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Grünenthal press release 2012
Pain Specialist Grünenthal Continues to Successfully Implement Growth Strategy through Continued Transformation
Growth driven by innovative pain products and focused internationalization / Core business pain realized significant growth in 2011 / Double-digit revenue growth also in Latin America / Above-average investments in research and development
Aachen, April 23, 2012 – Adjusted revenues of Grünenthal Group increased by eight percent in 2011. The company achieved total revenues of 947 Mio. €, including milestone payments from R&D partnerships (2010: 910 Mio. € excluding milestone payments from R&D). This increase is driven in particular by growth in Grünenthal’s global pain brands, above all in the strategic growth drivers Palexia® (plus 26.7 Mio €) and Versatis® (plus 26.6 Mio. €). The INTACTM technology (Tamper Resistant Formulation Technology, TRF) that has been introduced in the USA under Grünenthal’s patent in 2010 has proven to be extremely successful in just its second year after being launched, resulting in a growth of royalties of 30 Mio. €. TRF technology makes it significantly more difficult to intentionally or unintentionally break or pulverize pain tablets without influencing the controlled release of the active ingredient. In addition, royalty income for Tapentadol, which Johnson & Johnson sells on the North American market under the trade name Nucynta®, increased by 7.1 Mio. €. Driven by the focusing of the product portfolio over the past few years, Grünenthal’s global pain brands represent 62 percent of global revenues already.
Income before tax (IBT) in the core business increased by 54 Mio. € in 2011. The Group IBT for 2011 of 127 Mio. € however was below the 2010 result (344 Mio. €). This is a result of lower one-off incomes from divestments of non-core businesses and was intended in order to invest into the launch of Palexia® in additional European countries as well as into research and development. These strategic measures, core of the long-term strategy VISION 2020, are aimed at sustaining independence as a family-owned innovative company.
Harald F. Stock, PhD., CEO of the Grünenthal Group, is very satisfied with the business development: “We have successfully implemented our focus strategy in 2011 and managed to compensate for lost revenues due to divestments. That is a great success. We can now launch the third phase of the transformation process that has been started in 2009. In this third phase we will be increasingly focus on growth. Our goal remains to achieve revenues of approximately 1.5 billion € by 2015.”
On Growth Path in Latin America
The international business grew over-proportionally and now accounts for 90 percent of total revenues of the Grünenthal group. Accounted on a Euro basis, Grünenthal increased revenues by 14 percent in Latin America in 2011. Based on local currencies, the revenue growth was even greater. Latin America contributed 16 percent of the total revenues in 2011.
Grünenthal aims to raise this share considerably to up to approx. 40 percent of the total revenues in the coming years. Expanding the presence in Brazil and Mexico by targeted acquisitions of companies and/or product portfolios is a key priority for this strategic development. “In order to successfully implement our growth strategy for the entire group within the VISION 2020 strategy, we will be investing further in Latin America. We have financial resources of about 800 Mio. € available to implement our plans. In addition to liquidity from our divestments, we will also secure further financial flexibility with a 300 Mio. € syndicated loan agreement”, said Grünenthal Group CFO & COO Stefan Genten talking about the goals set for 2012.
Targeted Investment in Innovation
The targeted investment in innovation continued to be a key pillar for Grünenthal Group’s development in 2011. R&D expenditures rose to 25 percent (2010: 23 percent) of revenues, putting them well above the industry average. In contrast to the overall downward trend for investments in research and development in the industry, Grünenthal continues to increase the commitment to innovation. For instance, roughly 100 Mio € is being strategically reinvested in research capacities at Grünenthal Campus in Aachen, Germany. By 2015, Grünenthal will have nearly doubled its research and development expenditures in comparison to 2009. “A strong pipeline and thus a constant stream of new products is what drives our business. Therefore, in the next years we want to keep the proportion of revenues invested in R&D above industry average. Our goal remains to launch one innovative product every five years, in order to become the innovation leader in the global pain segment”, explains CEO Harald F. Stock, PhD.
About Grünenthal
The Grünenthal Group is an independent, family-owned international research based pharmaceutical company headquartered in Aachen, Germany. Building on its unique position in pain, its objective is to become the most patient-centric company to be a leader in therapy innovation. Grünenthal is one of the last five research-oriented pharmaceutical corporations with headquarters based in Germany which sustainably invests in research and development. These investments amounted to about 25 % of revenues in 2011. Grünenthal’s research and development strategy concentrates on select fields of therapy and state-of-the-art technologies. We focus on the intensive search for new ways to treat pain better, more effectively and with fewer side-effects than before. Altogether, the Grünenthal Group has affiliates in 26 countries worldwide. Grünenthal products are sold in more than 155 countries and approx. 4,200 employees are working for the Grünenthal Group worldwide. In 2011, Grünenthal reached revenues of 947 Mio €. More information: www.grunenthal.com.
