Fresenius Medical Care could end up benefiting from blockbuster obesity drugs, according to its chief executive, contrary to concerns that such treatments could be negative for the dialysis specialist.

“I believe [the effect] is neutral to positive, not negative,” Fresenius Medical Care’s Chief Executive Helen Giza said in an interview.

Ozempic and others in the class of drugs known as GLP-1 have shown promise in clinical trials beyond their most common uses for diabetes and weight loss to treat heart, kidney and liver diseases, among a growing list of conditions. As signs of their potential emerged, investors raced to look for winners and losers.

When a Novo Nordisk study showed Ozempic could slow chronic kidney disease in October 2023, investors and analysts wondered whether dialysis companies like Fresenius Medical Care and U.S. peer DaVita–already reeling from the death toll that the Covid-19 pandemic took on their patient populations–faced a new structural risk. Their share prices tanked initially, but have bounced back since then.

For a few months, Giza spent 90% of her meetings with investors fielding questions about the threat the drugs posed to the future of the company, she said. Those concerns have eased and she now thinks the company could even be a winner.

“I do feel that the patient population will be bigger,” Giza said.

At the heart of the investor debate on the impact of drugs like Ozempic on dialysis companies is the question of whether the cardiovascular benefits for patients with chronic kidney disease will outweigh a delayed need for dialysis.

Ozempic pens on a production line.

Obesity drugs such as Ozempic could end up benefiting Fresenius Medical Care, its CEO said. Photo: tom little/Reuters

Fresenius Medical Care says the lives of many of its patients are cut short by cardiovascular issues before they get dialysis, so cardiovascular benefits could broaden its patient pool. Still, several analysts see GLP-1 drugs as a risk for the company, citing their potential to delay the need for dialysis.

The market seems to be assuming that the GLP-1 drugs will be an unmitigated negative for the company, said Daniel Babkes, co-portfolio manager at Pzena Investment Management. Pzena is one of the largest shareholders in Fresenius Medical Care, with a stake of more than 5%, a position it started to build in 2021.

“We’re not so sure that that’s the case. We think that [the impact] is balanced and potentially could be positive in the long term,” Babkes said.

Giza said it will take a decade for the effects of the drugs on the dialysis market to play out.

While the company’s position has been that the drugs will have a neutral effect, Giza points out that even a small increase in the number of patients with chronic kidney disease could result in a big rise in those who need dialysis, even if they need it later.

“We know that if they are living longer, that means it will also take longer to get to dialysis,” Giza said. “Time will tell on where those lines cross and if it’s neutral or better. I do not believe it’s worse.”

Fresenius Medical Care expects U.S. patient numbers to grow by an average of at least 2% a year between 2025 and 2035, signaling a return to growth after a postpandemic period during which dialysis providers in the U.S. struggled with declines in patient volumes.

“It’s going to take some time, but we’re confident in the 2% plus,” Giza said.