Innovation And Acquisitions Boost German Drug Firms

Growth of the leading German drugmakers last year was fueled by amixture of product innovation and acquisitions, especially marked in the case of Hoechst and BASF.

Schwarz Pharma and Schering AG were also seen to have benefited from acquisitions, with Schering purchasing the eastern German Group Jenapharm and Leiras of Finland, while Schwarz acquired stakes in the Puren and Hoyer groups (Marketletters passim). These companies posted double-digit growth quite apart from the effect of the acquisitions, and the same applied to Boehringer Ingelheim and Boehringer Mannheim.

While German drugmakers boosted their results through increases in sales, improvements in structure and the shedding of certain financial burdens in 1996 (especially Hoechst), profits growth was modest compared with Swiss, USA or UK competitors. With a rate of return of over 30%, these firms were twice as profitable as the leading German groups.