Focus on R&D set to boost BASF Pharma
29 Mar 2000
BASF has set itself a 15-20 per cent target for return on sales in its pharmaceuticals division. Alone among the German majors in combining heavy chemicals with life sciences, the company intends to reach this target by accelerating the development and launch of new products.
The drugs division has been achieving EBITDA (earnings before interest, taxes, depreciation and amortisation) of around 15 per cent in recent years, which is roughly comparable with similar-sized European firms. However, the board member responsible for the division, Eggert Voscherau, is concerned that investments in R&D and acquisitions over the past few years could damage the company's profitability.
It's this investment, however, which will give the company the impetus to improve its performance. The development pipeline contains 14 promising drug candidate, targeted at unfilled therapeutic niches. For example, among five drugs earmarked for launch by 2003 is a rheumatoid arthritis treatment, currently in phase III trials. The company is also planning intensive marketing campaigns for some of its current drugs, such as the thyroid hormone deficiency treatment Synthroid, in key geographical areas.
`In a short time, we have very good prospects to become a profitable pharma specialist,' comments BASF Pharma executive chairman Thorlef Spickschen.
* BASF has turned to Chemitrade, the solvents division of Ellis & Everard, to act as sole UK distributor for the German firm's oxygenated solvents range. Chemitrade is currently developing its Cadishead terminal, pictured, to cope with the increased volume of business.
