Boehringer slashes its R&D budget with a new focus on collaboration

Boehringer Ingelheim SVP Michel Pairet

German drugmaker Boehringer Ingelheim is planning to dial down its R&D spend over the next 5 years, turning to a growing stable of external collaborators to feed its pipeline of new therapeutics.

Boehringer is planning to spend €11 billion ($11.8 billion) on research through 2020, amounting to €2.2 billion ($2.5 billion) a year. On average, that's a roughly 17% drop from the €2.7 billion ($2.9 billion) the company spent on R&D last year.

But Boehringer contends its recent embrace of external innovation will help it get more from less. The company is earmarking €1.5 billion ($1.6 billion) of its 5-year budget for new R&D deals, targeting biotech upstarts, academic luminaries and a newfangled crowdfunding program.

Boehringer has been particularly active in the translational medicine field over the past year, signing research agreements with the Icahn School of Medicine, Massachusetts General Hospital, Scripps Research Institute and Weill Cornell Medicine in hopes of spotlighting new approaches to inflammatory bowel disease. And the company has twice aligned itself with Germany's BioMed X, a crowdfunding outfit that solicits pitches from researchers around the world in search of promising programs.

"Our new strategy embraces the trend towards more extensive open-innovation approaches between academia and industry in biomedical research," Michel Pairet, Boehringer's executive vice president of R&D, said in a statement. "... The new strategy will foster our external collaboration efforts by enabling us to be faster and more flexible. This is of essence for research beyond the borders of our current focus areas, where we explore emerging science, new indications and new technology to expand opportunities."

Boehringer's heightened focus on collaboration follows a long-running trend among the world's largest drugmakers, who have gradually moved away from vertically integrated R&D in favor of a more open-ended approach to research. Johnson & Johnson ($JNJ), Novartis ($NVS), AstraZeneca ($AZN) and others have taken a similar tack with varying success.

- read the statement