Walk through the fog of history and restore the truth of getting rich
How profitable can you be selling drugs? Earn more money than real estate tycoons and Internet tycoons?
Looking around the world, there is a rich and invincible pharmaceutical family. Among the 25 richest families in the world, this pharmaceutical family ranks eighth in the world, with a wealth of 51.9 billion US dollars (about 337 billion yuan).
This is the German Boehringer Ingelheim family, which has been passed down for four generations.
Unlike many wealth families, Boehringer Ingelheim has not extended its tentacles to traditional gold-sucking industries such as finance, real estate, and energy, and has been sticking to the pharmaceutical industry for more than 100 years. Moreover, generations of people have held real power in the company, not just "family shares holders".
In 2016, Feng Baohe, the fourth-generation heir of the Boehringer Ingelheim family, ascended to the peak of the company's power and regained the power of the family management that had been away from the company for 25 years. Prior to his studies at MIT, Feng received professional training in finance and law, and after graduation, he worked in various management positions within Boehringer Ingelheim, eventually moving from the position of chief financial officer to becoming the new head.
In 2017, Feng Baohe, Chairman of the Company's Global Executive Board, personally presided over a capital acquisition: the acquisition of Sanofi's Melia company for $13.53 billion made Boehringer Ingelheim the world's second largest supplier of animal health products.
This year, Feng Baohe was just 50 years old.
"The second generation of medicine" is a name that many domestic pharmaceutical enterprise successors are reluctant to accept. However, Feng Baohe's family has made the "fourth generation of medicine" more extreme than the "first generation of medicine", which may bring some enlightenment to young domestic pharmaceutical companies.
01 Started a business from a tartaric acid chemical plant
In 1885, in the small town of Ingelheim, Germany, a young man in his early twenties began his entrepreneurial journey. His name was Albert Bollinger.
At that time, fermented bread was popular throughout Europe, and a large amount of artificial lactic acid was needed on the market. Seeing this opportunity, Albert formed a start-up team of 28 people, and he bought the town's tartaric acid chemical plant and named the company "Boehringer Ingelheim".
The production of this small workshop did not keep up with the market demand at all, but Albert did not give up. After 10 years of opening, he finally developed a process for the large-scale production of lactic acid. This world-first research not only met the consumer demand of European countries in the food, dyeing, leather and textile industries at that time, but also earned Albert the first pot of gold.
However, this was not enough to free Boehringer Ingelheim from the pressure to survive. By today's standards, the company was classified in the food industry.
In order to make the company prosperous, Albert hired his cousin Heinrich Otto Willand, director of the organic chemistry department at the Munich National Laboratory, who had been a corporate consultant to Boehringer Ingelheim since 1907.
As soon as the cousin took office, he made a suggestion: if the company wants to have a long-term foundation, it must establish a well-established research and development department, focusing on the development of acids, alkaloids and other products.
With the establishment of the R&D department, Boehringer Ingelheim took the first step in a century-old pharmaceutical company. In 1912, Boehringer Ingelheim welcomed the first product to officially enter the pharmaceutical industry: Laudanon, a painkiller based on six "opioid alkaloids".
Under the leadership of his cousin Welland, in 1917 Boehringer Ingelheim established the world's first professional drug development department. In the 1920s, the R&D department created a large number of innovative drugs, including the cardiovascular drug Cadechol, the bile drug Bilaval, the anti-respiratory arrest drug Lobelin, the cough suppressant Acedicon, and the adrenaline derivative Drug Sympatol, which improves blood circulation.
For his research on the structure of bile acids and related substances, Welland won the 1927 Nobel Prize in Chemistry.
02 Establishing research and development has formalized Bollinger
Despite its strong R&D strength, Europe in the 1920s was in the midst of war, Boehringer Ingelheim was unable to carry out an "internationalization strategy", and the development of new markets was very difficult.
In 1928, in order to increase its market share in Germany, Boehringer Ingelheim adopted the form of an acquisition and merged with a pharmaceutical company headquartered in Stuttgart. This is a very early M&A expansion in the global pharmaceutical industry, and the courage and determination of the management are evident.
However, even the best management can't fight for time. In 1939, Boehringer Ingelheim founder Albert died, and the company immediately faced the problem of succession.
At that time, Boehringer Ingelheim was already a well-known German pharmaceutical company with 1500 employees. If there was also a "top 100 list of the pharmaceutical industry" at that time, Boehringer Ingelheim must have been one of the top ten companies in Germany. Who will take over is a matter of life and death for the company.
Eventually, Albert's eldest son Albert Blinger Jr., the second son Ernst Blinger, and son-in-law Julius Ribecht entered the core management. Ernst became Chairman of the Board of Directors of the Company.
At this point, Boehringer Ingelheim successfully passed to the second generation of the family. Everything went well for the company: the respiratory drug Aludrin and the painkiller Tomapin were launched one after another, creating a new field of treatment for Boehringer Ingelheim.
The war continued, and Boehringer Ingelheim never took the step of "internationalization", but only took root in Germany itself. It was not until 1948, after the end of World War II, that Ernst established its first subsidiary in Viana, Belgium.
Like many large international pharmaceutical companies at that time, Ernst began a diversified layout strategy: in 1946, a subsidiary for the production of pesticides was established; a subsidiary for cosmetics was established in 1948; and the veterinary drug department purchased by Pfizer in 1955 was established to form an animal medicine department.
It can be said that the "second generation of medicine" has pushed Boehringer Ingelheim to a new height.
03 Diversification and internationalization go hand in hand
Under the international diversification strategy, in the 20 years after the end of World War II, Boehringer Ingelheim's various businesses have developed by leaps and bounds, opening branches in Japan, the United States, Greece and other countries, and launching a number of innovative drugs in the three major areas of respiratory, cardiovascular and gastrointestinal tract.
Just as he was on the way, the second-generation leader Ernst died in 1965.
Boehringer Ingelheim did not abandon the family tradition. In 1967, William, the grandson of the company's founder, and Hubert Ribecht, the grandson of the company's founder, joined the board.
The baton passed to the third generation, and through in-law relations, three large families with different surnames firmly controlled Boehringer Ingelheim.
In the hands of the "third generation of medicine", Boehringer Ingelheim began to enter a period of stable and rapid development, and blockbuster drugs such as antispasmodic, aiquanle, clonidine, and Mushutan have been listed.
In 1987, the world's first thrombolytic drug for acute heart disease, AltonLi (common name: recombinant human tissue fibrinolyticogen activator for injection), was launched, which was from Boehringer Ingelheim under the "third generation of medicine".
Unlike most giants, Boehringer Ingelheim has never been listed and is still a privatized company. Such a choice ensures the independence and complete control of the company's management; but it also causes many problems such as the blockage of corporate information and the slow response of the market.
Looking back now, Boehringer Ingelheim wasted a lot of market opportunities, and the company's sales growth was not fast. In 1991, there was even news that the company might be acquired.
In the face of a huge crisis, the three surnames of the united families realized that if they wanted to survive, they must change.
On January 1, 1992, Boehringer Ingelheim made a major decision, and professional manager Herbert John was appointed chairman of the board of directors, and for the first time the company was not managed by family members. This is the first time in 107 years since Boehringer Ingelheim was founded.
Professional managers brought fresh energy, and at that time, Kleber, a member of the company's senior management team and in charge of research and development, promised that if the reforms went well, it would not be a problem to double sales after seven years, even with only Boehringer Ingelheim's original products. From that moment on, Boehringer Ingelheim showed a strong ability to innovate.
04 The CEO with a foreign surname drives the company's performance
After 7 years of reform, Kleber kept his promise.
According to data disclosed by Boehringer Ingelheim, the company's sales in the 2000 fiscal year were 6.2 billion euros, an increase of nearly three times over 1991 and an increase of 22% over 1999, which was the most rapid development year since the company was founded.
More critically, Kleber adhered to the innovation strategy, allowing the company to escape the "patent cliff" of the first round of multinational pharmaceutical companies. At that time, Bayer, Schering-Bauer, and Bristol-Myers Squibb were all hit hard; Boehringer Ingelheim maintained stable sales because of several innovative drugs in the respiratory, prostate and other fields.
In 2001 and 2009, Boehringer Ingelheim changed the chairmanship of the board twice, both professional managers. During the period when the performance of Boehringer Ingelheim rose sharply, the performance of the three major families was established, and the three major sectors of prescription drugs, animal health and biological drug CDMO were established.
However, members of the Bollinger family did not choose to sit back and eat the dividend. In 2016, Feng Baohe, the descendant of the Bollinger family, officially became the chairman of the company's global executive board after years of internal trial and error.
At this point, the fourth generation of the company's founder, Albert Blinger, returned to the core of power.
At the beginning of his tenure, Feng Baohe led the "great merger and acquisition of the century" worth tens of billions of dollars. In January 2017, Boehringer Ingelheim completed the acquisition of Sanofi's animal health business, becoming the second largest animal health company in the world at that time.
Subsequently, Boehringer Ingelheim followed the trend and expanded its products from traditional areas such as respiratory, cardiovascular and diabetes to oncology and immunity. In recent years, Boehringer Ingelheim has successively acquired Vira Therapeutics, which develops oncolytic viruses, AMAL Therapeutics, which focuses on cancer immunotherapy, and Northern Biologics, a Canadian oncology research and development company.
Heroes don't ask for provenance. Starting from the tartaric acid that makes bread, Boehringer Ingelheim has remained at the forefront of the world's pharmaceutical companies for 136 years, and the family inheritance is complete, which is not easy.
05 Break the spell of "rich but not three generations"
Rich for not more than three generations, it is the curse of the family business.
According to a Cornell University survey, only 13% of family businesses in the United States can be successfully passed on to the second generation, and the probability of surviving the third generation is only 3%.
Boehringer Ingelheim was a different kind. Being able to consistently implement the business philosophy may be the wealth code of the Boehringer Ingelheim family .
The first is a diversified business development model. Among the global pharmaceutical companies, except for Johnson & Johnson, few large pharmaceutical companies choose to develop their multi-form business synchronously. However, Boehringer Ingelheim's three major segments of human pharmaceuticals, animal health, and biopharmaceutical CDMO have remained stable, and the CDMO business with the smallest proportion can also remain at the forefront of the world.
Like many large pharmaceutical companies in China, the family of the heir of the enterprise has superior economic conditions, has a good educational background, a broad vision and a wide range of knowledge. However, compared with the "pharmaceutical generation", there is a lack of market training from the first-line production, marketing, and even the initial stage of building factories, moving goods, and engaging in marketing.
Many "second generation of medicine" are after graduating from college to enter the enterprise, due to the special status, have not suffered too much pressure, grievances and tribulations, often disdain the "generation of medicine" entrepreneurial ideas, the enterprise to think that the faster track.
On the other hand, the fourth generation of the Bollinger family, Feng Baohe, he has been practicing in various positions in the company for 15 years before he really takes charge of Shuaiyin. Boehringer Ingelheim's management structure is also unique: the shareholders' committee has voting rights, while the board of directors is responsible for day-to-day operations. This dual management model ensures that the company is basically not wrong when it encounters major decisions.
The talent mechanism used for selection is also the way to build a long-term career. When there is a shortage of management talent in the company, the three families can tolerate and rely on external wisdom to improve the company's performance.
In particular, today's innovative pharmaceutical companies that rely on capital do not have:
Boehringer Ingelheim developed entirely through his own wealth accumulation, minimizing capital intervention.
So far, Boehringer Ingelheim, who has been "rich for four generations", has basically formed the inheritance of the company's spirit, culture and ideological essence. Without relying on shouting slogans and vests every day, you can also manage family businesses, which may be the key that domestic family pharmaceutical companies should understand.
Text | Lei Gong
Operational | Yan Ning