The year 2017 will be a challenging one for Dr Joachim Hasenmaier, member of the board of managing directors at Boehringer Ingelheim with responsibility for Animal Health and Consumer Health Care (CHC). He was deeply involved in acquiring Merial. As from 2017, he hopes to embark on building a unified animal health division.
One day in the far future, when Dr Joachim Hasenmaier closes the doors of his office for the last time, another will open. “As soon as I retire, I will spend way more time selecting my food than I am today. For me, sourcing food and eating good food is something very important. It’s something I take into my body every day. And it’s also the basis of health and pleasure.”
Thinking about quality food has always been pivotal in the life of Dr Hasenmaier, member of the board of managing directors at German-based healthcare company Boehringer Ingelheim, and as such responsible for the animal health business. He grew up on a small dairy farm, in south west Germany, near Stuttgart. Although it was initially thought that he would take over the family business, he moved to Munich to study veterinary medicine.
It was here that he learnt about making autogenous (farm-specific) vaccines. He tells, “At my parents’ farm, diseases usually came when buying cattle at marketplaces. The solution was: antibiotics, antibiotics, antibiotics. I then went to work with a professor to develop autogenous vaccines. I will never forget the first calve to whom we gave that autogenous vaccine… it passed away! My parents, however, trusted their son, and with these autogenous vaccines, antibiotics disappeared.”
Hasenmaier also spent internships at Charolais beef cattle farms in western France and apart from learning the language he learnt how to appreciate la façon de vivre française – the French way of life.
A passion for livestock, a special interest in vaccines and a love for everything French: it cannot be coincidence that Hasenmaier was among the key people in the process of Boehringer Ingelheim (BI) acquiring Merial. In late June 2016, BI and French health holding Sanofi announced that they had reached definite agreements on a business swap: BI would acquire the Sanofi’s animal health business Merial in exchange for BI’s Consumer Health Care division, known for containing over-the-counter (OTC) medicine, and an additional payment of €4.7 billion. It is anticipated that by the end of 2016, clearance will be given by antitrust authorities to close the transaction. Clearance would turn BI into a health company with two strikingly strong legs: human pharma Prescription Medicine (PM) and Animal Health.
Dr Joachim Hasenmaier: “You could say I was in the eye of the storm. I was absolutely convinced that Merial and BI should come together. That was my deep conviction and also my dream. It was a very tough decision to give away our OTC business, but with the business swap two strong European based companies would become global players in two attractive market segments.
“BI needs a strong leg next to the PM business. Apart from its perspectives in the animal health industry, for BI as a corporation, the combination of BI with Merial is very important. It establishes a significant leg, a significant overall contribution to BI next to an increasingly volatile Prescription Medicine business.”
“Of course for us by far the biggest gain is in pets. Because we are generally a livestock company and Merial is a pet company. But then, globally Merial is small in swine, we are very competitive in swine; Merial is strong in poultry, we have some small poultry business, we have plans in the pipeline for poultry, so Merial is a perfect complementation. In cattle, I would say neither of us is a leading player; we both are missing an anti-infective component, which is the biggest segment in cattle, but together we significantly strengthen our cattle portfolio.”
“To protect birds and of course also to protect humans, avian influenza would be very high on the radar screen of the combined company. We also believe influenza is still an issue we should tackle on the swine side. So there will be a strong focus in the future on influenza for swine and poultry.
“The big topic of influenza is the virus’ rapid shifts of genetic structure. We know this from the human side. So the question is: How quickly can we follow and how relevant are our strains to deal with new outbreaks?”
“With vaccines, you have to be close to markets. You need to have the full value chain for vaccines: R&D, a robust supply chain organisation, and commercial. As soon as something emerges, you need to react quickly.
“To build global hubs is part of our animal health strategy at BI, and this would be vastly accelerated through the acquisition of Merial. We already have a strong presence in the US; a couple of years ago we established an R&D site in China and we are now in the process of finalising and validating our Chinese manufacturing facility. Apart from our veterinary research centre in Hanover, we are missing this presence in Europe. And Merial, in Lyon, perfectly complements that strategy of having the full value chain on a large scale in the US, Europe and China.”
“Absolutely separate! Both companies are two separate entities. Until closing of the transaction, Boehringer Ingelheim and Sanofi/Merial continue to be independent companies. Closing is expected by year-end 2016. Until then we cannot share any confidential information on pipeline projects, and we can also not work together commercially.”
“As a veterinarian, I will always defend the use of antibiotics as a drug of last resort for animals. However, if a system only works through use of massive antibiotics, I say something is wrong. And we should rather do something about what’s wrong than covering problems with antibiotics. So we as mankind I think have been a little too careless with antibiotics.”
“Right now, we can divide the world animal protein market into two trends. One is the growing population, people being able to afford animal protein, that is the trend in emerging markets in Asia. But I think there’s an equally powerful trend that if we don’t convince consumers in the western world they can feel good about eating meat, meat consumption will go down. Feeling good about eating meat means that it is OK to raise this animal, kill it and have it eaten. For me, it will always be special to eat meat. You won’t see me leave a piece of meat on a plate because I know what’s behind it to produce it and what happened to produce it. I believe the future is in less meat but in higher quality and hence prices. If you talk to customers, they are faced with so many short-term problems that for them it is difficult to see those bigger problems and how to get out of them.”
“If we really must feed the world, we shouldn’t go through feed conversion. Living in a healthy fashion is not trivial. If you have meat included in your diet, you’re on a much safer path to a balanced nutrition and a healthy life than if you cut it out completely; that is my deep conviction. But this is not by eating 1 kg of meat every day.”
“Exactly. That’s why I think the future is in value. Now the question is how to unlock that value. Right now the retailers just want to sell meat to attract people to sell the rest of their portfolio. I think it’s wrong; it’s the wrong way to attract people. I think meat should not be cheap.”
Joachim Hasenmaier is member of the board of managing directors at Boehringer Ingelheim, responsible for the Corporate Board Divisions Animal Health and Consumer Health Care. Prior to that, he held various managing positions within the company, e.g. heading the global animal health business (2001-2011), as well as at Hoechst Roussel Vet and Intervet. He graduated from the Ludwig Maximilian University of Munich, Germany, with a doctorate in veterinary medicine. He holds an MBA from Kellogg Business School at Northwestern University in Chicago, IL, United States.