Boehringer Ingelheim charts strong growth in livestock meds ahead of Merial union

Piglets in a barn

Pharma giant Boehringer Ingelheim, which is in the process of merging its Vetmedica unit with Sanofi’s ($SNY) Merial division, reported strong results in animal health for 2015. Net sales were up 10% year-over-year to €1.4 billion ($1.6 billion), and the unit contributed 9% to the company’s total revenues, it announced on April 19.

That puts BI in a position of strength as it works to finalize the marriage with Merial. Together they will be the second-largest animal health company behind Zoetis ($ZTS) with combined sales of €3.9 billion ($4.4 billion). Sanofi is trading Merial for BI’s consumer health business in a deal that’s expected to close in the fourth quarter.

BI’s livestock division performed especially well last year, as strong demand for the swine vaccine Ingelvac Circoflex pushed sales of the product up 4% on a currency-adjusted basis to €281 million ($317.9 million), according to a press release announcing earnings. Overall, the livestock unit grew 12%, the company said.

BI has been working to boost its presence in companion animal health, as well. Its vaccine for dogs, Duramune, turned in strong performance last year, with sales up 7.5% to €88 million ($99.5 million). Meanwhile, the company has made some moves to improve its efficiency, including selling off a plant in Fort Dodge, Iowa, to New Zealand-based Argenta. It is also investing $60 million in a nearby manufacturing facility and a research center in Ames, Iowa.

The merger with Merial will greatly expand BI’s presence in companion animal health, adding 13 new R&D centers and a slate of well-known products. Merial’s top brands include Heartgard to prevent heartworm in dogs and the Purevax line of vaccines for cats. The company’s hotly demanded flea-and-tick fighting pill, NexGard, will launch BI into the fast-growing market for chewable alternatives to topical parasite repellants.

"Boehringer Ingelheim's strategic priority is to focus on the company's core areas of expertise and businesses with an established global scale, or where a pathway to a global scale can be achieved and prioritized among Boehringer Ingelheim's portfolio opportunities," said Andreas Barner, chairman of BI's board, when the Merial merger was announced in December. "Our combined Animal Health business would be well positioned for growth and emergence as a leader globally."

- here’s the earnings release

Related Articles:
Sanofi, Boehringer to create new animal health giant in $12.5B asset swap
Boehringer Ingelheim unloads vet plant in Iowa to contract manufacturer
Sanofi explores cost-cutting 'options' for Merial