Fresenius taps pre-dialysis kidney care as drugs promise treatment change

  • New diabetes drugs have also been shown to slow kidney decline
  • Dialysis company FMC sees a hit to its growth outlook
  • Fresenius Medical moves towards earlier stages of kidney disease
  • Separate Reuters Fact Box Provides Details of New Drugs

FRANKFURT, Oct 5 (Reuters) – The world’s largest dialysis company is looking for kidney disease patients long before they need the most acute form of care, as it plans to grow new drugs that attack the causes of the condition from the beginning.

For decades, Fresenius Medical Care (FMC) from Germany (FMEG.DE) it has been the largest player in the $50 billion US market providing dialysis and related machines that help filter toxins from the blood for people whose kidneys are failing.

The company’s 17.6 billion euros ($17.6 billion) of annual revenue has been buoyed for decades by high rates of obesity and diabetes, which contribute to kidney damage.

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But the dialysis market is changing as new drugs have been shown to dramatically improve conditions that lead to kidney failure.

FMC anticipates that the introduction of these drugs could be a drag on the growth of its patient population for at least a few years. To diversify its revenue base, it is pushing to expand beyond its core dialysis business into care for earlier-stage kidney disease.

New drugs include AstraZeneca’s (AZN.L) Farxiga diabetes pill that also offers benefits for non-diabetics as an approved treatment to delay chronic kidney disease (CKD).

Germany’s Boehringer Ingelheim and Eli Lilly’s (LLY.N) The diabetes drug Jardiance is expected to be used for the same purpose, while Novo Nordisk’s (NOVOb.CO) The Wegovy injection offers a new treatment option for obesity. Other similar new treatments like Eli Lilly (LLY.N) Mounjaro is also expected to offer new options for weight loss.

All add pressure to the dialysis industry facing rising costs and a temporary reduction in its patient pool, particularly in the United States.

More than 15,000 people on dialysis are estimated to have died of COVID in 2020 alone, according to the US Kidney Data System. Labor shortages in the US healthcare market have pushed up wages and forced FMC, which gets about 70% of its revenue from the United States, and other dialysis providers to rely more on temporary staff.

A US Supreme Court ruling also changed the amount of kidney care coverage that private insurers and the government must offer.

The pressures have pushed FMC shares to a nearly 13-year low and analysts expect the company’s adjusted net income to decline 14.5% to 870 million euros this year.

Parent company Fresenius SE (FREG.DE) has said a sale of FMC cannot be ruled out.

For now, though, FMC is trying to reposition itself in the market and sees hope for both the company and patients: the new drugs, by slowing the progression of the disease, should prolong the lives of those who eventually need dialysis, keeping to patients on FMC. care for longer, Frank Maddux, FMC’s global chief medical officer, told Reuters.

“In the short term, we will see the impact of a delayed progression (chronic kidney disease), but in the long term, we will probably see an expansion in the number of people with chronic kidney disease who survive to live with the disease,” Maddux said.

Sabastien Buch, a fund manager at Union Investment in Frankfurt, Germany, which owns FMC shares, agreed that even if fewer people end up needing dialysis, those who do are likely to live longer, thanks to new drugs.

“Patients who start dialysis in better health will not die after four or five years, but will be part of a group that stays on therapy for about seven or eight years, which are quite rare these days,” Buch said.

DOCTORS SUPPORT NEW DRUGS

FMC’s expansion into older care includes services that will integrate the new drugs, and the company says it plans to capitalize on a growing trend in which health insurers financially reward care providers for keeping patients healthy. .

In March, it bought Cricket Health, one of several US companies that specialize in managing the care of kidney patients.

FMC said the new kidney care market it is targeting is worth $120 billion. The company’s closest rival, Davita (DVA.N) has said that it is also trying to expand in the market. She did not respond to requests for comment.

Daniel Grigat, an analyst at brokerage Stifel, said the drugs could reduce the growth of FMC’s traditional dialysis business in the United States and Europe by 20% over the next five to 10 years, depending on how quickly drug use increases. medicines.

However, growth in emerging markets, where the drugs are not expected to be widely used, could offset half of the decline in sales in the United States and Europe, it said.

FMC declined to give specific estimates of the drugs’ impact on its sales.

While use of AstraZeneca’s Farxiga has been limited so far, Farxiga and potentially Jardiance are expected to be used more widely as its benefits become more appreciated and if US insurers lower barriers to its use, doctors said.

It is not yet known to what extent these and obesity drugs will prevent people from needing dialysis altogether.

Drugs like Farxiga reduce the risk of progressing to kidney failure about 40% of the time, said nephrologist Katherine Tuttle, a professor at the University of Washington in Seattle. Current medications are less effective and are also prescribed only to a minority of patients, she said.

Anjay Rastogi, director of the kidney health program at the University of California, Los Angeles, said “all” eligible patients are prescribed drugs like Farxiga or Jardiance, known as SLGT2 inhibitors.

LOWER COSTS

By delaying the onset of kidney failure, these drugs will reduce health spending in the long run, says Phil McEwan, an expert in predictive modeling and chief executive of Cardiff, Wales-based health economics consultancy Heor Ltd.

Monthly spending in the US per dialysis patient was more than $14,000, or 33 times more than for those without end-stage kidney disease, according to research from the University of Southern California based on 2016 data.

Farxiga’s list price is around $500 per month, though it can be less with discounts.

McEwan and Dan Lyons, who manage healthcare-focused funds at Janus Henderson Investors in Denver, Colorado, said results from trials expected later this year on the cardiovascular benefits of losing weight while taking Wegovy will likely increase the prescriptions for that drug.

Wegovy has already been shown to help overweight people lose 35 pounds or more.

“The rate of growth in dialysis patients is probably not what was anticipated 10 years ago when we weren’t seeing these drugs,” said FMC’s Maddux. “We saw a steeper curve than we now think it probably will be.”

($1 = 1.0188 euros)

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Information from Ludwig Burger; Additional reporting by Deena Beasley in Los Angeles Editing by Caroline Humer and Susan Fenton

Our standards: The Thomson Reuters Trust Principles.

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