Jiménez Díaz Foundation University Hospital in Madrid has again been awarded the EFQM Recognized for Excellence award with the maximum five stars, this time also receiving the highest rating of any hospital in Spain. The 667-bed facility earned more than 650 points on the rating scale used by the European Foundation for Quality Management during a comprehensive management and process evaluation earlier this year. In the award presentation, the EFQM cited Jiménez Díaz Foundation University Hospital’s intensive focus on patient care, as well as its continuous improvements in treatments and the use of medical technology. This leading teaching hospital is part of the Quirónsalud group, the Spanish unit of Fresenius Helios.
Jiménez Díaz Foundation University Hospital in Madrid has again been awarded the EFQM Recognized for Excellence award with the maximum five stars, this time also receiving the highest rating of any hospital in Spain. The 667-bed facility earned more than 650 points on the rating scale used by the European Foundation for Quality Management during a comprehensive management and process evaluation earlier this year. In the award presentation, the EFQM cited Jiménez Díaz Foundation University Hospital’s intensive focus on patient care, as well as its continuous improvements in treatments and the use of medical technology. This leading teaching hospital is part of the Quirónsalud group, the Spanish unit of Fresenius Helios.
Fresenius has decided today to terminate the company’s merger agreement with Akorn, due to Akorn’s failure to fulfill several closing conditions.
Fresenius’ decision is based on, among other factors, material breaches of FDA1 data integrity requirements relating to Akorn’s operations found during Fresenius’ independent investigation. Fresenius offered to delay its decision in order to allow Akorn additional opportunity to complete its own investigation and present any information it wished Fresenius to consider, but Akorn has declined that offer.
Fresenius confirms its guidance for 2018. The Group continues to expect a sales growth of 5% to 8%2 in constant currency. Group net income3 is expected to increase by 6% to 9%4 in constant currency (excluding expenditures for the further development of the biosimilars business around 10% to 13%5).
On Saturday, Fresenius Medical Care announced the sale of Sound Inpatient Physicians Holdings, LLC. The expected pre-tax book gain of around EUR800 million on this transaction is excluded from Fresenius’ 2018 Group guidance.
Fresenius will report its first-quarter results, as scheduled, on May 3, 2018.
1 FDA: Food and Drug Administration 2 2017 adjusted for IFRS 15 (EUR486 million at Fresenius Medical Care) 3 Net income attributable to shareholders of Fresenius SE & Co. KGa4 Base 2017: EUR1,816 million; 2018 before special items (acquisition-related expenses); including expenditures for further development of biosimilars business (EUR43 million after tax in FY/17 and ~EUR120 million after tax in FY/18) 5 Base 2017: EUR1,859 million; 2018 before special items (acquisition-related expenses); excluding expenditures for further development of biosimilars business (EUR43 million after tax in FY/17 and ~EUR120 million after tax in FY/18)
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For additional information on the performance indicators used please refer to our website www.fresenius.com/alternative-performance-measures.
This release contains forward-looking statements that are subject to various risks and uncertainties. Future results could differ materially from those described in these forward-looking statements due to certain factors, e.g. changes in business, economic and competitive conditions, regulatory reforms, results of clinical trials, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. Fresenius does not undertake any responsibility to update the forward-looking statements in this release.
Fresenius has decided today to terminate the company’s merger agreement with Akorn, due to Akorn’s failure to fulfill several closing conditions.
Fresenius’ decision is based on, among other factors, material breaches of FDA1 data integrity requirements relating to Akorn’s operations found during Fresenius’ independent investigation. Fresenius offered to delay its decision in order to allow Akorn additional opportunity to complete its own investigation and present any information it wished Fresenius to consider, but Akorn has declined that offer.
Fresenius confirms its guidance for 2018. The Group continues to expect a sales growth of 5% to 8%2 in constant currency. Group net income3 is expected to increase by 6% to 9%4 in constant currency (excluding expenditures for the further development of the biosimilars business around 10% to 13%5).
On Saturday, Fresenius Medical Care announced the sale of Sound Inpatient Physicians Holdings, LLC. The expected pre-tax book gain of around €800 million on this transaction is excluded from Fresenius’ 2018 Group guidance.
Fresenius will report its first-quarter results, as scheduled, on May 3, 2018.
1FDA: Food and Drug Administration
22017 adjusted for IFRS 15 (EUR486 million at Fresenius Medical Care)
3Net income attributable to shareholders of Fresenius SE & Co. KGaA
4Base 2017: EUR1,816 million; 2018 before special items (acquisition-related expenses); including expenditures for further development of biosimilars business (EUR43 million after tax in FY/17 and ~EUR120 million after tax in FY/18)
5Base 2017: EUR1,859 million; 2018 before special items (acquisition-related expenses); excluding expenditures for further development of biosimilars business (EUR43 million after tax in FY/17 and ~EUR120 million after tax in FY/18)
This release contains forward-looking statements that are subject to various risks and uncertainties. Future results could differ materially from those described in these forward-looking statements due to certain factors, e.g. changes in business, economic and competitive conditions, regulatory reforms, results of clinical trials, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. Fresenius does not undertake any responsibility to update the forward-looking statements in this release.
- Adjusted revenue growth target in 2018 of 5 to 7% at constant currency expected (previously around 8%) mainly due to recent reduction in dosing of calcimimetic drugs
- Reconfirmed reported net income growth target of 13 to 15% at constant currency in 2018
- Preliminary indicative first quarter 2018 results impacted by strong currency headwind and positive one-time effect in previous year
“First quarter results are impacted by a shift of calcimimetic drugs from our pharmacy business into the dialysis service business in the U.S. Due to a faster than expected reduction in dosing of those drugs in the controlled clinic environment, we are experiencing a headwind on revenue growth for fiscal 2018,” said Rice Powell, CEO of Fresenius Medical Care. “Based on our solid underlying business and the planned phasing of net income growth we confirm our net income growth target for 2018.”
Clinical introduction of calcimimetic drugs with impact on revenue growth 2018
The addition of Parsabiv as an injectable calcimimetic drug in the U.S. triggered the move of the corresponding reimbursement for Medicare patients from Part D to Part B. This resulted in a revenue decline in the Company´s pharmacy business and a lower than assumed revenue increase in the dialysis service business driven by lower than expected dosing of calcimimetic drugs. It is imperative that drugs are delivered in an efficient and effective manner in Fresenius Medical Care´s controlled clinic environment to the patients who benefit from the use of those drugs. The Company actively manages all classes of medications focusing on the quality outcomes for patients and the overall cost to the respective health care system.
Preliminary indicative key figures (IFRS) – first quarter 2018 compared to first quarter 2017, adjusted for IFRS 15
| EUR million | Q1 2018 | Growth yoy | Growth yoy at cc |
| Revenue | 3,976 | (10%) | 2% |
| Revenue Q1 2017 excluding VA Agreement1 | 3,976 | (8%) | 4% |
| Operating income (EBIT) | 497 | (24%) | (15%) |
| Operating income (EBIT adjusted for valuation of the Sound Physicians' share based payments2 and excluding VA Agreement Q1 20171 |
510 510 |
(22%) (8%) |
(13% 3% |
| Net income3 | 279 | (10%) | 0% |
| Net income adjusted for valuation of the Sound Physicians' share based payments2 and excluding special items (VA Agreement1, U.S. Tax Reform) |
292 244 |
(5%) (2%) |
5% 8% |
For a detailed reconciliation, please refer to the table at the end of the press release.
1Agreement with the United States Departments of Veterans Affairs and Justice
2Initial increase in valuation of the Sound Physicians’ share based payment program caused by sale of Sound Physicians
3Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
Preliminary first quarter 2018 results
Revenue in the first quarter 2018 was strongly impacted by headwinds from foreign exchange rates, the expected decline in our North American Care Coordination business and the positive one-time effect in Q1 2017. Revenue came in below the level of the previous year’s quarter with EUR 3,976 million. Adjusted for IFRS 15 and at constant currency, revenue increased by 2%, excluding the VA Agreement in Q1 2017 the first quarter growth was 4% at constant currency.
Operating income (EBIT) in the first quarter 2018 reached EUR 497 million. Adjusted for the first quarter effect of the valuation of Sound Physicians’ share based payment program in connection with the divestiture of Sound Physicians and for the positive impact of the VA Agreement in Q1 2017 EBIT was up by 3% at constant currency.
Net income1 for the first quarter of 2018 was stable at constant currency at EUR 279 million. Adjusted for the first quarter effect of the valuation of Sound Physicians’ share based payment program and the effect of the U.S. Tax Reform in 2018 and for the positive impact of the VA Agreement in Q1 2017, net income was 8% ahead in constant currency of last year’s first quarter.
1Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
Outlook 2018
Mainly driven by the change in calcimimetic drugs Fresenius Medical Care expects reduced revenue growth of 5 to 7% (previously: around 8%) at constant currency. The company continues to expect reported net income growth of 13 to 15% at constant currency.
The targets are based on 2017 adjusted for the effect of the IFRS 15 implementation and exclude effects from major transactions such as the planned acquisition of NxStage Medical and the sale of Sound Physicians.
Publication and conference call
Fresenius Medical Care will publish the results of the first quarter, as scheduled, on Thursday, May 3, at 7:00 a.m. CET and hold a conference call to discuss the results of the first quarter at 3:30 p.m. CET / 9:30 a.m. EDT. Details will be available on the company’s website www.freseniusmedicalcare.com in the “Investors/Events” section. A replay will be available shortly after the call.
Fresenius Medical Care is the world's largest provider of products and services for individuals with renal diseases of which around 3.2 million patients worldwide regularly undergo dialysis treatment. Through its network of 3,752 dialysis clinics, Fresenius Medical Care provides dialysis treatments for 320,960 patients around the globe. Fresenius Medical Care is also the leading provider of dialysis products such as dialysis machines or dialyzers. Along with the core business, the company focuses on expanding the range of related medical services in the field of Care Coordination. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME) and on the New York Stock Exchange (FMS).
For more information visit the Company’s website at www.freseniusmedicalcare.com.
Disclaimers
This release contains forward-looking statements that are subject to various risks and uncertainties. Actual results could differ materially from those described in these forward-looking statements due to certain factors, including changes in business, economic and competitive conditions, regulatory reforms, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Fresenius Medical Care AG & Co. KGaA's reports filed with the U.S. Securities and Exchange Commission. Fresenius Medical Care AG & Co. KGaA does not undertake any responsibility to update the forward-looking statements in this release.
Fresenius Medical Care, the world’s largest provider of dialysis products and services, today announced an important strategic step to sharpen its U.S. Care Coordination profile with the signing of a definitive agreement to divest its controlling interest in Sound Inpatient Physicians Holdings, LLC (Sound) to an investment consortium led by Summit Partners (Summit), for total transaction proceeds of $2.15 billion (EUR 1.76 billion1). Sound is a physician organization providing services across the acute episode of care – through emergency medicine, critical care, hospital medicine, transitional care and advisory services (www.soundphysicians.com).
To gain a deeper understanding and expertise on the highly efficient coordination of patients while improving the quality outcomes and reducing total cost to the health care system at the same time, Fresenius Medical Care invested to become majority shareholder in Sound in 2014. In the same year, Sound expanded its footprint with the acquisition of Cogent Healthcare, Inc. Due to the participation in the major value-based program BPCI (Bundled Payments for Care Improvement) focusing on improving quality while lowering costs, Fresenius Medical Care was able to learn and significantly broaden its experience in value-based care programs in the U.S.
In 2017, Sound generated revenues of around EUR 1.25 billion and EBIT of around EUR 90 million with 3,500 employees.
“In the previous years we have gained insight and successfully applied the knowledge on efficient patient coordination and on value-based programs in our unit called Fresenius Health Partners where we run the ESCOs, our own Medicare Advantage plan and various sub-capitated arrangements. This was an important milestone in the execution of our Care Coordination strategy,” said Rice Powell, Chief Executive Officer of Fresenius Medical Care. “As we are now very well positioned in the U.S. to ensure high quality outcomes for our dialysis patients in a health care system that is moving towards value-based care, we are enabled to divest Sound and release the invested capital for further focused growth investments to add value for our shareholders.”
“The acquisition by Summit provides Sound with the opportunity to expand its existing service lines in a rapidly changing market and tap into new areas. This is a great chance for Sound’s employees to be part of this next development step,” said Bill Valle, Chief Executive Officer of Fresenius Medical Care North America.
The divestment is expected to generate a pre-tax book gain for Fresenius Medical Care of approximately EUR 800 million1,2. Closing of the transaction is subject to regulatory approvals and anticipated late in 2018.
The financial targets for 2018 and 2020 do not include the effects of this divesture or the planned acquisition of NxStage Medical, Inc.
1 EUR/USD 1.22
2 Based on the company’s latest available valuation of the North American business segment
Fresenius Medical Care is the world's largest provider of products and services for individuals with renal diseases of which around 3.2 million patients worldwide regularly undergo dialysis treatment. Through its network of 3,752 dialysis clinics, Fresenius Medical Care provides dialysis treatments for 320,960 patients around the globe. Fresenius Medical Care is also the leading provider of dialysis products such as dialysis machines or dialyzers. Along with the core business, the company focuses on expanding the range of related medical services in the field of Care Coordination. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME) and on the New York Stock Exchange (FMS).
For more information visit the company’s website at www.freseniusmedicalcare.com.
Disclaimer
This release contains forward-looking statements that are subject to various risks and uncertainties. Actual results could differ materially from those described in these forward-looking statements due to certain factors, including changes in business, economic and competitive conditions, regulatory reforms, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Fresenius Medical Care AG & Co. KGaA's reports filed with the U.S. Securities and Exchange Commission. Fresenius Medical Care AG & Co. KGaA does not undertake any responsibility to update the forward-looking statements in this release.
Fresenius Kabi has started work on a major expansion of its production site for medical devices in Haina, Dominican Republic, which will create about 500 new jobs. At a groundbreaking ceremony yesterday attended by the country’s President Danilo Medina, the cornerstone was laid for the approximately 7,400-square-meter (80,000-square-foot) expansion. It will significantly increase capacity in Haina through the addition of new plasma kit assembly lines, injection molding equipment, sterilization units and dedicated warehouse space.
Completion of the expansion is scheduled for late 2019. The new employees, including production workers, technical personnel, engineers and managers, will join a Fresenius Kabi workforce in Haina that currently numbers about 3,000. The total investment is more than €20 million ($25 million).
The Haina plant manufactures and exports apheresis systems for plasma and platelet collection as well as medical devices for blood separation. These products are used, for example, to allow blood components to be separated while the blood is being donated, making it possible for these life-saving donations to be used more quickly and efficiently.
Mats Henriksson, CEO of Fresenius Kabi, said the products manufactured by the company in the Dominican Republic are important in the provision of healthcare far beyond the country. “Our employees here in Haina do an excellent job, and will continue to produce high-quality medical devices that provide healthcare professionals with the equipment they need to help their patients,” Henriksson said.
Also on hand for the ceremony was Dr. Christian Hauer, President Medical Devices Division of Fresenius Kabi. “This expansion will enable us to reach new potential in regard to our production capacities,” Hauer said. “Our strong commitment to our production site in Haina will benefit even more patients, and allow us to play an even greater role in improving the lives of chronically and critically ill people around the world.”
Caption for press photo:
Front row from left to right: Bernardo Alvarez, General Plant Manager Haina, Christian Hauer, Board Member of Fresenius Kabi and President of the Medical Devices Division, Mats Henriksson, CEO of Fresenius Kabi, Danilo Medina, President of the Dominican Republic, Manuel Tavares, CEO PIISA Industrial Park, Luisa Fernandez, Free Zone Council Director, Nelson Toca, Minister of Commerce and Industry of the Dominican Republic, Ramon Fadul, Labor Minister of the Dominican Republic, Tommy Galan, Senator of San Cristobal Province
This release contains forward-looking statements that are subject to various risks and uncertainties. Future results could differ materially from those described in these forward-looking statements due to certain factors, e.g. changes in business, economic and competitive conditions, regulatory reforms, results of clinical trials, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. Fresenius does not undertake any responsibility to update the forward-looking statements in this release.