Business Development by Segment

Pharmaceuticals

Key Data – Pharmaceuticals

 

 

Q3 2015

Q3 2016

 

Change

 

9M 2015

9M 2016

 

Change

 

 

€ million

€ million

 

Reported %

Fx & p adj. %

 

€ million

€ million

 

Reported %

Fx & p adj. %

2015 figures restated; Fx & p adj. = currency- and portfolio-adjusted; Fx adj. = currency-adjusted

1

For definition see “Calculation of EBIT(DA) Before Special Items.”

2

For definition see “Statements of Cash Flows.”

Sales

 

3,870

4,152

 

+7.3

+7.6

 

11,322

12,145

 

+7.3

+9.3

Change in sales

 

 

 

 

 

 

 

 

 

 

 

 

Volume

 

+11.2%

+6.9%

 

 

 

 

+9.1%

+9.6%

 

 

 

Price

 

–0.3%

+0.7%

 

 

 

 

+0.3%

–0.3%

 

 

 

Currency

 

+3.3%

–0.3%

 

 

 

 

+6.3%

–2.0%

 

 

 

Portfolio

 

–0.4%

0.0%

 

 

 

 

–0.6%

0.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

€ million

€ million

 

Reported %

Fx adj. %

 

€ million

€ million

 

Reported %

Fx adj. %

Sales by region

 

 

 

 

 

 

 

 

 

 

 

 

Europe

 

1,314

1,415

 

+7.7

+10.4

 

3,883

4,216

 

+8.6

+10.9

North America

 

1,057

1,071

 

+1.3

+1.8

 

2,965

3,087

 

+4.1

+4.8

Asia / Pacific

 

1,067

1,223

 

+14.6

+9.3

 

3,198

3,572

 

+11.7

+10.4

Latin America / Africa / Middle East

 

432

443

 

+2.5

+9.0

 

1,276

1,270

 

–0.5

+12.3

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA1

 

1,246

1,416

 

+13.6

 

 

3,426

4,019

 

+17.3

 

Special items

 

(7)

(5)

 

 

 

 

(105)

(15)

 

 

 

EBITDA before special items1

 

1,253

1,421

 

+13.4

 

 

3,531

4,034

 

+14.2

 

EBITDA margin before special items1

 

32.4%

34.2%

 

 

 

 

31.2%

33.2%

 

 

 

EBIT

 

940

1,097

 

+16.7

 

 

2,459

2,783

 

+13.2

 

Special items

 

(7)

(6)

 

 

 

 

(109)

(248)

 

 

 

EBIT before special items1

 

947

1,103

 

+16.5

 

 

2,568

3,031

 

+18.0

 

Gross cash flow2

 

857

998

 

+16.5

 

 

2,418

2,830

 

+17.0

 

Net cash flow2

 

943

998

 

+5.8

 

 

2,246

2,042

 

–9.1

 

Third quarter of 2016

Sales

Sales of Pharmaceuticals rose by an encouraging 7.6% (Fx & portfolio adj.) to €4,152 million in the third quarter of 2016. Our recently launched products showed continued strong development. Xarelto™, Eylea™, Xofigo™, Stivarga™ and Adempas™ posted total combined sales of €1,395 million (Q3 2015: €1,082 million; Fx adj. +28.3%). Our Pharmaceuticals business expanded in all regions on a currency-adjusted basis.

Best-Selling Pharmaceuticals Products

 

 

Q3 2015

Q3 2016

 

Change

 

9M 2015

9M 2016

 

Change

 

 

€ million

€ million

 

Reported %

Fx adj. %

 

€ million

€ million

 

Reported %

Fx adj. %

Fx adj. = currency-adjusted

1

Marketing rights owned by Regeneron Pharmaceuticals Inc., U.S.A.

Xarelto™

 

571

772

 

+35.2

+34.4

 

1,602

2,092

 

+30.6

+32.1

of which U.S.A.

 

105

139

 

+32.4

+31.8

 

271

328

 

+21.0

+20.9

Eylea™

 

320

409

 

+27.8

+26.5

 

874

1,199

 

+37.2

+37.9

of which U.S.A.1

 

0

0

 

.

.

 

0

0

 

.

.

Kogenate™ / Kovaltry™

 

309

302

 

–2.3

–2.4

 

869

878

 

+1.0

+1.4

of which U.S.A.

 

113

105

 

–7.1

–6.5

 

278

288

 

+3.6

+3.5

Mirena™ product family

 

240

269

 

+12.1

+13.2

 

742

775

 

+4.4

+6.3

of which U.S.A.

 

163

186

 

+14.1

+15.0

 

498

523

 

+5.0

+5.2

Nexavar™

 

234

212

 

–9.4

–9.3

 

661

646

 

–2.3

–0.8

of which U.S.A.

 

85

73

 

–14.1

–13.5

 

240

232

 

–3.3

–3.1

Betaferon™ / Betaseron™

 

204

163

 

–20.1

–19.7

 

634

549

 

–13.4

–12.0

of which U.S.A.

 

108

81

 

–25.0

–24.2

 

310

292

 

–5.8

–5.5

YAZ™ / Yasmin™ / Yasminelle™

 

183

181

 

–1.1

+0.5

 

538

519

 

–3.5

+1.5

of which U.S.A.

 

45

36

 

–20.0

–20.8

 

109

107

 

–1.8

–2.0

Adalat™

 

151

156

 

+3.3

+5.4

 

481

477

 

–0.8

+3.6

of which U.S.A.

 

1

0

 

.

.

 

3

1

 

–66.7

.

Aspirin™ Cardio

 

130

128

 

–1.5

+1.7

 

393

403

 

+2.5

+7.9

of which U.S.A.

 

0

0

 

.

.

 

0

0

 

.

.

Glucobay™

 

122

125

 

+2.5

+8.0

 

381

392

 

+2.9

+8.2

of which U.S.A.

 

0

0

 

.

.

 

1

2

 

+100.0

.

Avalox™ / Avelox™

 

84

86

 

+2.4

+8.8

 

293

272

 

–7.2

–2.6

of which U.S.A.

 

4

4

 

.

.

 

4

4

 

.

.

Gadavist™ / Gadovist™

 

71

87

 

+22.5

+19.9

 

211

258

 

+22.3

+23.0

of which U.S.A.

 

22

26

 

+18.2

+18.9

 

65

80

 

+23.1

+22.4

Xofigo™

 

69

85

 

+23.2

+25.4

 

188

241

 

+28.2

+29.1

of which U.S.A.

 

49

60

 

+22.4

+22.5

 

135

166

 

+23.0

+22.9

Ultravist™

 

78

81

 

+3.8

+6.8

 

235

236

 

+0.4

+5.5

of which U.S.A.

 

1

1

 

.

+39.3

 

4

4

 

.

.

Stivarga™

 

73

64

 

–12.3

–11.1

 

236

198

 

–16.1

–14.8

of which U.S.A.

 

44

32

 

–27.3

–25.5

 

138

100

 

–27.5

–26.8

Total best-selling products

 

2,839

3,120

 

+9.9

+10.6

 

8,338

9,135

 

+9.6

+11.8

Proportion of Pharmaceuticals sales

 

73%

75%

 

 

 

 

74%

75%

 

 

 

Total best-selling products in U.S.A.

 

740

743

 

 

 

 

2,056

2,127

 

 

 

Sales by product

  • We once again posted strong sales growth with our oral anticoagulant Xarelto™, due mainly to volume increases in Europe and Japan. We also registered encouraging gains with Xarelto™ in the United States, where it is marketed by a subsidiary of Johnson & Johnson.
  • We considerably raised sales of the eye medicine Eylea™ year on year, due particularly to good business performance in Europe and Canada.
  • Fluctuations in the order volumes placed by our distribution partner resulted in slightly lower sales of the blood-clotting medicines Kogenate™ / Kovaltry™.
  • We posted strong sales gains for the hormone-releasing intrauterine devices of the Mirena™ product family – Mirena™ and Jaydess™ / Skyla™ – due particularly to positive price development in the United States.
  • Business with our cancer drug Nexavar™ was noticeably down against the prior-year level, particularly as a result of increased competitive pressure in the United States.
  • Sales of our multiple sclerosis product Betaferon™ / Betaseron™ receded significantly, mainly because of a weaker business performance in the United States and Europe.
  • Sales of our YAZ™ / Yasmin™ / Yasminelle™ line of oral contraceptives were level with the prior-year quarter on a currency-adjusted basis. Higher demand in Russia and China was offset by weaker development in the United States.
  • Sales increases for Adalat™, our product to treat hypertension and coronary heart disease, resulted primarily from higher volumes in China.
  • We posted slight growth in sales of Aspirin™ Cardio for secondary prevention of heart attacks that was largely attributable to the business in Latin America.
  • Business with our oral diabetes treatment Glucobay™ and our antibiotic Avalox™ / Avelox™ continued to benefit from high demand in China.
  • The strong growth in sales of our MRI contrast agent Gadavist™ / Gadovist™ was attributable to significant volume gains in Japan and the United States.
  • Sales of our cancer drug Xofigo™ increased substantially, especially in the United States and Europe.
  • We posted growth in sales of our X-ray contrast agent Ultravist™, due particularly to expanded volumes in Europe.
  • Sales of our cancer drug Stivarga™ receded noticeably due to intensified competition in the United States.
  • Sales of the pulmonary hypertension treatment Adempas™ amounted to €65 million (Q3 2015: €49 million; Fx adj. +30.5%) and, as previously, reflected the proportionate recognition of the one-time payment resulting from the sGC collaboration with Merck & Co., United States. Business developed positively, especially in the United States.

Earnings

EBITDA before special items of Pharmaceuticals increased by a substantial 13.4% to €1,421 million in the third quarter of 2016, although investment in research and development remained disproportionately high. One factor in this earnings growth was the very good development of business, particularly for our recently launched products. Another factor was our success in keeping selling expenses at around the same level year on year.

EBIT grew by a robust 16.7% to €1,097 million, including special charges of €6 million (Q3 2015: €7 million) that largely resulted from efficiency improvement programs.

First nine months of 2016

Sales

Sales of the Pharmaceuticals segment rose by 9.3% (Fx & portfolio adj.) in the first nine months of 2016, to €12,145 million. This increase was driven by our recently launched products Xarelto™, Eylea™, Stivarga™, Xofigo™ and Adempas™, which generated combined sales of €3,913 million (9M 2015: €3,031 million). Pharmaceuticals sales developed positively in all regions.

Earnings

EBITDA before special items improved by a robust 14.2% in the first nine months of 2016, to €4,034 million, driven by very good business performance. As expected, higher investments in research and development as well as negative currency effects of around €80 million had a diminishing effect.

EBIT advanced by a substantial 13.2% to €2,783 million, including special charges of €248 million (9M 2015: €109 million). These mainly comprised €231 million for impairment losses on intangible assets (Essure™).