C.H. Boehringer Sohn

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C.H. Boehringer Sohn

Binger Strasse 173
D-55216 Ingelheim
Germany
Telephone: (49) (6132) 77-0
Fax: (49) (6132) 77-3000
Web site: http://www.boehringer-ingelheim.com

Private Company
Incorporated: 1885 as Albert Boehringer, Chemische Fabrik, Nieder-Ingelheim a. Rhein
Employees: 26,448
Sales: DM 9.94 billion ($5.07 billion) (1999)
NAIC: 551112 Offices of Other Holding Companies; 325412 Pharmaceutical Preparation Manufacturing

C.H. Boehringer Sohn is the holding company for Boehringer Ingelheim GmbH, which is among the top 20 international research-based pharmaceuticals manufacturers. The company offers prescription drugs for diseases of the human respiratory, cardiovascular, gastrointestinal, and central nervous systems, cancer, and HIV treatments. Boehringer Ingelheim also makes over-the-counter drugs, veterinary vaccines and antibiotics, and bulk pharmaceutical chemicals. Based in Germany, the group consists of about 140 companies all over the world, including 40 R&D and production facilities in 20 countries. A total of 86 percent of Boehringer Ingelheim’s sales comes from abroad. The firm is owned by the Boehringer and von Baumbach families.

Beginnings in the Early 19th Century

It was 1817 when German entrepreneurs Christian Friedrich Boehringer and Christian Gotthold Engelmann set up a chemicals trade and production business in the German city of Stuttgart. They renamed the materials trading company B.F. Balzische Material-Waren-Handlung, which they had bought from relatives, Engelmann & Boehringer and started trading chemicals such as quinine, morphine, and tartaric acid. Engelmann & Boehringer’s own chemical products were ether, santonin, and chloroform. After 42 years Engelmann retired as business partner, leaving Christian Friedrich Boehringer and his two sons Christian Gottfried and Christoph Heinrich as the owners of the firm. Renamed C.F. Boehringer & Söhne, the company employed 15 people in 1859. By 1871 Christoph Heinrich Boehringer was the only surviving member of the three family partners and became sole proprietor of the firm, which moved to Mannheim a year later. When Christoph Heinrich Boehringer died in 1882, his eldest son Ernst took over the company. Ernst Boehringer’s younger brother Albert studied chemistry in Munich after an apprenticeship at a Mannheim pharmacy. Inspired by his older brother, Albert acquired a small chemical plant in Lower Ingelheim on the Rhine in summer 1885. On July 31 that facility was officially registered in Bingen as Albert Boehringer, Chemische Fabrik, Nieder-Ingelheim a. Rhein (Chemical Factory, Lower Ingelheim on the Rhine). Boehringer Ingelheim was born.

Starting out with 28 employees, Boehringer Ingelheim produced tartaric acid and salts made using it. The demand for tartaric acid was rising, a result of the invention of baking powder and lemon soda. Taking advantage of this development, Boehringer Ingelheim started making better quality tartaric acid that could be used in the food processing industry. Struggling with high production costs and the growing competition, however, the 1880s were tough years for Boehringer Ingelheim. When Albert Boehringer’s brother Ernst died in 1892, the family of his business partner Friedrich Engelhorn became the owner of C.F. Boehringer & Söhne in Mannheim. Albert Boehringer changed the name of his company to C.H. Boehringer Sohn, Chemische Fabrik, Nieder-Ingelheim a. Rhein (Chemical Factory, Lower Ingelheim on the Rhine). To avoid confusion between the two names, the parties agreed to include the locations Mannheim and Ingelheim in the company names.

In the early 1890s Alfred Boehringer started experimenting with citric acid. Rather by accident Boehringer Ingelheim invented a technology for the production of technical grade lactic acid when a fermentation batch for citric acid heated up too quickly and lactic acid bacteria formed in the nutritive solution. Boehringer Ingelheim began mass producing lactic acid with the new technology while further experiments with citric acid were put on the back burner. At the same time, a market had to be developed for the new product, which at the time was practically nonexistent. By 1905, however, the demand was so high that a new production plant was erected. Boehringer Ingelheim’s technical grade lactic acid was used for dying leather and textiles while food quality lactic acid was in demand by the food and beverage industries. One example was Chabesco, a refreshing drink that had lactic acid among its ingredients.

Adding Pharmaceuticals in the Early 20th Century

Around 1900 Boehringer Ingelheim expanded its business and started producing basic substances used by pharmacies and in the pharmaceutical industry, such as morphine, codeine, and, later, atropine. It was also in the first years of the 20th century when Albert Boehringer introduced a number of social programs for his staff. Health insurance was introduced in 1902. Apartments for Boehringer Ingelheim employees were built between 1907 and 1909 and a workers compensation program was initiated. Beginning in 1910 the company granted every employee who had worked a specific length of time up to 14 paid annual vacation days and a travel allowance. To make sure that the workers really went on vacation, Albert Boehringer—who knew every employee—insisted that they send him a postcard from their holiday destination. By 1910 the company had acquired a reputation in the region and employed 157 people.

In the second decade of he 20th century Boehringer Ingelheim intensified its activities in the growing market for Pharmaceuticals. In 1912 the company started testing a painkiller based on several opium alkaloids. Three years later the drug was introduced to the market under the name Laudanon. Picking up the latest industry trend Boehringer Ingelheim offered the drug pre-packaged and pre-dosed in various forms such as tablets, ampoules, syrup, solution, or powder. Although the product was packaged in Ingelheim, the drug was pressed into tablets and filled into ampoules in another company in Frankfurt/Main. Laudanon was a failure on the market. The specialties working group that had been created to develop the drug, however, became the foundation for Boehringer Ingelheim’s pharmaceutical product division.

When World War I broke out in 1914 Albert Boehringer was required to manage a medical company for the German war economy. His nephew Robert Boehringer successfully managed Boehringer Ingelheim during the war years. It was during this time, in 1915, that the company’s research division was started, growing out of Robert Boehringer’s cooperation with two cousins of Albert Boehringer: chemistry professor Heinrich Wieland, who in 1927 would receive the Nobel Prize for Chemistry, and pharmacology professor Hermann Wieland. One of the first results of Heinrich Wieland’s research was Boehringer Ingelheim’s production of bile acid, which started in 1917. In the following years two products were developed based on bile acid—Cadechol and Perichol. The two remedies, which were used to fight chronic cardiovascular damage and angina pectoris, were introduced in the early 1920s. They were followed by the respiratory analeptic Lobelin, which became a huge medical success. Its active ingredient, an alkaloid, was first extracted from the plant lobelia inflata and later chemically synthesized, based on research by Heinrich Wieland.

The 1920s turned out to be difficult for Boehringer Ingelheim. While the German economy was being shaken by the post-World War I hyperinflation, the company issued its own emergency currency. When France occupied the Rhineland in 1923, Albert Boehringer decided to leave Ingelheim and move to Hamburg to set up a second company location. In 1924 the Pharmaceutical Specialties group was moved to Hamburg and a year later production of opiates started in a brand new plant.

World War II and the Postwar Years

The economic downturn at the beginning of the 1930s coincided with a generation change in Boehringer Ingelheim’s top management. The founder’s two sons—Albert and Ernst—together with the founder’s son-in-law Julius Liebrecht, who had entered the company management in the 1920s, took over new responsibilities. Albert Boehringer, who had studied business administration, was given responsibility for the Alkaloid Department, Pharmaceutical Chemicals, and Purchasing. His brother Ernst, a chemist, focused on pharmaceutical specialties, and Liebrecht managed the Acid Department. The three worked together very well and were able to steer the company successfully through the rough waters before and after World War II. Company founder Albert Boehringer died in spring 1939, just a few months before World War II broke out.

Company Perspectives:

Boehringer Ingelheim’s corporate vision is founded on five key principles; statements which together form a shared ambition and worldwide commitment. Change is our opportunity: Without change there can be no progress. Value will be our competitive advantage: In a competitive world, we expect our customers constantly to demand more for less. Innovation in everything will be our challenge: We will only deliver outstanding value to our customers if we are innovative in everything we do. Waste is our enemy: We need to have one of the lowest cost bases in the industry, if we are to deliver outstanding value to our customers. Our distinctive character is our strength: We are worldwide and measure ourselves against world class standards. Yet we are also a corporation with family traditions in which people are valued as individuals. Collectively, the principles add up to Value through Innovation, the vision which strengthens Boehringer Ingelheim’s business worldwide and keeps it more competitive.

The continuing work in the field of pharmaceutical specialties yielded positive results during this period of time, however. To stabilize sales the company started building a brand name by adding “Ingelheim” to all of its pharmaceutical products, such as codeine, caffeine, and theobromine. Packaged in a ready-to-use form such as tablets and ampoules, they became known as the “Ingelheim packs.” Boehringer Ingelheim also developed successful brand name drugs, such as the two cough remedies, Codyl Syrup and Acedicon, and the cardiovascular symphathomimetic sympatol. The biggest success was Aludrin, a drug used in bronchial asthma and spastic bronchitis, which was introduced to the market in 1941. One year later Boehringer Ingelheim started making synthetic caffeine using a technology that was developed by company chemists in the 1930s. This made the company independent from imported ingredients for natural caffeine production. In March 1945 Ingelheim was occupied by American troops. Undamaged by the war, however, the company resumed production in May after being forced to close down for two months. To secure the necessary raw materials in those difficult times, a so-called procurement department was established; sometimes bartering baking powder, citric acid, or Ingelheim wine was the only way to obtain the necessary raw materials. After five years of negotiations and petitions, the company finally received a letter in June 1949, confirming that Boehringer Ingelheim had been removed from the list of companies included in war reparations and hence would not be dismantled.

Aside from setting up the old production lines again, the company continued to successfully develop and market new pharmaceutical specialties in the postwar years. The number of employees in the Pharmaceutical Specialties Department grew fivefold from 23 in early 1946 to 125 in 1953. As a result, pharmaceutical sales grew in the following years, from DM 11.6 million in 1950 to DM 23.3 million five years later. In the early 1950s Boehringer Ingelheim started marketing the pharmaceutical products of the American drug maker Chas. Pfizer & Co. in Germany, in particular their new antibiotics Terramycin, Streptomycin, and Tetrazyn. The two companies worked together until the early 1960s when Pfizer established its own German subsidiary. For a short period Boehringer Ingelheim also distributed insulin products from a Danish drug maker after the war. Another venture the company began in those years was its subsidiary Dr. Karl Thomae GmbH in Winnenden, a company with a considerable market share in the market for opiates. It was acquired by Albert Boehringer from chemist Dr. Karl Thomae in 1927. In 1946 Thomae introduced several special drugs, including the successful analgesic Thomapyrin. Three years later Thomae started producing and distributing pharmaceutical specialties for Swiss drug maker J.R. Geigy. The new activity, which resulted from a close friendship of Geigy manager Dr. Karl Koechlin and the top managers from Boehringer Ingelheim, gave Thomae’s business a huge boost.

Building an International Network in the 1960s and 1970s

As early as in the 1930s Boehringer Ingelheim had exported their pharmaceutical specialties to a number of foreign countries, primarily in Europe. Foreign markets did not play an important role for the company after World War II, however, until after the currency reform in Germany in 1948. The first foreign subsidiary that represented a wide range of Boehringer Ingelheim products, the Bender & Co. GesmbH in Vienna, Austria, was established in the 1950s. Bender also expanded business into Eastern Europe and was responsible for Boehringer Ingelheim’s pharmaceutical business in Switzerland. In the late 1950s Boehringer Ingelheim established a subsidiary, a research lab, and production plant and bought a plantation in Spain.

During the 1960s and 1970s Boehringer Ingelheim wove together a network of international subsidiaries that spanned the whole world. The company’s international expansion always followed the same pattern. First, Boehringer Ingelheim products were marketed by another pharmaceutical company or their agent in a particular country. Next, a company subsidiary was established that mainly channeled scientific information to doctors and hospitals about Boehringer Ingelheim products. When sales reached a certain level, a production plant was set up. Countries where Boehringer Ingelheim established subsidiaries included Portugal, Italy, France, the United Kingdom, Belgium, The Netherlands, Sweden, Denmark, and Greece in Western Europe; Argentina, Brazil, and Columbia in Latin America; Japan, Korea, Taiwan, Philippines, Indonesia, and Thailand in Asia; South Africa, Senegal, and Kenya in Africa; as well as in Australia and New Zealand.

The cooperation with American drug maker Chas. Pfizer & Co. after World War II had provided Boehringer Ingelheim with valuable know-how about American business practice. In the 1950s the two companies worked together in other countries. In the United States Boehringer Ingelheim products were distributed for a long time by Geigy’s American branch. In 1970 Boehringer Ingelheim Ltd. was established in the state of New York and later moved to Ridgefield, Connecticut, where the construction of a research center began in the mid-1970s. A Canadian subsidiary was established in Montreal, Québec in 1973 and moved to Burlington, Ontario, in 1978.

Key Dates:

1885:: Albert Boehringer’s company is officially registered.
1900:: Boehringer Ingelheim starts making basic chemicals for Pharmaceuticals.
1923:: Albert Boehringer leaves the occupied Rhineland and sets up shop in Hamburg.
1927:: Albert Boehringer acquires Winnenden-based Dr. Karl Thomae GmbH.
1935:: A technology for mass producing citric acid based on fermentation with fungi is developed.
1941:: Asthma remedy Aludrin is successfully introduced to the market.
1946:: Thomae introduces the analgesic Thomapyrin.
1950s:: The company’s international expansion starts in Europe.
1970:: Boehringer Ingelheim’s first subsidiary in the United States is founded.
1991:: CEO Hubertus Liebrecht dies.
1992:: Erich von Baumbach, son-in-law of Albert Boehringer, Jr., becomes CEO.
1998:: A new organizational structure is established.
1999:: Ben Venue Laboratories in Bedford, Ohio is acquired.

Boehringer Ingelheim in the 1980s and 1990s

At the beginning of the 1980s Boehringer Ingelheim had evolved as a research-driven developer and producer, with a worldwide reputation, primarily of prescription drugs for humans. By the end of 1983 Boehringer Ingelheim held 870 patents. This was the result of a systematic investment in research and development activities over several decades. In 1963 the company invested DM 20 million in R&D; 20 years later the number had risen 25-fold to DM 500 million. The number of R&D staff tripled within about the same period of time, from 1,000 in 1963 to more than 3,000 in 1985. About one third of them worked at Boehringer Ingelheim’s subsidiary Dr. Karl Thomae GmbH in Biberach, and the others worked in the company’s research centers in Vienna, Austria; Kawanishi, Japan; Milan, Italy; and Ridgefield in the United States. Pharmaceutical research concentrated on treatments for cardiovascular, respiratory, and gastroenterological ailments. Some of Boehringer Ingelheim’s successful products were Persantin, a coronary therapeutic agent used to prevent the development of thrombosis; Viramune, a drug to fight AIDs; and Sifrol, for the treatment of Parkinson’s disease.

Aside from these activities, research was done over the years in other fields such as veterinary pharmaceuticals, baking aids, cosmetics, and pesticides. None of these areas became a major business activity for Boehringer Ingelheim, however, when compared with human pharmaceuticals. As a result, the company withdrew from most of those sectors in the 1980s and 1990s. Its pesticide plant in Hamburg-Moorfleet was closed down after government officials required the installation of environmentally friendlier waste disposal technologies, which would have called for substantial investment. In addition, after a boom in the 1970s and early 1980s the company’s sales share from chemical production fell continuously in the 1990s. The production of citric acid was dropped completely in the early 1980s. In 1991, 9.6 percent of Boehringer Ingelheim’s total sales derived from chemicals. Half of the company’s ten production facilities for chemicals worldwide were closed down in the 1990s. In 1999 Boehringer Ingelheim transferred its marketing activities to the food, cosmetics, and chemical industries to Purac Deutschland GmbH, a subsidiary of Dutch Purac Biochem bv, the world’s largest producer of lactic acid.

Another strategic decision for the company was to focus intensively on the world’s largest market for drugs—the United States. In part due to more restrictive laws in Boehringer Ingelheim’s home country, Germany became the company’s third largest market for pharmaceuticals, behind the United States and Japan. Cooperative ventures were begun with La Jolla, California-based Sequana Therapeutics Inc. in genetic asthma research; with Carlsbad, California-based Isis Pharmaceuticals Inc. to develop agents used to treat organ transplant complications; with the two New York-based cancer research institutes Ludwig Institute for Cancer Research and Sloan-Kettering Institute on the development of new drugs against cancer; with Cambridge, Massachusetts-based Cambridge Neuroscience on a drug to treat stroke and brain injuries; and with Genetronics Biomedical Ltd. in San Diego, California, in certain areas of gene therapy. In 1999 Boehringer Ingelheim also acquired Ben Venue Laboratories, based in Bedford, Ohio, which was America’s oldest producer of sterile pharmaceutical goods.

The company’s new strategic orientation, with focus on prescription and nonprescription drugs for humans and the United States as a strategic market, was accompanied by changes in the organizational structure of Boehringer Ingelheim. Research activities in Germany were concentrated at Thomae in Biberach, and production was carried out primarily in Ingelheim. The company decided to concentrate its European pharmaceutical production in Spain and purchased a large property in Sant Gugat del Valles near Barcelona.

In 1998 Boehringer Ingelheim introduced a new organizational structure. Boehringer Ingelheim KG and Dr. Karl Thomae GmbH were organized under the umbrella of Boehringer Ingelheim Pharma KG. Owned by the third and fourth generation of the Boehringer family, the company announced in the late 1990s that, despite merger-mania, it was not interested in a merger with another big player in the field. Instead, Boehringer Ingelheim intended to continue cooperating on distribution with other pharmaceutical companies, as was already done with leading drug makers such as Glaxo Welcome and Abbott Laboratories.

Principal Subsidiaries

Boehringer Ingelheim GmbH (Germany); Boehringer Ingelheim International GmbH (Germany); Boehringer Ingelheim Pharma KG (Germany); Boehringer Ingelheim Vetmedica GmbH (Germany); Delta-Pharma GmbH (Germany); Pharmaton GmbH (Germany); Pharma Investment Ltd. Toronto (Canada); Boehringer Ingelheim Corp.; Boehringer Ingelheim Pharmaceuticals Inc.; Roxanne Laboratories Inc.; Ben Venue Laboratories Inc.; Boehringer Ingelheim Chemicals Inc.