What happened
Shares of Fresenius Medical Care (FMS -0.54%) were down more than 18% as of noon ET on Wednesday. The healthcare company's shares are up a little more than 5% so far this year. The drop came because a competitor's drug fared well in preventing kidney disease, and a big part of Fresenius' business is in dialysis therapies.
So what
Fresenius is the world's largest provider of products and services for individuals with kidney diseases. As of the end of the second quarter, the company said it was treating roughly 344,000 patients in 4,050 dialysis clinics. Dialyzers and dialysis machines are among the company's top products.
The company wasn't the only dialysis-related company to see its shares fall, as DaVita and Baxter International also saw their shares take a hit. The impetus for the drop was that pharmaceutical company Novo Nordisk ended its phase 3 trial early for Ozempic (semaglutide) as a therapy to slow the progression of kidney disease in people with type 2 diabetes and chronic kidney disease because the trial was so successful. The trial was stopped on the recommendation of an independent data monitoring committee.
Now what
Semaglutide is already approved to treat diabetes and obesity, and now it is showing the potential to disrupt the need for dialysis as well. Fresenius was already struggling because of a sluggish second-quarter report and tightened yearly guidance. In the second quarter, the company said that revenue was up 2%, year over year, but net income was down 26% over the same period last year. The company also said that it expected yearly operating income to be flat or decline, percentagewise, by up to low single digits.
