UPDATE: Fresenius Shares Down After Heparin Rival Gets FDA Ok
September 01 2009 - 6:21AM
Dow Jones News
Shares of German health care company Fresenius SE (FRE.XE) fell
Tuesday after rival Hospira Inc. (HSP) received U.S. approval for
six new dosages of blood-thinner heparin, chipping away at
Fresenius' monopoly.
The U.S. Food and Drug Administration late Monday approved
Hospira's application to sell therapeutic heparin in new
quantities, in single and multiple dose vials. Hospira said in a
statement that the company now can offer various sizes and
strengths of the product in syringes, vials and flexible
containers.
Commerzbank analyst Volker Braun wrote in a note that the
"monopoly is likely to end" for Fresenius SE and forecast the
company's heparin sales falling to $162 million in 2010 from $240
million in 2009.
Braun said the competition comes nine months earlier than he
expected, and said market disappointment should be high
Tuesday.
At 1041GMT, Fresenius shares were down EUR1.97, or 5%, at
EUR37.37.
Hospira competes directly with APP Pharmaceuticals, a U.S.-based
heparin manufacturer, which Fresenius agreed to buy in July 2008
for $3.7 billion plus the assumption of $940 million in debt. APP
is now a subsidiary of Fresenius' infusion therapy division
Kabi.
A Fresenius SE spokesman said the company didn't expect its
monopoly to be sustainable and knew there would be competition at
some point. However, he said the company is relatively cool to
Hospira's new approvals and is taking a wait-and-see approach as to
how much market share the new products would garner.
Without knowing how much volume Hospira plans to add to the
market and at what price, it's difficult to estimate the impact on
Fresenius, LBBW analyst Karl-Heinz Scheunemann said. Hospira could
charge less than Fresenius or the same price, he says.
Scheunemann said price competition would benefit Fresenius
Medical Care (FMS), a division of Fresenius which must buy heparin
for use with its dialysis services. However, he said any cost
savings would likely not be enough to offset the negative impact on
APP's business.
Company Web site: www.fresenius.com
-By Allison Connolly, Frankfurt Bureau; +49 69 29725513,
allison.connolly@dowjones.com
(Heide Oberhauser-Aslan contributed to this report.)