Boehringer makes classic early foray as crucial late-stage data looms

Boehringer Ingelheim announced a very early stage but high value research deal with Vitae Pharmaceuticals yesterday, paying $42m upfront for access to the private US company’s beta-secretase inhibitors, a major area of work in the Alzheimer’s disease field. The move is typical of the private German group which, despite its size, is not a big licensor or acquirer of products.

When it does make a move, the preference is clearly on early stage projects, with over half its 32 deals in the last 10 years struck for pre-clinical or research project candidates (see table below). This strategy has served Boehringer well and the company has grown rapidly since the turn of the century, becoming the world’s 12th biggest seller of prescription and over-the-counter drugs last year, with a turnover of $15bn. Phase III data due on a key product in a couple of months time will be crucial in determining whether that growth rate continues.

Count of Boehringer's Product Deals per Year (since 1999)
Product Count Disclosed Deal Value ($m)
Marketed 2 -
Phase III 2 -
Phase II 3 -
Phase I 1 -
Pre-clinical 7 641
Research project 17 2,703
Report Total 32 3,344

The product is the oral anti-coagulant Pradaxa, which was first launched in Europe in April last year, approved to prevent blood clots in patients undergoing knee or hip transplants. As the first of a new class of oral anti-clot drugs to reach the market in Europe, competing with huge and entrenched products like Sanofi-Aventis’ $4bn blockbuster Lovenox and generic warfarin, a fair degree of success for the product is anticipated.

However, to really compete a broader label will be required, encompassing cardiovascular indications such as atrial fibrillation and heart attack. Results from the huge RE-LY trial, examining stroke prevention in patients with atrial fibrillation, will be the first real indication of the drug’s safety and efficacy in these populations. Top-line results are expected to be presented at the European Society of Cardiology Congress, which is taking place from August 29 to September 2. The study compared two doses of the drug against warfarin in 18,113 patients.

A broader label in Europe will be sought on the back of the trial, and more crucially, a US filing will be made.

In the US another oral anti-coagulant, Xarelto, has already started the approval process, receiving a complete response letter at the end of May. It will be marketed by Johnson & Johnson in the US, and in Europe Bayer is already selling the drug, in the same patient population as Pradaxa.

In fact, the space is looking decidedly crowded with several new anti-thrombotics nearing the market; Eli Lilly and Daiichi Sankyo's Efient is another candidate that analysts believe has blockbuster potential. However, with risk of bleeding a major worry for all the candidates so far and the US seemingly reluctant to give a green light to these new treatments, how the market looks a few years from now is still a matter of debate (Therapeutic focus – Anti-thrombotic market in need of more deals, February 12, 2009).

Full pipeline

Although Pradaxa is by far Boehringer’s most important new product, the company still has a respectable pipeline of seven candidates in phase III and six in phase II. The deal struck with Vitae adds to its CNS portfolio, which appears to be a key area of research, specifically in neuroscience with Alzheimer’s and Parkinson’s both featuring. Still, other than a phase III Parkinson’s product, Sifrol, research is at an early stage. Vitae’s beta-secretase inhibitors join Ablynx’s nanobodies in Boehringer’s research labs, following another very early stage deal struck in 2007.

Reflecting the wider world, however, oncology appears to be receiving a large slice of Boehringer’s R&D euros, with 12 disclosed projects. With two novel and promising compounds in phase III non-small cell lung cancer studies, the company could soon be generating its first cancer drug sales; Boehringer currently does not have any oncology products on the market.

This begs the question whether a partner will be sought for these products. Despite its reticence over in-licensing, the group’s biggest selling product, the COPD drug Spiriva, is partnered with Pfizer, suggesting management might not be totally averse to the idea.

Being private the company can disclose its strategy and what it is working on as and when it desires; the announced pipeline is unlikely to be complete and even then points to plenty of firepower. If Pradaxa manages to succeed where other anti-thrombotics fail, and the company’s larger and public peers keep buying each other, Boehringer could theoretically see itself join the top ten in the not too distant future.

Rx & OTC Pharmaceuticals Sales WW sales ($m) Market Rank
2000 2008 CAGR (00 - 08) 2000 2008
          Pfizer+Wyeth  32,385  59,012  8%  1  1
          Merck+Schering-Plough  27,564  42,305  6%  2  2
          Sanofi-Aventis  5,106  41,444  30%  15  3
          GlaxoSmithKline  25,587  40,472  6%  3  4
          Novartis  12,944  37,462  14%  8  5
          Roche  10,476  33,247  16%  10  6
          AstraZeneca  15,187  30,306  9%  4  7
          Johnson & Johnson  14,946  25,671  7%  6  8
          Eli Lilly  10,048  18,556  8%  11  9
          Bayer AG  6,872  18,026  13%  14  10
          Abbott Laboratories  6,886  17,174  12%  13  11
          Boehringer Ingelheim  4,643  14,939  16%  16  12
          Bristol-Myers Squibb  13,917  14,349  0%  7  14
          Takeda  8,052  13,071  6%  12  15

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