Obesity revolution gorges on dialysis maker

Obesity revolution gorges on dialysis maker

LONDON, Oct 11 (Reuters Breakingviews) – Kidney dialysis kit-makers look set to be the latest victim of the obesity drug boom. On Wednesday, shares in Germany-listed Fresenius Medical Care (FMEG.DE) fell 20% after a medical trial showed a Novo Nordisk (NOVOb.CO) drug can reduce the risk of kidney failure. With the prospect of lower earnings in the future, the company’s parent, a 14 billion euro conglomerate also called Fresenius (FREG.DE), may accelerate much-needed surgery.

Diabetes and obesity drugs are showing their fringe benefits. In a recent drug trial, Wegovy, an obesity remedy made by Denmark’s Novo Nordisk, reduced the incidence of serious cardiovascular events like strokes and heart attacks by 20% in overweight patients. On Tuesday, a diabetes drug, which shares the same active ingredient semaglutide as Wegovy, showed it could reduce kidney failure. The success highlights how these drugs, which mimic a natural hormone called GLP-1, may pummel the medical world and beyond, leaving companies grappling with unexpected reductions in earnings.

The collapse in Fresenius Medical Care’s share price looks appropriate. Kidney International reckons that as much as a third of all kidney disease cases in the U.S. are associated with obesity. The rapid uptake of semaglutide-based drugs will mean many fewer overweight people, reducing the need for Fresenius’s dialysis machines.

This dimmed future may accelerate a breakup of the larger Fresenius group. The German conglomerate is currently made up of Vamed, a hospital development business, as well as intravenous drugs and hospital management divisions. It also owns a 32% stake in the listed dialysis business and appoints its board. CEO Michael Sen is in the process of changing the legal structure, giving shareholders more say over its governance. The dialysis kit-maker’s growing problems may persuade him to set it free completely.


Dialysis machine maker Fresenius Medical Care’s shares fell 20% on Oct. 11 after Novo Nordisk revealed positive results from a drug trial looking at whether its drug Ozempic could treat kidney failure in diabetes patients.

The Danish drugmaker said the trial was testing whether the widely used diabetes drug, which contains the active ingredient semaglutide, could delay progression of chronic kidney disease and lower the risk of death from kidney and heart problems.

Fresenius’s parent company Fresenius SE’s shares were down 11% by 0848 GMT on Oct. 11.

Source: Reuters