© Reuters. FILE PHOTO: The diabetes drug Farxiga (dapagliflozin) is displayed at a pharmacy in Provo, Utah, U.S. May 28, 2020. REUTERS/George Frey/File Photo
By Ludwig Burger
FRANKFURT (Reuters) – The world’s largest dialysis company is looking for patients with kidney disease long before they need the most acute form of care as it plans to develop new drugs that attack the kidneys. early causes of illness.
For decades, Germany’s Fresenius Medical Care (NYSE:) (FMC (NYSE :)) has been the largest player in the $50 billion market, providing dialysis and related machines that filter out toxins. in the blood for people whose kidneys are not functioning properly.
The company’s annual sales of 17.6 billion euros ($17.6 billion) have been sustained for decades by high rates of obesity and diabetes, which contribute to kidney damage.
But the dialysis market is changing as new drugs have been shown to dramatically improve conditions that lead to kidney failure.
FMC predicts that the introduction of these drugs could be a drag on its patient population growth for at least some years. To diversify its revenue base, the company is accelerating expansion beyond its core business of dialysis into pre-stage kidney disease care.
New drugs including AstraZeneca’s Farxiga diabetes pill (NASDAQ:) also benefit non-diabetic patients as an approved treatment to slow chronic kidney disease (CKD). ).
The diabetes drug Jardiance by Boehringer Ingelheim and Eli Lilly (NYSE:) of Germany are expected to be used for the same purpose, while Novo Nordisk’s Wegovy (NYSE:) injection offers a treatment option. new for obesity. Other similar new treatments like Eli Lilly’s Mounjaro are also said to offer new weight loss options.
All of this adds pressure to the dialysis industry, which is already facing rising costs and a temporarily shrinking patient pool, especially in the United States.
According to the American Kidney Data System, more than 15,000 people on dialysis are estimated to have died from COVID in 2020. A labor shortage in the US healthcare market has pushed wages higher and forcing FMC, which accounts for about 70% of its revenue from the United States, and other dialysis providers to rely more heavily on temporary staff.
A U.S. Supreme Court ruling has also changed the level of kidney care coverage that private and government insurers must offer.
Pressures have pushed FMC shares to a near 13-year low, and analysts expect the company’s adjusted net income to fall 14.5% to 870 million euros this year.
Parent company Fresenius SE (ETR:) said the sale of FMC could not be ruled out.
For now, however, FMC is trying to reposition itself in the market and see hope for both the company and its patients: new drugs that, by slowing disease progression, will prolong life of those who end up on dialysis, keeping patients at FMC Frank Maddux, FMC’s global chief medical officer, told Reuters.
“In the short term, we will see the impact of some slow progression (chronic kidney disease) but in the longer term we will likely see an increase in the number of people with chronic kidney disease. survive. Maddux said.
Sabastien Buch, a fund manager at Union Investment in Frankfurt, Germany, which holds FMC stock, agrees that even if fewer people end up on dialysis, those people 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 continues on treatment for seven or eight years,” said Buch. It’s pretty rare these days,” Buch said.
DOCTORS BACK NEW DRUGS
FMC’s expansion into pre-care includes services that will integrate new drugs, and the company says it plans to capitalize on a growing trend in which health insurers reward financial care providers to keep patients in good health.
In March, it bought Cricket Health, one of a number of US companies specializing in kidney care management.
FMC says the new kidney care market it is targeting is worth $120 billion. The company’s closest rival, Davita, said it is also trying to expand the market. It did not respond to a request for comment.
The drug could slow growth in FMC’s traditional dialysis business in the US and Europe within five to 10 years, said Daniel Grigat, an analyst at brokerage Stifel. Depends on how quickly the drug is taken.
However, growth in emerging markets, where the drug is not expected to be widely used, could offset half of the decline in US and European sales, he said.
FMC declined to give specific estimates of the drug’s impact on its sales.
While AstraZeneca’s use of Farxiga has been limited so far, Farxiga and potentially Jardiance are expected to be more widely used as their benefits are more appreciated and if companies underwrite insurance U.S. insurance lowers barriers to use, doctors say.
These levels are not yet known, and obesity drugs will prevent people from needing dialysis altogether.
Drugs like Farxiga reduce the risk of progressing to kidney failure by about 40%, says nephrologist Katherine Tuttle, a professor at the University of Washington in Seattle. Current drugs are less effective and are also prescribed to only a small number of patients, she said.
Anjay Rastogi, director of the kidney health program at the University of California at Los Angeles, said “every patient” of his is eligible to be prescribed drugs like Farxiga or Jardiance known as SLGT2 inhibitors.
Phil McEwan, predictive modeling expert and chief executive officer of health economics consulting firm Heor Ltd. based in Cardiff, Wales, said that by delaying the onset of kidney failure, such drugs would reduce health spending in the long run.
According to a University of Southern California study based on 2016 data, the US monthly spending per dialysis patient is more than $14,000, or 33 times that of those without end-stage kidney disease.
Farxiga’s list price is around $500 per month, though it can be lower with discounts.
McEwan and Dan Lyons, healthcare-focused fund managers at Janus Henderson Investors in Denver, Colorado, say trial results are expected later this year on cardiovascular benefits from weight loss when taken. Wegovy will likely push for that prescription.
Wegovy has been shown to help overweight people lose 35 pounds or more.
“The growth rate in dialysis patients is probably not something that would have been predicted 10 years ago when we didn’t see these drugs,” said FMC’s Maddux. “We’ve seen a curve steeper than we thought now might be.”
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