclassifications 0 0 0 0 0 0Balance as of 31.12.2012 37 0 120 4,091 20 4,268Accumulated amortisationBalance as of 1.1.2011 0 0 34 12 3 49Currency conversion difference 2 0 0 1 0 3Additions due to first consolidation 0 0 0 0 0 0Additions 18 0 13 2 0 33Write-ups 0 0 0 0 0 0Disposals 0 0 0 — 1 0 — 1Reclassifications 0 0 0 0 0 0Balance as of 31.12.2011 20 0 47 14 3 84Currency conversion difference 0 0 0 0 0 0Additions due to first consolidation 0 0 0 0 0 0Additions 0 0 0 0 0 0Write-ups 0 0 — 2 — 11 0 — 13Disposals — 20 0 0 — 5 0 — 25Reclassifications — 1 0 0 0 1 0Balance as of 31.12.2012 — 1 0 45 — 2 4 46Book value as of 31.12.2011 61 0 67 3,808 17 3,953Book value as of 31.12.2012 38 0 75 4,093 16 4,222As in the previous year, the “Other loans” item does not include any loans to shareholders.54Boehringer Ingelheim annual report 2012

usiness year 2012consolidated financial statements3.4 Inventories(in millions of EUR) 31.12.2012 31.12.2011Raw materials and supplies 484 427Unfinished products 881 872Finished products and goods for resale 725 694Advance payments to suppliers 5 52,095 1,9983.5 Accounts receivable and other assetsResidualResidualterm overterm over(in millions of EUR) 31.12.2012 1 year 31.12.2011 1 yearTrade accounts receivable 2,541 7 2,531 6Receivables from affiliated companies 6 0 12 0Receivables from related companies 23 0 19 0Other assets 627 8 564 123,197 15 3,126 18The “Other assets” item includes receivables from shareholders of EUR 7 million (previous year:EUR 1 million).Receivables from affiliated companies, as in the previous year, almost exclusively consist of receivablesfrom loans.Receivables from related companies essentially consist of trade accounts receivable.3.6 Provisions(in millions of EUR) 31.12.2012 31.12.2011Pension provisions 3,380 3,283Tax provisions 752 679Other provisions 3,330 3,1667,462 7,128Provisions for pensions and similar obligationsThe provisions for pensions and similar obligations were determined on the basis of actuarial calculationsusing the projected unit credit method, taking into account future adjustments in salaries and pensions.Notes to the consolidated financial statements55

In addition to local biometric data (e.g. Prof Heubeck’s 2005 G mortality tables in Germany), pension obligationsin the significant countries were calculated on the basis of the following actuarial parameters:(in % as of 31 December 2012) Germany USA JapanDiscount rate 5.07 5.34 2.03Salary increase 4.0 5.0 5.0Pension increase 2.0 3.0 3.1Provisions for pensions and similar obligations were discounted using the average market interest rate on aremaining term of 15 years in accordance with the German Regulation on the Discounting of Provisions of18 November 2009. The interest rates used to discount significant foreign pension obligations (US, Japan)were determined with comparable parameters, in line with the German Regulation on the Discounting ofProvisions of 18 November 2009.The plan assets intended solely to cover pension and similar obligations that are unavailable to all othercreditors (cover assets within the meaning of section 246 paragraph 2 sentence 2 HGB) were measured atfair market value, which is essentially derived from stock market prices and offset against the underlyingpension and similar obligations. The fair market value of the plan assets on the balance sheet date wasEUR 989 million. The corresponding present value of the pension and similar obligations was EUR 4,369 million.Gains and losses from plan assets and interest expense relating to pension and similar obligationswere offset in accordance with section 246 paragraph 2 sentence 2 HGB. In total, EUR 108 million lossesfrom plan assets and EUR 255 million interest expense relating to pension and similar obligations are includedin the financial income.56Boehringer Ingelheim annual report 2012

usiness year 2012consolidated financial statements3.7 Accounts payable(in millions of EUR)Residual termless than1 year1 – 5yearsover5 years31.12.201231.12.2011Residual termless than1 yearBank loans 218 704 465 1,387 1,719 479Other accounts payable 1,298 52 150 1,500 1,561 1,362of which:- Trade accounts payable 875 2 0 877 900 899- Advance payments 24 11 0 35 43 27- Accounts payableto affiliated companies 25 0 0 25 24 24- Accounts payableto related companies 1 0 0 1 2 2- Other liabilities* 373 39 150 562 592 4101,516 756 615 2,887 3,280 1,841* Of which:- from taxes (EUR million) 83 65- social security liabilities (EUR million) 14 15As in the previous year, there were no liabilities secured by mortgages or similar collateral rights on thebalance sheet date.At the end of the year, there were liabilities to shareholders of EUR 10 million (previous year: EUR 26 million).Payables to affiliated companies consist of payables from loans amounting to EUR 22 million (previous year:EUR 19 million) and trade accounts payable amounting to EUR 3 million (previous year: EUR 5 million).Notes to the consolidated financial statements57

4 NOTES TO THE CONSOLIDATED PROFIT AND LOSSSTATEMENTThe structure of the consolidated profit and loss statement was based on the total cost format.4.1 Net salesby business and business segment (in millions of EUR) 2012 2011Human Pharmaceuticals 13,080 11,676of which: Prescription Medicines 11,405 10,096Consumer Health Care 1,505 1,396Industrial Customers 162 178Other Sales 8 6Biopharmaceuticals 549 519Animal Health 1,062 97614,691 13,171by geographic region (in millions of EUR) 2012 2011Europe 4,194 4,037of which: Germany 1,033 950Americas 6,905 6,087of which: USA 5,550 4,820Asia / Australasia / Africa 3,592 3,047of which: Japan 2,111 1,83114,691 13,1714.2 Other operating incomeOther operating income includes income from currency translation of EUR 446 million (previous year:EUR 546 million).4.3 Material costs(in millions of EUR) 2012 2011Costs of raw material, supplies and goods for resale 1,377 1,231Expenditure on services 501 4481,878 1,67958Boehringer Ingelheim annual report 2012

usiness year 2012consolidated financial statements4.4 Personnel costs(in millions of EUR) 2012 2011Salaries and wages 3,242 2,875Social benefits and retirement benefits 782 789of which: retirement benefits 235 3064,024 3,664All interest effects of the measurement of the provision for pensions and similar obligations were shown asa separate item of the financial income.Average headcount 2012 2011Production 13,727 13,076Administration 5,303 5,217Marketing and sales 18,993 17,945Research and development 7,491 7,159Apprentices 714 69746,228 44,0944.5 Amortisation of intangible assets and depreciation of tangible assetsAmortisation of intangible fixed assets and depreciation of tangible fixed assets include extraordinarywrite-downs of EUR 244 million (previous year: EUR 34 million).4.6 Other operating expensesOther operating expenses include expenses from currency translation of EUR 663 million (previous year:EUR 497 million).Other operating expenses essentially include third-party services in the areas of research, development,medicine and marketing, expenses for cost-reduction initiatives plus administrative expenses, fees andcontributions, commissions, rent, freight and expenses for third-party repairs.4.7 Financial income(in millions of EUR) 2012 2011Interest expense relating to pensions and similar obligations and other provisions — 162 — 247Other interest expense and similar expenditure — 112 — 130Interest expense and similar expenditure — 274 — 377Amortisation of and loss on disposal on financial assets and short-term investments — 3 — 2Income from other investment securities and from long-term loans 133 113Other interest income and similar proceeds 27 68— 117 — 198Notes to the consolidated financial statements59

4.8 Holding income(in millions of EUR) 2012 2011Write-offs on financial assets 0 — 31Income from related companies 3 0of which from affiliated companies 1 03 — 314.9 Taxes(in millions of EUR) 2012 2011Income taxes 602 630Deferred taxes — 100 — 63502 567Current income taxes essentially include the costs of corporation and trade tax for the companies includedin consolidation.As a result of the conclusion of profit transfer agreements, significant German corporations have been includedin the trade and corporation tax group of the parent company C. H. Boehringer Sohn AG & Co. KGsince 1 January 2004. As the income taxes of the shareholders of C. H. Boehringer Sohn AG & Co. KG incurredon operating income cannot be reported in the consolidated profit and loss statement, only thetrade income tax of the companies concerned and other fully consolidated German partnerships is shownas tax expenses.Total deferred tax assets amounted to EUR 1,543 million as of the balance sheet date. Deferred tax assetsessentially relate to the different carrying amounts of provisions, fixed assets and inventories. Deferred taxliabilities were recognised in the amount of EUR 287 million. They mainly relate to the differences in thecarrying amounts of tangible assets, inventories and provisions.4.10 Net incomeThe net income for 2012 was positively influenced by prior-period operating income (essentially from thereversal of other provisions) of EUR 211 million (previous year: EUR 166 million) and negatively influencedby prior-period operating expenses of EUR 148 million (previous year: EUR 99 million).60Boehringer Ingelheim annual report 2012

usiness year 2012consolidated financial statements5 NOTES TO THE CASH FLOW STATEMENTThe cash flow statement shows how the cash and cash equivalents (cash and long-term securities and investmentsclassified as current assets that can be sold at any time) of the Boehringer Ingelheim Groupchanged as a result of cash inflows and outflows in the reporting year. In accordance with German AccountingStandard 2 on the cash flow statement (GAS 2), this has been broken down according to cashflows from operating activities and cash flows from investing and financing activities.The changes in the balance sheet items of the affiliated companies included were translated using averagerates for the year. As in the balance sheet, cash and cash equivalents are carried at the closing rate. Theeffect of exchange rate changes on cash and cash equivalents has been shown separately.In the financial year, EUR 150 million were received from interests; EUR 80 million (previous year: EUR83 million) were paid for interests while EUR 414 million (previous year: EUR 407 million) were paid fortaxes.6 OTHER DISCLOSURES6.1 Contingent liabilities(EUR million) 31.12.2012 31.12.2011Liabilities from guarantees,bills and cheque guarantees, warrantiesand the granting of security for third-party liabilities 27 34The risk of utilisation of the individual contingent liabilities is estimated as follows:The risk of utilisation of guarantees for the liabilities to banks of affiliated companies is rated as low on accountof the solid net assets, financial position and results of operations of the subsidiaries in question.6.2 Other financial commitments(in millions of EUR) 31.12.2012 31.12.2011Rental and leasing obligations 289 320Purchase commitment 765 7681,054 1,088There are obligations from rental and lease agreements of EUR 289 million (previous year: EUR 320 million),EUR 30 million of which (previous year: EUR 34 million) relating to long-term rental agreementswith subsidiaries not included in consolidation.Notes to the consolidated financial statements61

The purpose of the lease agreements is the lower capital commitment compared to buying property and theabsence of the resale risk. Risks could arise from the term of the lease, if it were no longer possible to fullyutilise the properties, of which there are no indications at this time.Other financial commitments include future expenses from follow-up investments, investments alreadyinitiated and future major repairs. As at the balance sheet date, purchase commitments include future cashinvestments of EUR 619 million (previous year: EUR 645 million) in other off-balance sheet transactions.6.3 Derivative financial instruments and hedgesOwing to its extensive international structure, the Boehringer Ingelheim Group is highly dependent on developmentsin the world’s currencies and interest rates. To hedge these risks, particularly those emergingfrom goods, services and financing, currency forwards and options are generally used for currency risksand interest rate swaps and options are used for interest rate risks.The use of derivative financial instruments and the organisational processes are set out in internal guidelines.There is a strict separation of trading, processing, documentation and control.Risk positions are regularly tracked, analysed and measured in a special consolidated financial report. Thepositions entered into are periodically re-evaluated and monitored. The fair market values of the derivativefinancial instruments are calculated using standard market measurement methods (currency and interestforwards using the net present value method, currency and interest options using recognised option pricingmodels) on the basis of the market data available on the balance sheet date.Currency and interest options are recognised at fair market value not exceeding the option premium paidor received. They are derecognised on maturity.Provisions of EUR 17 million were recognised for currency forwards not included in hedge accounting forwhich there was a negative fair market value within a currency as at the balance sheet date. In line withthe imparity principle, positive fair market values within a currency are not recognised.On the balance sheet date, there were the following derivative financial instruments not included in hedgeaccounting:Nominal valueMarket value(in millions of EUR) 31.12.2012 31.12.2011 31.12.2012 31.12.2011Foreign exchange forward contracts 1,232 1,866 10 — 42If the requirements for hedge accounting of foreign exchange forward contracts with highly probable forecastedtransactions in accordance with section 254 HGB are met, the foreign exchange forward contractsare not recognised in the balance sheet in line with the net hedge presentation method.62Boehringer Ingelheim annual report 2012

usiness year 2012consolidated financial statementsThe following accounting policies apply in the recognition of hedges in accordance with 254 HGB:Economic hedges are accounted for by hedge accounting. Hedges are recognised per foreign currency fromthe net amount of highly probable forecasted transactions and currency forwards that match the forecastednet cash flow in terms of maturity, nominal amount and foreign currency (macro hedge). The highlyprobable forecasted transactions (incoming and outgoing payments for planned sales and purchases) arederived from company planning. Ex-post analysis of planning has shown that the planned transactions arehighly probable.As the critical terms (maturity, nominal amount, foreign currency) match, the opposing changes in value ofthe hedged item and the hedging instrument are fully offset. An effective hedge can therefore be assumedboth prospectively and retrospectively. The critical term match method is exclusively used to measure prospectiveand retrospective hedge effectiveness.As of 31 December 2012, hedges for highly probable forecast net cash flows were recognised as follows:January to December 2013:Net cash flow (in millions of EUR)FX forward contracts (in millions of EUR)Nominal value Nominal value Market valueUSD 1,327 USD — 1,004 USD 3JPY 1,030 JPY — 759 JPY 51AUD 172 AUD — 107 AUD 0MXN 91 MXN — 87 MXN — 1CAN 181 CAN — 137 CAN 2GBP 217 GBP — 147 GBP 0January to December 2014:Net cash flow (in millions of EUR)FX forward contracts (in millions of EUR)Nominal value Nominal value Market valueUSD 1,069 USD — 624 USD 5JPY 870 JPY — 566 JPY 47AUD 152 AUD — 60 AUD 0MXN 21 MXN — 18 MXN 0CAN 179 CAN — 92 CAN 1GBP 34 GBP — 28 GBP 0Notes to the consolidated financial statements63

January to December 2015:Net cash flow (in millions of EUR)FX forward contracts (in millions of EUR)Nominal value Nominal value Market valueUSD 1,105 USD — 328 USD 16JPY 899 JPY — 426 JPY 50AUD 30 AUD — 10 AUD 0CAN 27 CAN — 12 CAN 0January to December 2016:Net cash flow (in millions of EUR)FX forward contracts (in millions of EUR)Nominal value Nominal value Market valueUSD 97 USD — 39 USD 4JPY 892 JPY — 327 JPY 34January to May 2017:Net cash flow (in millions of EUR)FX forward contracts (in millions of EUR)Nominal value Nominal value Market valueUSD 376 USD — 243 USD 19The amount of the hedged foreign currency risk correlates to the relative change in the exchange ratebetween the planning date and the realisation date of the forecasted transactions. If all currencies were toappreciate or depreciate against the euro by 10.0%, there would be a foreign currency risk of plus or minusEUR 877 million without hedging.As of the 2012 balance sheet date, there are two floating-rate loans amounting to EUR 290 million. Interestrate swaps with matching amounts and matching maturities were concluded to hedge the interest raterisk associated with this. As this only involves transforming the floating-rate loan portions into a fixedinterest rate, use is made of hedge accounting (micro hedges). The opposing changes in value of the hedgeditem and the hedging instrument are fully offset until 2016. As of the balance sheet date, the interest rateswaps including accrued interest had a fair market value of minus EUR 19 million. The carrying amount(equal to deferred accrued interest) was EUR 3 million and is reported under liabilities to banks. The nethedge presentation method was used.64Boehringer Ingelheim annual report 2012

usiness year 2012consolidated financial statements6.4 Research and development expenses(in millions of EUR ) 2012 2011Research & development expenses 2,795 2,516The research and development expenses not capitalised include costs for phase IV clinical studies.6.5 Total auditor feesThe total fee charged by the auditor for the financial year was EUR 2.0 million. EUR 1.0 million of thisrelates to audits of financial statements, EUR 0.1 million to other assurance or valuation services andEUR 0.9 million to other services.Notes to the consolidated financial statements 65

AUDITOR’S REPORTWe have audited the consolidated financial statementsprepared by C.H. Boehringer Sohn AG &Co. KG, Ingelheim - comprising the balancesheet, the income statement, statement of changesin equity, cash flow statement and the notes to theconsolidated financial statements, together withthe group management report for the businessyear from 1 January to 31 December 2012. Thepreparation of the consolidated financial statementsand the group management report in accordancewith German commercial law is the responsibilityof the Managing Directors of themanaging corporate general partner. Our responsibilityis to express an opinion on the consolidatedfinancial statements and the group managementreport based on our audit.We conducted our audit of the consolidated financialstatements in accordance with § (Article) 317HGB (German Commercial Code) and Germangenerally accepted standards for the audit of financialstatements promulgated by the Institutder Wirtschaftsprüfer (Institute of Public Auditorsin Germany) (IDW). Those standards requirethat we plan and perform the audit such that misstatementsmaterially affecting the presentationof the net assets, financial position and results ofoperations in the consolidated financial statementsin accordance with (German) principles of properaccounting and in the group management reportare detected with reasonable assurance. Knowledgeof the business activities and the economicand legal environment of the Group and expectationsas to possible misstatements are taken intoaccount in the determination of audit procedures.The effectiveness of the accounting-related internalcontrol system and the evidence supportingthe disclosures in the consolidated financial statementsand the group management report are examinedprimarily on a test basis within the frameworkof the audit. The audit includes assessingthe annual financial statements of the companiesincluded in consolidation, the determination ofthe companies to be included in consolidation,the accounting and consolidation principles usedand significant estimates made by the ManagingDirectors of the managing corporate general partner,as well as evaluating the overall presentationof the consolidated financial statements and thegroup management report. We believe that ouraudit provides a reasonable basis for our opinion.66Boehringer Ingelheim annual report 2012

usiness year 2012auditor’s reportWith the exception of the following qualification,our audit has not led to any reservations: Contraryto § (Article) 314 (1) Nos. 6 (a) and (b) HGB thetotal remuneration granted to the members, theformer members of the board of managing directorsand the members of the supervisory body aswell as the pension provisions recognized and notrecognized for the former members of the boardof managing directors are not disclosed in thenotes to the consolidated financial statements.In our opinion based on the findings of our audit,with the qualification mentioned above, the consolidatedfinancial statements comply with thelegal requirements. The consolidated financialstatements give a true and fair view of the netassets, financial position and results of operationsof the Group in accordance with (German)principles of proper accounting. The group managementreport is consistent with consolidatedfinancial statements that comply with the legalrequirements and as a whole provides a suitableview of the Group’s position and suitably presentsthe opportunities and risks of future development.Frankfurt am Main, 22 February 2013PricewaterhouseCoopersAktiengesellschaftWirtschaftsprüfungsgesellschaft/s/ Philip MarshallWirtschaftsprüfer(German CertifiedPublic Accountant)/s/ Georg Wolfgang WegenerWirtschaftsprüfer(German CertifiedPublic Accountant)Auditor’s report67

68Boehringer Ingelheim annual report 2012

product portfolioa selection2012PRODUCT PORTFOLIOA SELECTIONcontents70 BRANDED PRESCRIPTION MEDICINES80 CONSUMER HEALTH CARE88 ANIMAL HEALTH69

Respiratory diseasesChronic obstructive pulmonary disease (COPD) andasthma are among the most prevalent chronic diseasesaffecting the lungs, and cause significant morbidity andpremature deaths worldwide.COPDCOPD is a chronic disease of the lungs in which the airwaysbecome narrowed. This leads to a limitation of airflow,causing shortness of breath and other respiratorysymptoms. The airflow limitation is only partially reversibleand usually worsens gradually over time. Destructionof lung tissue (mainly affecting the alveoli andthus gas exchange) and excessive mucus in the airwaysinducing chronic cough contribute to the burden of disease.These manifestations of COPD are designated asemphysema or chronic bronchitis.AsthmaAsthma is a chronic disease involving airway inflammationin response to exposure to asthma triggers such asallergens. Airway inflammation causes the narrowing ofairways and, in some patients, an increase in mucus,and chronic dry cough may be an asthma symptom.Quite variable breathing difficulties may occur. In theearly stages of the disease, this airflow limitation is fullyreversible and patients can be free of symptoms betweenattacks.COPD is caused by noxious stimuli, such as cigarettesmoke or air pollution. The course of COPD is characterisedby an accelerated loss of lung function comparedto normal ageing and occasional sudden worsening ofsymptoms and functions called acute exacerbations.70Boehringer Ingelheim annual report 2012

product portfoliobranded prescription medicinesIndications Brand names Active ingredients• Chronic obstructive pulmonarydisease (COPD)spiriva® tiotropium bromide Maintenance treatment of patients withCOPD (chronic obstructive pulmonarydisease, including chronic bronchitisand emphysema), the maintenancetreatment of associated dyspnoea andfor prevention of exacerbations.• Bronchospasms associatedwith reversible obstructiveairway diseasescombivent®ipratropium bromide,salbutamolManagement of reversible bronchospasmsassociated with obstructiveairway diseases in patients requiringmore than one bronchodilator.• Chronic obstructivepulmonary disease (COPD)• Chronic bronchitis• Asthmaatrovent® ipratropium bromide Bronchodilator for maintenance treatmentof bronchospasms associated withchronic obstructive pulmonary disease,including chronic bronchitis, emphysemaand asthma.• Bronchial asthma• Chronic bronchitisberodual®bronchodual®duovent®fenoterol,ipratropiumbromidePrevention and treatment of symptomsin chronic obstructive airway disorderswith reversible air flow limitations, suchas bronchial asthma, and especiallychronic bronchitis, with or without emphysema.• Bronchial asthmaberotec®dosberotec®fenoterolSymptomatic treatment of acute asthmaattacks and other conditions with reversibleairway narrowing, e. g. chronicobstructive bronchitis, prophylaxis ofexercise-induced asthma.• Bronchial asthma inflammide® budesonide Chronic control of symptoms of bronchialasthma.• Bronchial asthma• Allergic rhinitisalesion®flurinol®epinastineProphylactic treatment of bronchialasthma. Prophylaxis and symptomatictreatment of allergic rhinitis.Respiratory diseases71

Diseases of the central nervous systemMental and neurological diseases, such as depressionand Parkinson’s disease, significantly impact patientsand their families, and are a substantial burden to society.Parkinson’s diseaseParkinson’s disease (PD) is a degenerative disorder ofthe central nervous system. Patients usually notice motorsymptoms, like hand tremor (shaking), as their firstsign of the disease, which progresses eventually to includeshaking of the arms, legs or head. Other motorsymptoms that may develop over time include stiffnessthat often results in loss of facial expression and agradual slowing or loss of motion or “freezing”. About30 – 40% of patients also suffer from non-motor symptomsassociated with PD, such as dementia, depressionand sleep disorders. The primary symptoms are theresult of a lack of the neurotransmitter dopamine indistinct areas of the human brain.Restless legs syndrome (RLS)Restless legs syndrome (RLS) is a common neurologicaldisorder characterised by an uncontrollable urge tomove the legs, primarily occuring in the evening andnight hours, usually accompanied by unpleasant andsometimes painful sensations in the legs as well as disturbedsleep resulting in daytime tiredness or sleepiness.The sensations are felt deep within the legs and aredescribed as creeping, crawling or aching.72Boehringer Ingelheim annual report 2012

product portfoliobranded prescription medicinesIndications Brand names Active ingredients• Parkinson’s disease (PD)• Restless legs syndrome (RLS)sifrol®sifrol® ermirapex®mirapex® ermirapex er®mirapexin®mirapexin® erpexola®pramipexoleSymptomatic treatment of idiopathicParkinson’s disease. It may be used asmonotherapy or in combination withlevodopa. Symptomatic treatment ofidiopathic moderate to severe restlesslegs syndrome.• Sleep disorderslendormin®lendorm®lindormin®sintonal®brotizolamShort-term treatment of disorders ofinitiating and maintaining sleep.Diseases of the central nervous system73

Cardiovascular diseasesCardiovascular diseases are the leading causes of deathin many countries, and are still increasing in prevalence.StrokeStroke is the rapidly developing loss of brain functionsdue to a blockage of the blood flow to the affected braintissue. This can be due to ischaemia (lack of blood supply)caused by thrombosis or embolism, or due to ableeding. As a result, the affected area of the brain isunable to function and the damage quickly becomespermanent, if untreated. Stroke is an acute event requiringemergency diagnosis and intervention. Stroke is oneof the leading causes of death and long-term disabilityin the developed world. Symptoms of a transient ischaemicattack (TIA) are similar to stroke, but last for onlya few minutes or hours. As a TIA may precede a stroke,emergency medical care and subsequent preventivetreatment is necessary.Acute myocardial infarctionAn acute myocardial infarction, or heart attack, is anacute event that occurs when a thrombus or clot suddenlyprevents blood flow to an area of the heart muscle.Unless the blood flow is restored quickly, the affectedsection of heart muscle becomes permanentlydamaged. Heart attack is a leading cause of death in alldeveloped countries.74Boehringer Ingelheim annual report 2012

product portfoliobranded prescription medicinesIndications Brand names Active ingredients• Essential hypertension• Cardiovascular preventionmicardis®micardisplus®micardis® plusmicardis® hctco-micardis®telmisartan;telmisartan, hydrochlorothiazideTreatment of essential hypertension.For the reduction of the risk of myocardialinfarction (heart attack), stroke ordeath from cardiovascular (CV) causes inpatients 55 years of age or older at highrisk of developing major CV events whoare unable to take ACE inhibitors (USA).For the reduction of cardiovascular morbidityin patients with manifest atherothromboticcardiovascular disease (historyof coronary heart disease, stroke orperipheral arterial disease), or type 2diabetes mellitus with documented targetorgan damage (EU).• Hypertensiontwynsta®micamlo®micardis amlo®micardis anlo®micardis duo®micardis® duotelmisartan, amlodipineTreatment of hypertension alone or withother antihypertensive agents. As initialtherapy in patients likely to need multipleantihypertensive agents to achievetheir blood pressure goals (USA).Add-on therapy in adult patients with notadequately controlled blood pressure onamlodipine and replacement therapy inadult patients receiving telmisartan andamlodipine from separate tablets (EU).• Secondary prevention ofstroke or transient ischaemicattacks (TIA)aggrenox®agrenox®asasantin®asasantin® retarddipyridamole,acetylsalicylic acidPrevention of stroke following a firststroke or transient ischaemic attacks.• Hypertensioncatapresan®catapres®catapressan®atensina®clonidineAll forms of high blood pressure, unlesscaused by phaeochromocytoma.• Acute ischaemic stroke• Acute myocardial infarction• Acute massive pulmonaryembolism• Catheter clearance due tothrombotic occlusionactilyse®actilyse® cathflo® 2mgalteplaseFibrinolytic treatment of acute ischaemicstroke, acute myocardial infarction,acute massive pulmonary embolism andfor catheter clearance due to thromboticocclusion.Cardiovascular diseases75

Cardiovascular diseases (continued)Hypertension and cardiovascular diseaseHypertension, also referred to as high blood pressure, isa chronic disease in which the blood pressure is chronicallyelevated. Hypertension is one of the major risk factorsfor strokes, heart attacks, heart failure and chronicrenal failure.About one billion people worldwide are affected by hypertension.The prevalence of essential hypertension increasessteadily with age. As the world population is ageingand preventive strategies in terms of lifestyle changesare so far failing, the prevalence of hypertension is set toincrease even further.Hypertension is a major risk factor for cardiovascularmorbidity and mortality. The organs at risk are primarilythe heart, the main blood vessels, the brain and the kidneys.The primary goal of any antihypertensive treatmentis to prevent cardiovascular events, such as heartattacks or strokes, and finally to reduce cardiovascularmortality. Cardiovascular disease (CVD) is responsiblefor nearly one in three deaths worldwide and is thenumber one cause of death.Venous thrombo-embolismPatients undergoing orthopaedic surgery are at considerablerisk of developing deep vein thrombosis in the legsor a potentially fatal pulmonary embolism. Both are alsoknown as venous thrombo-embolism (VTE). In the longerterm, thrombo-embolic events may recur and chronicvenous insufficiency and/or pulmonary hypertensionmay occur. To prevent VTE events and their consequences,patients should receive some kind of thromboprophylaxis.Atrial fibrillationPatients with atrial fibrillation (AF) are at higher risk ofdeveloping blood clots, which can cause a disablingstroke if the clots travel to the brain. AF is the most commontype of arrhythmia. It is associated with a hypercoagulablestate, which predisposes to stroke and systemicembolism, which can be prevented by effective chronicanticoagulation.Proper control of treatable risk factors and disease arevital for the prevention of cardiovascular events.76Boehringer Ingelheim annual report 2012

product portfoliobranded prescription medicinesIndications Brand names Active ingredients• Acute myocardial infarction metalyse® tenecteplase Fibrinolytic treatment of acute myocardialinfarction.• Ventricular tachycardia mexitil® mexiletine Serious symptomatic ventricular tachycardicheart rhythm disturbances.• Hypertensionmotens®caldine®tens®midotens®lacidipineTreatment of essential hypertension.• Primary prevention of venousthrombo-embolic eventsafter orthopaedic surgerypradaxa®pradaxar®dabigatranetexilatePrimary prevention of venous thromboembolicevents (VTE) in adults afterelective total hip or knee replacementsurgery.• Stroke prevention in atrialfibrillationpradaxa®pradaxar®prazaxa®dabigatranetexilatePrevention of stroke and blood clots inpatients with abnormal heart rhythm(atrial fibrillation).Cardiovascular diseases77

Metabolic diseasesDiabetesType 2 diabetes is a chronic, progressive condition thatcan damage the human body severely.Every year, 4.6 million deaths worldwide are linked directlyto long-term effects of diabetes. As the most commonform of diabetes, type 2 diabetes accounts for upto 95% of all diabetes cases in the developed world: itnow affects 371 million people worldwide and is imposingan enormous burden on healthcare systems globally.Without effective prevention and management, it is estimatedthat the number of cases will reach 552 millionby 2030.Long-term complications of diabetes include:Retinopathy with potential loss of vision, an increased incidenceof stroke and cardiovascular disease, peripheralneuropathy with the risk of foot ulcers, foot and legamputations, autonomic neuropathy causing gastrointestinal,genitourinary and cardiovascular symptoms andsexual dysfunction and nephropathy leading to renal failurewith potential risk for dialysis.Infectious diseasesHIV infection/acquired immune deficiency syndrome(AIDS)Acquired immune deficiency syndrome (AIDS) is a set ofsymptoms and infections resulting from the damage tothe human immune system caused by the human immunodeficiencyvirus (HIV). If untreated, this conditionprogressively reduces the effectiveness of the immunesystem and leaves individuals susceptible to opportunisticinfections and tumours. Babies of infected mothersare at risk of getting the virus during pregnancy, childbirthor breastfeeding.78Boehringer Ingelheim annual report 2012

product portfoliobranded prescription medicinesIndications Brand names Active ingredients• Type 2 diabetes mellitustrajenta®tradjenta®trazenta®trayenta®linagliptinTreatment of type 2 diabetes mellitus toimprove glycaemic control in adults. Itmay be used as monotherapy or in combinationtherapy.• Type 2 diabetes mellitusjentadueto®trayenta duo®linagliptin, metformin hydrochlorideTreatment of type 2 diabetes mellitus toimprove glycaemic control in adultswhen treatment with both linagliptinand metformin is appropriate.Indications Brand names Active ingredients• HIV/AIDSviramune® xrviramune xr®viramune® prolongedrelease tabletsnevirapineAvailable as tablets and suspension foradults and children – for the combinationtherapy of HIV-1 infection and (inseveral countries) for the prevention ofmother-to-child transmission of HIV-1in pregnant women who are not takingantiretroviral therapy at time of labour.Prolonged release tablets for once-dailydosing within combination therapy.• HIV/AIDS aptivus® tipranavir Capsule and oral solution – co-administeredwith 200 mg of ritonavir, is indicatedfor combination antiretroviraltreatment of HIV-1-infected patientswith evidence of viral replication, whoare treatment-experienced and infectedwith HIV-1 strains resistant to more thanone protease inhibitor.Metabolic diseases / Infectious diseases79

Cough and coldmucosolvan® (ambroxol) and bisolvon® (bromhexine)are both indicated for secretolytic therapy in bronchopulmonarydiseases associated with abnormal mucussecretion and impaired mucus transport.Cough is the most common symptom of clinical importanceand a frequent reason for consulting a doctor orvisiting a pharmacy. The clinical symptoms of coughand expectoration have led to the development of drugsthat affect respiratory mucus, i. e. the mucoactive agents.mucosolvan® (ambroxol), which promotes mucus clearance,facilitates expectoration and eases productivecough, allowing patients to breathe freely and deeply, isthe world’s leading cough brand. It is available in manydifferent product forms and formulations.body’s natural defence mechanisms. Ambroxol alsostimulates synthesis and release of surfactant by type IIpneumocytes.bisolvon® (bromhexine), available for all age groups,has been on the market since 1963. Bromhexine is containedin various formulations of bisolvon®. There arehigh- and low-strength syrups 8 mg/5 ml, 4 mg/5 ml,tablets and soluble tablets (both with 8 mg bromhexine)and solution for oral use (10 mg/5 ml), adapted to patients’needs. Bromhexine is a synthetic derivative of theherbal active ingredient vasicine. It has been shown toincrease the proportion of serious bronchial secretion,making it more easily expectorated. Bromhexine alsoenhances mucus transport by reducing mucus viscosityand by activating the ciliated epithelium.Ambroxol is a mucoactive drug with several properties,including secretolytic and secretomotoric actions thatrestore the physiological clearance mechanisms of therespiratory tract, which play an important role in theSore throatmucoangin® is the best documented product in its categoryof pain relief in acute sore throat.Pain in sore throat is the hallmark of acute pharyngitis,usually caused by a viral infection. The infection is, as arule, self-limited and the patient normally recovers in acouple of days. What is most bothersome for the patientis the continuous pain in the throat, which is maximisedwhen swallowing. The main goal of the treatment isthus to reduce pain.In addition to its secretolytic activity, ambroxol is a verypotent inhibitor of the neuronal sodium channels.Therefore mucoangin® (ambroxol) has a strong localanaesthetic effect, described first in the late 1970s, butexplained and confirmed in more recent work.80Boehringer Ingelheim annual report 2012

product portfolioconsumer health careIndications Brand names Active ingredients• Acute and chronic bronchopulmonarydiseasesmucosolvan®mucosan®surbronc®lasolvan®mucopect®ambroxolSecretolytic therapy in acute and chronicbronchopulmonary diseases associatedwith abnormal mucus secretion and impairedmucus transport.• Acute and chronic bronchopulmonarydiseasesbisolvon® bromhexine Secretolytic therapy in acute and chronicbronchopulmonary diseases associatedwith abnormal mucus secretion and impairedmucus transport.• Irritable coughsilomat® dmpbisoltussin®bisolvon® drybisolsek®bisolvon® antitusivodextrometorphanSymptomatic treatment of irritable, nonproductivecough.Indications Brand names Active ingredients• Sore throatmucoangin®lysopadol®lysopain® dolisodinemint®zerinol® golaambroxolPain relief in acute sore throat.Cough and cold / Sore throat81

Gastrointestinal diseasesIn our gastrointestinal portfolio, we offer several brandssuch as dulcolax®, surulac®, laxoberal®, guttalax®,buscopan®, as well as the heartburn brands zantac®and buscopan® antiacido and gastol®.Constipation is a common problem. dulcolax® is theleading over-the-counter (OTC) laxative remedy forconstipation relief worldwide.Within the dulcolax® franchise, Boehringer Ingelheimmarkets a range of products for the treatment, regulationand prevention of intestinal irregularity and disruption.The primary ailment within this area is constipation,for which dulcolax® tablets are today the mainmethod of treatment.dulcolax® tablets have a special enteric “comfortcoating” which ensures that the active ingredient indulcolax® tablets, bisacodyl, is taken to where it needsto act – the colon. Here, in the colon, the colonic juicesactivate the key ingredient, which then relieves constipation.It stimulates the natural movement of the bowelsto provide gentle, predictable relief within 6 –12 hours.One to two tablets taken before going to bed will stillprovide relief the next morning.dulcolax® is specifically formulated to provide effective,predictable relief for constipation. dulcolax® offersa reliable range of products.Abdominal cramping, pain and discomfort are commonailments. Approximately one in four persons worldwidesuffers on a regular basis.buscopan® is an antispasmodic product with the activeingredient hyoscine butylbromide. The product is basicallya natural substance extracted from Duboisia plant speciesas scopolamine (hyoscine) and chemically modifiedto the quaternary ammonium compound hyoscine butylbromide.As an antispasmodic product, buscopan® actsdirectly on the site of abdominal pain by relaxing thesmooth muscles of the gastrointestinal, biliary, urinaryand genital tracts.This means buscopan® relieves abdominal pain by directlytreating its main cause – abdominal cramp orspasm.Several buscopan® line extensions are available today –the mono-variant and different combinations withanalgesics (paracetamol, ibuprofen and metamizol/dipyrone)– and different formulations (tablets, drops, suppositories,syrup and solutions for intravenous injection).The umbrella brand buscopan® also offers buscofem®for mentstrul pain relief, buscopan® antiacido andbuscopan® reflusso for heartburn relief.Other products within the dulcolax® range includedulcoease® (stool softener), dulcoenema®,dulcobalance® and dulcogas®.surulac® is the constipation brand in Japan, whereconsumers are offered surulac® as a laxative tablet.laxoberal® and guttalax® are the brands offeringconsumers constipation relief with a unique and flexibledosage format – namely drops.82Boehringer Ingelheim annual report 2012

product portfolioconsumer health careIndications Brand names Active ingredients• Constipationdulcolax®dulcolaxo®surulac® sbisacodyl, sennosideLaxative for use in patients sufferingfrom constipation. In preparation fordiagnostic procedures, in pre- and postoperativetreatment, and in conditionsthat require defecation to be facilitated.• Constipationlaxoberal®laxoberon®guttalax®dulcolax® npdulcodrops®dulcogotas®sodium picosulphateLaxative for use in cases of constipationand in conditions that require defecationto be facilitated.• Constipationdulcolax® balancedulcolax® m balancedulcobalance®macrogolSymptomatic treatment of constipationfor adults and children from eight yearsonwards.• Gas and bloating dulcogas® simethicone Fast-acting granules that relieve gas andbloating, as well as prevent flatulence.• Abdominal crampingbuscopan®buscapina®hyoscine butylbromideTreatment for the relief of abdominalcramping, pain and discomfort.• Heartburn zantac® (*)buscopan® antiaci doranitidineRelieves heartburn associated with acidindigestion and sour stomach. Preventsheartburn associated with acid indigestionand sour stomach brought on bycertain foods and beverages.* Only available in the USA.Gastrointestinal diseases83

Vitamins and supplementspharmaton® capsules/tablets is a multivitamin and mineralsupplements brand developed to support physicaland mental well-being. A full range of products adaptedto the needs of different target audiences has been developedthat work in harmony with the body.pharmaton® vitality, a range of products for adults,contains a selected blend of vitamins, minerals and traceelements and standardised Ginseng extract G115®. Themain target indications are: exhaustion, tiredness, decreasingconcentration and mental alertness, as well as incases of deficient nutrition, loss of appetite, debility dueto illness and convalescence. Numerous clinical studieshave shown that a regular intake of pharmaton® has apositive effect on mental and physical performance andwell-being.pharmaton® matruelle® is indicated for women who areactively planning to get pregnant, pregnant women andbreastfeeding women, and contains all important micronutrientsfor mother and baby, such as vitamins, mineralsand omega-3 fatty acids, to cover the increased needs forthese substances in those particular periods. Moreover, ithelps to protect against embryonal neural tube diseases ofthe foetus and against iron and folic acid anaemia duringpregnancy.pharmaton® cardioactive, a product designed foradults over 40 years of age, contains a blend of vitaminsand minerals combined with omega-3 fatty acids to helpmaintain cardiovascular health.pharmaton® kiddi®, a range of products designed forchildren, contains selected vitamins, minerals and the essentialamino acid lysine that are important during theperiod of growth. It is also recommended in the preventivetreatment of vitamin deficiencies.Urological diseasesBenign prostate hyperplasia (BPH) refers to an enlargementof the prostate in middle-aged and elderly men,which can lead to lower urinary tract symptoms (LUTS)such as frequent nighttime urination, urge to urinateevery few hours, weak flow and feeling of unfinishedurinating.84Boehringer Ingelheim annual report 2012

product portfolioconsumer health careIndications Brand names Active ingredients• Tiredness, decreasing concentration,in cases of deficientnutrition, loss of appetite,debility due to illnessand convalescencepharmaton® vitalitystandardised ginsengextract, vitamins,minerals, traceelementsTo improve general well-being.• Increased demand for vitaminsin childhoodpharmaton® kiddi®vitamins,minerals,amino acidsIncreased demand for vitamins, mineralsand amino acids, especially during theperiod of growth. Preventive treatmentin cases of vitamin deficiencies, e. g. restricteddiets, convalescence, loss ofappetite, following illness, infection orsurgery.• Prophylaxis of iron and folicacid deficiency duringpregnancypharmaton®matruelle®vitamins, minerals,trace elements,omega-3 fatty acids[docosahexaenoicacid (DHA)]For women of child-bearing age intendingto become pregnant, already pregnantand lactating, to cover the increasedneeds for vitamins, minerals,trace elements and DHA. To provide protectionagainst embryonal neural tubediseases of the foetus, and prophylaxisof iron and folic acid anaemia duringpregnancy.• Maintenance of cardiovascularhealthpharmaton®cardioactivepharmaton®coractivevitamins, minerals, trace elementsand fish oil (omega-3 fatty acids richin EPA and DHA)Helps to maintain cardiovascular health.Covers the daily needs for vitamins,minerals, trace elements and fish oil(omega-3 fatty acids rich in EPA andDHA) by acting complementary to dailynutrition.Indications Brand names Active ingredients• Benign prostate hyperplasia(BPH)flomax relief® (*)tamsulosinTreatment of lower urinary tract symptoms(LUTS) of a common conditioncalled benign prostate hyperplasia(BPH).* Only available in UK.Vitamins and supplements/ Urological diseases85

Leg vein healthUnder the brand name antistax®, Boehringer Ingelheimmarkets a range of products developed for the preventionand treatment of symptoms attributable toknown venous insufficiency. The most common symptomsof venous insufficiency observable for consumersare varicose veins, oedema of the lower leg, heavy ortired legs, sensation of tension, tingling, cramps andpain. antistax® capsules and tablets are scientificallyproven to help maintain healthy leg vein circulation.Heavy, aching and tired legs often occur after long periodsof standing or sitting, and increase at the end of theday or during the summer when outdoor temperaturesrise. antistax® tablets and antistax® capsules offer effectivetreatment of the described symptoms. antistax®helps to keep the fluid that flows out of the small venousvessels (venules) into the surrounding tissue atnormal levels, even when standing or sitting for a longtime.Red vine leaf extract, the active ingredient in antistax®products, has an antiinflammatory effect and works onthe endothelium inside the venules by sealing themfrom the inside, thereby reducing the swelling and thesensation of pain and heaviness.Products available in the antistax® range includeantistax® tablets, antistax® capsules and antistax®creme, as well as the cosmetic product antistax® legchilling gel.PainThe brand thomapyrin® comprises products for thetreatment of acute pain of mild to intermediate intensity.thomapyrin® classic is the core product, which iscomposed of a triple combination of acetylsalicylic acid,paracetamol and caffeine. The three components suppresspain synergistically via interaction with several pain-relatedmolecular mechanisms. As a result, thomapyrin®classic offers faster and superior efficacy comparedwith its single components which is, amongst others,well proven by state-of-the-art clinical studies.For this reason, the triple combination is recommendedby many national and international medical societies asfirst choice acute treatment for tension-type headachesand migraines. thomapyrin® is positioned as the experttreatment for headaches. Several line extensions areavailable: thomapyrin® classic for normal headache,thomapyrin® intensiv for stronger headache,thomapyrin® medium for milder headache, andthomapyrin® effervescent tablets as a galenic alternative.Alongside thomapyrin®, Boehringer Ingelheim also offersanalgesics in a combination of ibuprofen, allylisopropylacetylurea,dehydrated caffeine and magnesiumoxide in Japan and South Korea under the tradenameeve®, and as a mono active ingredient with metamizolin Brazil under the tradename anador®.86Boehringer Ingelheim annual report 2012

product portfolioconsumer health careIndications Brand names Active ingredients• Chronic venous insufficiency antistax® red vine leaf extract Prevention and treatment of symptomsof chronic venous insufficiency; varicoseveins, leg oedema, painful swollen legs,tingling legs, tired and heavy legs.• Heavy, tired legsantistax®leg chilling gelcooling, caringsubstances, red vineleaf extractSymptomatic treatment of heavy, tiredlegs.Indications Brand names Active ingredients• Painthomapyrin® classicthomapyrin® intensiv (*)acetylsalicylic acid,paracetamol, caffeineFor adults and adolescents older thantwelve years for acute treatment of mildto moderate headache, migraine attacks,with and without aura, and for the treatmentof tension-type headache.* Only available in Germany.• Pain eve® a (*)eve® quick (*)ibuprofen;allylisopropylacetylurea, dehydratedcaffeine, magnesium oxide *For adults (15 years and older) for thereduction of fever and the temporaryrelief of mild to moderate aches andpains associated with: headache, menstrualpain and other body pains.* Only available in Japanand South Korea.* Only in eve® quick.• Pain anador® (*)metamizolFor adults and adolescents older than12 years for acute treatment of mild tomoderate headache.* Only available in Brazil.Leg vein health / Pain87

Food producing animals – swineInfectious respiratory diseasesingelvac circoflex® is the first single-dose piglet vaccinefor the control of porcine circovirus disease(PCVD). This vaccine provides significant reduction ofmortality in the acute phase of PCVD as well as improvedgrowth rates in the chronic phase of the disease.ingelvac circoflex® protects with minimal systemicadverse reactions or injection site swellings. The mixingof ingelvac circoflex® with ingelvac mycoflex® wasapproved by the European Commission. ingelvac®prrs mlv is licensed for active immunisation againstthe respiratory and reproductive form of porcine reproductiveand respiratory syndrome (PRRS).Infectious enteric diseasesenterisol® ileitis is the first and only vaccine againstileitis caused by Lawsonia intracellularis. It is licensedto improve weight gain and to reduce growth variabilityassociated with the disease. enterisol® ileitis helps toreduce the total antimicrobial use in pork production.ingelvac mycoflex® is licensed for the active immunisationof pigs against enzootic pneumonia (EP) in asingle-dose regimen. Through its advanced adjuvantsystem, it provides long-lasting and effective protection,proven even in high-challenge situations.Food producing animals – poultryvolvac® is the umbrella brand of the Boehringer IngelheimAnimal Health poultry vaccine range. It consists ofa wide range of live and inactivated vaccines for broilersand layers. The vaccines provide protection of the birdsagainst various viral and bacterial diseases like avianinfluenza, infectious bronchitis, Newcastle disease,infectious bursal disease, egg drop syndrome and aviancoryza. The volvac® vaccines also allow the birds toexpress their full potential and increases their well-being.88Boehringer Ingelheim annual report 2012

product portfolioanimal healthIndications Brand names Active ingredients• Infectious respiratorydiseasesingelvac circoflex®recombinant vaccine(porcine circovirustype 2, PCV 2)For the active immunisation of pigs overthe age of two weeks against porcinecircovirus type 2 to reduce mortality,clinical signs – including weight loss –and lesions in lymphoid tissues associatedwith porcine circovirus diseases(PCVD).In addition, vaccination has been shownto reduce PCV 2 nasal shedding, viralload in blood and lymphoid tissues, andduration of viraemia.• Infectious respiratorydiseasesingelvac® prrs mlvattenuated live vaccine(PRRS virus)For the active immunisation of swinefrom the age of three weeks against therespiratory and reproductive form ofPRRS virus infection (porcine reproductiveand respiratory syndrome).• Infectious respiratorydiseasesingelvac mycoflex®inactivated vaccine(Mycoplasmahyopneumoniae)For active immunisation of pigs from theage of three weeks against lung lesionsfollowing infections with Mycoplasmahyopneumoniae.• Infectious enteric diseases enterisol® ileitis attenuated livevaccine (Lawsoniaintracellularis)For active immunisation of pigs from theage of three weeks and older against intestinallesions caused by Lawsoniaintracellularis infection and to reducegrowth variability and loss of weight gainassociated with the disease.Indications Brand names Active ingredients• Various viral and bacterialdiseases in poultryvolvac®Polyvalent attenuated live and inactivatedvaccine containing antigensfor vaccination against avian influenza,Newcastle disease,avian coryza, egg dropsyndrome, infectiousbronchitis, infectiousbursal disease, gallibacteriumanatisFor vaccination of healthy chickenagainst diseases caused by included antigens.For the most common diseasesresponsible for losses in egg productionin layers and affecting the health ofbroiler chicken.Food producing animals – swine89

Food producing animals – cattleMastitisMastitis is the inflammation of the udder in dairy cattle,mainly caused by bacterial infection. Prevention andtreatment of mastitis in these animals is key to producinghealthy milk and minimising the symptoms associatedwith this clinical situation. ubrolexin® and today® aretwo products for the treatment of acute bacterial masitis,whereas ubrostar® and tomorrow® are used to preventmasitis during drying-off in dairy cattle at the endof their lactation period. mamyzin® is an effective injectableantimicrobial for the treatment of acute mastitis,and metacam® is used to reduce acute pain associatedwith this syndrome.90Boehringer Ingelheim annual report 2012

product portfolioanimal healthIndications Brand names Active ingredients• Mastitis mamyzin® penethamate hydroiodide For the treatment of mastitis in dairycows caused by Gram-positive pathogens.• Mastitisbenestermycin®ubrostar®penethamate hydroiodidebenethamine penicillinframycetin sulphateTreatment of subclinical mammary infectionspresent at drying-off.• Mastitis ubrolexin® cefalexin (as monohydrate),kanamycin (as monosulphate)Treatment of clinical mastitis in lactatingdairy cows caused by bacteria.• Mastitis today® (*)cephapirin sodiumFor intramammary infusion into lactatingcows.* Only available in USAand Canada.• Mastitis tomorrow® (*)cephapirin benzathineFor intramammary infusion into the drycow.* Only available in USAand Canada.Food producing animals – cattle91

Food producing animals – cattle (continued)Pain and inflammatory diseasesmetacam® as a member of the class of non-steroidalanti-inflammatory drugs (NSAIDs) combines the needfor maintained profitability and the concern for animalwelfare in animal production.Due to its long-acting feature and its outstanding efficacyin controlling inflammatory symptoms, it helps tominimise losses from inflammation and maintain profitabilityin animals suffering from disease. At the sametime, metacam® effectively controls pain and supportsthe restoration of well-being in farm animals. The useof metacam® is convenient and inflicts no stress on animalsdue to its low-volume, one-shot feature.metacam® is licensed for use in cattle suffering fromrespiratory disease. It is also indicated in calves affectedby diarrhoea and as adjunctive therapy in the treatmentof mastitis in lactating cattle.Companion animals – horseThe main horse products focus on the therapeutic areasrespiratory disease, lameness and colic, as well as newlyhormonal disorders.ventipulmin® is a treatment of acute and chronic respiratorydisease in which airway obstruction due to bronchospasmand/or mucus accumulation is a contributingfactor and improved mucociliary clearance is desirable.ventipulmin® can be used alone or as adjunctive therapyin chronic obstructive pulmonary disease (COPD)and in acute, sub-acute and chronic respiratory allergicconditions.prascend® is indicated for the treatment of pituitarypars intermedia dysfunction (PPID), which is also knownas Equine Cushing’s disease. prascend® substitutes thelack of dopamine in the pituitary pars intermedia. Clinicalsigns are hypertrichiosis, laminitis, change in bodyconfirmation and lack of performance. Treatment withprascend® is life-long.vetera® vaccines is the first vaccine portfolio that includesmultiple choices of convenient combinations ofdisease protection for horses as young as four months ofage. The vaccine protects against as many as seven oreight diseases including influenza, herpes, West-Nile,tetanus and others. This enables a customised protectionfor each horse possible with limited needle injections.All vetera® vaccines are formulated utilising theUltrafil Purification Technology, removing most of theextraneous proteins and allowing the horse’s immunesystem to focus on the relevant antigens.92Boehringer Ingelheim annual report 2012

product portfolioanimal healthIndications Brand names Active ingredients• Pain and inflammatory diseasesmetacam® meloxicam Alleviation of inflammation and pain inmuscolo-skeletal disorders (dog, cat,pigs, horse) after surgery (dog, cat, pigs)and during colic (horse).As adjunctive treatment of diarrhoea,respiratory disease, acute mastitis anddehorning (cattle), as well as mastitismetritis-agalactiasyndrome (pigs).• Cattle infectious diseasespyramid®presponse®attenuated vaccine against bovinerhinotracheitis-virus, diarrhea,parainfluenza 3, respiratory syncytialvirus, Mannheimia haemolytica toxoidFor vaccination of healthy dairy or beefcattle as an aid in prevention of diseasescaused by included antigens (US andCanada only).Indications Brand names Active ingredients• Acute and chronic obstructiverespiratory diseasesventipulmin® clenbuterol Respiratory diseases attended by bronchialspasms, like subacute and chronicbronchiolitis, chronic-obstructive pulmonarydisease (COPD), auxillary with acutebronchitis and pneumonia of bronchia.• Pituitary pars intermediadysfunction (PPID)prascend® pergolide mesylate For the treatment of clinical signs associatedwith pituitary pars intermediadysfunction (PPID) (Equine Cushing’sdisease).• 7-way and 8-way combinationvaccine against commondisease in horsesvetera®Eastern, Western, Venezuelanencephalomyelitis, tetanus,West Nile virus,equine herpesvirus, equineinfluenza virusFor vaccination of healthy horses as anaid in the prevention of diseases causedby included antigens (US and Canada).Food producing animals – cattle93

Companion animals – small animalsThe main small animal products address major chronicdiseases: heart failure and osteoarthritis.As the first of a new class of heart treatments termed inodilators,vetmedin® has been shown to significantlyimprove clinical signs and extend life expectancy indogs with congestive heart failure originating from dilatedcardiomyopathy or valvular insufficiency (mitraland/or tricuspid regurgitation). vetmedin® worksthrough two complementary modes of action: it opensup the blood vessels taking blood to and away from theheart, thereby lowering the pressure on the heart andreducing the work the heart has to do to pump bloodaround the dog’s body. At the same time, vetmedin® hasa direct effect on the heart muscle, helping it to beatstronger and pump blood more efficiently.prozinc® is an aqueous protamine zinc (PZI) suspensionof recombinant human insulin that is used to reducehyperglycaemia in cats with diabetes mellitus.The duramune® and fel-o-vax® brands are vaccinesdesigned to aid in the prevention of a wide spectrum ofinfectious diseases in dogs and cats. These common diseasescan be very serious and, in some cases, even fatal.Effective prevention, including appropriate vaccination,reduces the impact of these diseases on dogs and cats.metacam® is a non-steroidal anti-inflammatory drug(NSAID). It is available as an oral suspension, tabletsand injectable solution for dogs and as an oral suspensionand injectable solution for cats. In dogs, the indicationsinclude the alleviation of inflammation and painin both acute and chronic musculo-skeletal disorders, aswell as the reduction of post-operative pain followingsurgery. In cats, the indications include the alleviationof inflammation and pain in acute and chronic musculo-skeletaldisorders, as well as for alleviation of mild tomoderate post-operative pain following surgical procedures.The variety of formulations offers veterinariansand owners the flexibility to use the formulations theyprefer to manage the various levels of inflammation andpain associated with the licensed indications.94Boehringer Ingelheim annual report 2012

product portfolioanimal healthIndications Brand names Active ingredients• Congestive heart failure vetmedin® pimobendan Treatment of canine congestive heartfailure originated from dilatative cardiomyophathyor valvular insufficiency (mitraland/or tricuspid regurgitation).• Pain and inflammatory diseasesmetacam® meloxicam In dogs, the indications include the alleviationof inflammation and pain in bothacute and chronic musculo-skeletal disorders,as well as the reduction of postoperativepain following surgery.In cats, the indications include the alleviationof inflammation and pain inacute and chronic musculo-skeletal disorders,as well as the alleviation of mildto moderate post-operative pain followingsurgical procedures.• Feline diabetes mellitus prozinc® (*)protamine zincrecombinanthuman insulinFor the reduction of hyperglycaemia andhyperglycaemia associated clinical signsin cats with diabetes mellitus.* Currently only available inUSA.• Canine infectious diseases duramune® inactivated and attenuated vaccineagainst canine distemper, canineadenovirus type 2, coronavirus,parainfluenza-, parvovirus, borreliaBurgdorferi, leptospira canicola,-grippotyphosa, -icterohaemorrhagiae,-pomonaFor vaccination of healthy dogs as an aidin the prevention of diseases caused byincluded antigens (US, Canada and Australiaonly).• Feline infectious diseases fel-o-vax® inactivated vaccine against felineleukemia, rhinotracheitis, calici,panleukopenia, chlamydia psittaciFor vaccination of healthy cats as an aidin the prevention of diseases caused byincluded antigens (US, Canada and Australiaonly).Companion animals – small animals95

C. H. Boehringer Sohn AG & Co. KG, IngelheimCOMPARISON OF BALANCE SHEETS 2003 – 2012(in millions of EUR)Assets (as of December 31) 2003 2004 2005Intangible assets 242 267 233Tangible assets 2,767 2,712 2,900Financial assets 2,462 2,756 3,396Fixed assets 5,471 5,735 6,529Inventories 1,000 1,085 1,229Accounts receivable (incl. deferred charges and deferred taxes) 2,537 2,477 3,013Liquid funds 1,134 1,333 1,247Current assets (incl. deffered charges and deferred taxes) 4,671 4,895 5,489Total assets 10,142 10,630 12,018Liabilities and equity (as of December 31) 2003 2004 2005Shareholders‘ capital 178 178 178Reserves (incl. currency conversion difference) 3,139 3,297 2,940Net income 529 888 1,491Total equity 3,846 4,363 4,609Minority interests 188 193 216Group equity 4,034 4,556 4,825Negative difference from acquisition of companies 0 0 0Provisions (incl. deferred taxes) 3,963 4,172 4,958Liabilities (incl. deferred charges) 2,145 1,902 2,235Total liabilities (incl. deferred taxes and deferred charges) 6,108 6,074 7,193Total liabilities and equity 10,142 10,630 12,018Comparison of Balance sheets2003 — 2012Summary of selected financial data 2003 2004 2005Net sales 7,382 8,157 9,535Operating income 901 1,372 1,923Operating income as % of net sales 12.2 16.8 20.2Income after taxes 537 908 1,514Income after taxes as % of net sales 7.3 11.1 15.9Return on shareholders‘ equity (in %) 15.0 23.1 34.2Equity ratio (in %) 37.9 41.0 38.4Cash flow 1,059 1,430 2,069Financial funds 3,516 4,015 4,585Personnel costs 2,252 2,443 2,671Personnel costs as % of net sales 30.5 29.9 28.0Average number of employees 34,221 35,529 37,406Research and development costs 1,176 1,232 1,360R & D as % of net sales 15.9 15.1 14.3Investments in tangible assets 516 427 532Depreciation of tangible assets 354 377 439

usiness year 2012financial data2006 2007 2008 2009 2010 2011 2012554 547 539 745 736 710 6822,886 2,972 3,177 3,219 3,314 3,442 3,1033,043 1,638 1,739 1,699 3,168 3,953 4,2226,483 5,157 5,455 5,663 7,218 8,105 8,0071,280 1,387 1,561 1,801 1,850 1,998 2,0953,137 2,912 3,496 3,663 4,047 4,652 4,814945 1,015 1,312 3,877 3,118 3,903 2,3745,362 5,314 6,369 9,341 9,015 10,553 9,28311,845 10,471 11,824 15,004 16,233 18,658 17,2902006 2007 2008 2009 2010 2011 2012178 178 178 178 178 178 1783,275 1,385 3,101 3,964 5,408 5,812 4,7631,722 1,809 1,424 1,759 888 1,476 1,2375,175 3,372 4,703 5,901 6,474 7,466 6,178188 167 190 179 0 0 05,363 3,539 4,893 6,080 6,474 7,466 6,1780 0 0 0 0 157 1344,641 4,726 5,120 5,731 6,598 7,402 7,7491,841 2,206 1,811 3,193 3,161 3,633 3,2296,482 6,932 6,931 8,924 9,759 11,035 10,97811,845 10,471 11,824 15,004 16,233 18,658 17,2902006 2007 2008 2009 2010 2011 201210,574 10,952 11,595 12,721 12,586 13,171 14,6912,140 2,100 1,980 2,239 1,896 2,272 1,85320.2 19.2 17.1 17.6 15.1 17.3 12.61,729 1,812 1,428 1,764 888 1,476 1,23716.4 16.5 12.3 13.9 7.1 11.2 8.437.4 35.0 42.2 37.4 15.0 22.8 16.643.7 32.2 39.8 39.3 39.9 40.0 35.72,317 2,392 1,997 2,409 2,234 2,378 2,2253,934 2,581 2,932 5,384 6,113 7,711 6,4672,836 2,886 3,004 3,221 3,358 3,664 4,02426.8 26.4 25.9 25.3 26.7 27.8 27.438,428 39,800 41,300 41,534 42,224 44,094 46,2281,574 1,900 2,109 2,215 2,453 2,516 2,79514.9 17.3 18.2 17.4 19.5 19.1 19.0596 654 665 630 519 458 562419 432 453 470 498 535 793

IF YOU HAVE ANY QUERIES OR COMMENTS,PLEASE CONTACT US.Boehringer Ingelheim GmbHBinger Strasse 17355216 IngelheimGermanyTelephone + 49 6132 77-0Fax + 49 6132 72-3000ContactCorporate Division CommunicationsE-mail webmaster@boehringer-ingelheim.comInternet www.boehringer-ingelheim.comIssued byBoehringer Ingelheim GmbHDesign and layoutmpm · Corporate Communication Solutionswww.digitalagentur-mpm.dePrinted bySüddeutsche Verlagsgesellschaft, UlmCopyright©Boehringer Ingelheim GmbH, 2013All rights reserved. No part of this Annual Report 2012 may be reproduced or transmittedin any form or by any means, electronic or photocopy, without permission in writing fromBoehringer Ingelheim GmbH. Figures from third parties used in the annual report are basedon data available at the time the financial statement was drawn up.

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