Business Development by Segment and Region

Pharmaceuticals

Key Data – Pharmaceuticals

 

 

Q2 2015

Q2 2016

 

Change

 

H1 2015

H1 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

 

3,890

4,104

 

+5.5

+8.4

 

7,452

7,993

 

+7.3

+10.2

Change in sales

 

 

 

 

 

 

 

 

 

 

 

 

Volume

 

+8.5%

+9.6%

 

 

 

 

+7.9%

+11.1%

 

 

 

Price

 

+1.4%

–1.2%

 

 

 

 

+0.6%

–0.9%

 

 

 

Currency

 

+7.7%

–2.9%

 

 

 

 

+7.9%

–2.9%

 

 

 

Portfolio

 

–0.7%

0.0%

 

 

 

 

–0.7%

0.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

€ million

€ million

 

Reported %

Fx adj. %

 

€ million

€ million

 

Reported %

Fx adj. %

Sales by region

 

 

 

 

 

 

 

 

 

 

 

 

Europe

 

1,337

1,422

 

+6.4

+9.2

 

2,569

2,801

 

+9.0

+11.3

North America

 

1,009

1,027

 

+1.8

+4.3

 

1,908

2,016

 

+5.7

+6.6

Asia / Pacific

 

1,117

1,219

 

+9.1

+10.3

 

2,131

2,349

 

+10.2

+10.8

Latin America / Africa / Middle East

 

427

436

 

+2.1

+11.2

 

844

827

 

–2.0

+14.1

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA1

 

1,119

1,342

 

+19.9

 

 

2,180

2,603

 

+19.4

 

Special items

 

(74)

(10)

 

 

 

 

(98)

(10)

 

 

 

EBITDA before special items1

 

1,193

1,352

 

+13.3

 

 

2,278

2,613

 

+14.7

 

EBITDA margin before special items1

 

30.7%

32.9%

 

 

 

 

30.6%

32.7%

 

 

 

EBIT

 

772

988

 

+28.0

 

 

1,519

1,686

 

+11.0

 

Special items

 

(78)

(11)

 

 

 

 

(102)

(242)

 

 

 

EBIT before special items1

 

850

999

 

+17.5

 

 

1,621

1,928

 

+18.9

 

Gross cash flow2

 

807

871

 

+7.9

 

 

1,561

1,832

 

+17.4

 

Net cash flow2

 

491

310

 

–36.9

 

 

1,303

1,044

 

–19.9

 

Second quarter of 2016

Sales

Sales of Pharmaceuticals rose by an encouraging 8.4% (Fx & portfolio adj.) to €4,104 million in the second quarter of 2016. Our recently launched products continued their strong development. Xarelto™, Eylea™, Xofigo™, Stivarga™ and Adempas™ posted total combined sales of €1,332 million (Q2 2015: €1,051 million; Fx adj. +28.8%). Our Pharmaceuticals business expanded in all regions on a currency-adjusted basis.

Best-Selling Pharmaceuticals Products

 

 

Q2 2015

Q2 2016

 

Change

 

H1 2015

H1 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™

 

549

703

 

+28.1

+30.1

 

1,031

1,320

 

+28.0

+30.7

of which U.S.A.

 

88

103

 

+17.0

+17.7

 

166

189

 

+13.9

+14.0

Eylea™

 

301

418

 

+38.9

+40.9

 

554

790

 

+42.6

+44.5

of which U.S.A.1

 

0

0

 

.

.

 

0

0

 

.

.

Kogenate™ / Kovaltry™

 

299

280

 

–6.4

–5.6

 

560

576

 

+2.9

+3.4

of which U.S.A.

 

91

87

 

–4.4

–2.9

 

165

183

 

+10.9

+10.3

Mirena™ product family

 

270

258

 

–4.4

–0.8

 

502

506

 

+0.8

+2.9

of which U.S.A.

 

181

168

 

–7.2

–5.6

 

335

337

 

+0.6

+0.5

Nexavar™

 

231

221

 

–4.3

–2.0

 

427

434

 

+1.6

+3.9

of which U.S.A.

 

84

78

 

–7.1

–4.9

 

155

159

 

+2.6

+2.6

Betaferon™ / Betaseron™

 

222

196

 

–11.7

–8.7

 

430

386

 

–10.2

–8.3

of which U.S.A.

 

109

111

 

+1.8

+3.0

 

202

211

 

+4.5

+4.4

YAZ™ / Yasmin™ / Yasminelle™

 

174

166

 

–4.6

+0.9

 

355

338

 

–4.8

+2.0

of which U.S.A.

 

31

31

 

.

+2.6

 

64

71

 

+10.9

+11.0

Adalat™

 

168

161

 

–4.2

+1.0

 

330

321

 

–2.7

+2.8

of which U.S.A.

 

1

0

 

.

.

 

2

1

 

–50.0

–47.1

Aspirin™ Cardio

 

127

138

 

+8.7

+16.4

 

263

275

 

+4.6

+11.0

of which U.S.A.

 

0

0

 

.

.

 

0

0

 

.

.

Glucobay™

 

129

128

 

–0.8

+6.6

 

259

267

 

+3.1

+8.3

of which U.S.A.

 

1

1

 

.

.

 

1

2

 

.

.

Avalox™ / Avelox™

 

99

88

 

–11.1

–9.1

 

209

186

 

–11.0

–7.2

of which U.S.A.

 

0

0

 

.

.

 

0

0

 

.

.

Gadavist™ / Gadovist™

 

71

89

 

+25.4

+28.8

 

140

171

 

+22.1

+24.5

of which U.S.A.

 

22

27

 

+22.7

+26.4

 

43

54

 

+25.6

+24.1

Xofigo™

 

65

81

 

+24.6

+26.7

 

119

156

 

+31.1

+31.2

of which U.S.A.

 

45

56

 

+24.4

+24.9

 

86

106

 

+23.3

+23.1

Ultravist™

 

84

84

 

.

.

 

157

155

 

–1.3

+4.8

of which U.S.A.

 

1

2

 

.

.

 

3

3

 

.

.

Stivarga™

 

92

67

 

–27.2

–25.1

 

163

134

 

–17.8

–16.4

of which U.S.A.

 

48

33

 

–31.3

–29.7

 

94

68

 

–27.7

–27.4

Total best-selling products

 

2,881

3,078

 

+6.8

+10.1

 

5,499

6,015

 

+9.4

+12.4

Proportion of Pharmaceuticals sales

 

74%

75%

 

 

 

 

74%

75%

 

 

 

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

 

702

697

 

 

 

 

1,316

1,384

 

 

 

Sales by product

  • Our oral anticoagulant Xarelto™ once again posted encouraging sales gains, due mainly to volume increases in Europe and Japan. Business with Xarelto™ also developed positively in the United States, where it is marketed by a subsidiary of Johnson & Johnson.
  • We considerably raised sales of the eye medicine Eylea™ in all regions, particularly in Europe, Canada and Japan.
  • Fluctuations in the order volumes placed by our distribution partner resulted in lower sales of the blood-clotting medicines Kogenate™ / Kovaltry™.
  • Sales of the hormone-releasing intrauterine devices of the Mirena™ product family – Mirena™ and Jaydess™ / Skyla™ – were nearly level with the prior year despite lower volumes in the United States.
  • Business with our cancer drug Nexavar™ was slightly down against the prior-year level, particularly as a result of lower demand in the United States.
  • We registered an overall decline in sales of our multiple sclerosis product Betaferon™ / Betaseron™ that was attributable in part to weaker business performance in Europe.
  • Sales of our YAZ™ / Yasmin™ / Yasminelle™ line of oral contraceptives were roughly level with the prior-year quarter on a currency-adjusted basis. Positive development in China and the United States was offset by lower demand in Europe.
  • Sales increases for Adalat™ for the treatment of hypertension and coronary heart disease, Aspirin™ Cardio for secondary prevention of heart attacks and the oral diabetes treatment Glucobay™ resulted mainly from gains in China.
  • Sales of the antibiotic Avalox™ / Avelox™ fell as expected due to the expiration of its patent. Gratifying volume gains in China were not sufficient to offset the declines in nearly all other regions.
  • We achieved substantial volume gains in the United States and Japan with our MRI contrast agent Gadavist™ / Gadovist™.
  • Sales of our cancer drug Xofigo™ increased in the United States and Europe especially.
  • The growth in sales of our X-ray contrast agent Ultravist™ resulted from expanded volumes in Europe that were primarily attributable to a favorable competitive situation.
  • Sales of our cancer drug Stivarga™ receded substantially due to intensified competition in the United States. In the prior-year quarter, furthermore, we had benefited from the reversal of a rebate provision in France.
  • Sales of the pulmonary hypertension treatment Adempas™ amounted to €63 million (Q2 2015: €44 million; Fx adj. +45.3%) and 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 13.3% to €1,352 million in the second quarter of 2016. As expected, the earnings contributions from the very good business development stood against high investments in research and development. Currency effects of around €40 million had a diminishing effect.

EBIT grew by a robust 28.0% to €988 million, including special charges of €11 million (Q2 2015: €78 million) which largely resulted from efficiency enhancement programs.

First half of 2016

Sales

Sales of the Pharmaceuticals segment rose by 10.2% (Fx & portfolio adj.) in the first half of 2016, to €7,993 million. This increase was driven by our recently launched products Xarelto™, Eylea™, Stivarga™, Xofigo™ and Adempas™, which generated combined sales of €2,519 million (H1 2015: €1,948 million). Pharmaceuticals sales developed positively in all regions.

Earnings

EBITDA before special items improved by a substantial 14.7% in the first half of 2016, to €2,613 million, driven by very good business performance. At the same time, 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 11.0% to €1,686 million, including special charges of €242 million (H1 2015: €102 million). These mainly comprised €231 million for impairment losses on intangible assets (Essure™).