Rank: #26 (Last year: #22) €4.25 Billion ($4.43 Billion)
Prior Fiscal: €4.06 Billion
Percentage Change: +4.6%
R&D Expenditure: €183M
No. of Employees: 111,513
Global Headquarters: Bad Homburg, Germany

For the first time in March 2024, Fresenius Medical Care (FMC) developed and used augmented reality (AR) to train medical staff in intensive care units (ICUs). The new training application for ICU staff combines digital learning elements with real-life training on the company’s continuous kidney replacement therapy system.

The AR glasses stream visual and acoustic recordings as users interact with a dialysis machine to provide an immersive learning experience. They offer self-guided, on-demand education—users train how to set up the machine, how to activate the citrate pump, or how to handle several system components through the AR training.

The Ready4 multFiltratePRO AR application launched in select markets in the second quarter of 2024 and was subsequently made available to the company’s Europe, Middle East and Africa as well as Asia Pacific regions. Later in the year, it rolled out in a limited launch in the U.S. A full launch was expected this year.

Ready4 multiFiltratePRO AR has been specifically developed for use with the multiFiltratePRO, continuous kidney replacement therapy system. Today, the multiFiltratePRO is used in more than 40 countries globally.

“We have a dedicated focus on leveraging advanced technology to develop and provide the most innovative technologies, engineered to facilitate and simplify the learning process,” said Dr. Katarzyna Mazur-Hofsäß, member of the Management Board of Fresenius Medical Care AG and responsible for Care Enablement, Fresenius Medical Care’s MedTech segment. “Our innovative solution is designed to ensure that nursing staff, particularly those in Intensive Care Units, are equipped with the knowledge needed to provide high-quality and exceptional patient care.”

Fresenius Medical Care pocketed €4.25 billion ($4.43 billion) of healthcare products revenue in its fiscal year 2024, rising 4.6% from the prior year’s total. 2024 was the second year of a three-year transformation for the company, with major structural and legal changes undertaken in 2023. Last year, the company’s focus was on operationalizing and further optimizing the new operating model.

The company unfortunately began its year with a Class I recall of its Ivenix large volume pump (LVP). Fresenius Kabi recalled the pump because some units had mechanical issues with the fluid valve pins inside the pump’s internal housing that cause the pins to move improperly.

Instead of going to the correct location, they impact the side of the sensor. When this happens, the system detects the failure and sounds an alarm, stopping the infusion if it’s in progress and preventing the pump from working. The failure can also be detected during the LVP setup, causing a delay in beginning treatment.

Customers were urged to increase clinical monitoring if life-sustaining medications are being delivered using the pump. Different pumps should be used if the LVP shows a Pump Problem alarm during setup, and removed should the LVP exhibit a Pump Problem alarm during use.

In February 2024, the company began a deal to sell some assets of its Spectra Laboratories business, which provides renal-specific lab testing services in the U.S., to Quest Diagnostics. Under a separate agreement, Quest will also offer comprehensive lab services related to end-stage kidney disease (ESKD) and specialized water testing for those served by FMC-operated dialysis centers, as well as wholly owned and joint-venture partners of FMC in the U.S.

The arrangement also allows Fresenius Medical Care more operational efficiencies and patients at dialysis clinics can benefit from Quest’s clinical leadership and diagnostic innovation in chronic kidney disease and transplantation services. Financial terms weren’t disclosed and the acquisition is expected to close in the second half of this year.

The company received U.S. Food and Drug Administration (FDA) 510(k) clearance for its 5008X hemodialysis system in February 2024. The FDA nod brought high-volume hemodiafiltration (Hv-HDF) dialysis therapy, already used in Europe, to the U.S.

Unlike conventional high-flux hemodialysis, which mainly uses diffusion to remove small molecules and fluid from the blood, Hv-HDF leverages both diffusion and convection techniques to remove larger molecules and manage fluid replacement through convection. The company’s CONVINCE study showed patients treated with high-volume hemodiafiltration had a 23% decrease in mortality rates compared to those treated with high-flux hemodialysis. Broad market launch began in June.

The company sold its dialysis clinic networks in Brazil, Colombia, Chile, and Ecuador to DaVita for $300 million in March. These four separate transactions in aggregate represented 154 dialysis clinics, over 7,100 employees, and more than 30,000 dialysis patients. The transactions were another milestone in Fresenius Medical Care’s portfolio optimization program, and each closed at the end of last year.

In September, Fresenius Medical Care announced over 14,000 U.S.-based patients used the company’s NxStage systems for home hemodialysis (HHD) through Fresenius Kidney Care clinics and other providers. In parallel, it launched NxStage VersiHD with GuideMe software, the newest version of the home dialysis machine.

VersiHD with GuideMe software features pictorial-based guidance to assist with setup, treatment, and troubleshooting while improving training time and skill retention. Graphical walkthrough guidance aims to enhance ease of use for patients and nurses. The interface was also designed to accommodate a variety of learning styles and boost skill retention from initial training, while static picture instructions let patients linger and study any step at their own pace.

The Xenios 2.0 extracorporeal life support (ECLS) system was introduced in October. Already approved through the EU MDR, Xenios 2.0 can be used for the full range of ECLS treatment, from neonatal to adult patients.

The device has a redesigned graphical user interface (GUI) to support relevant handling steps and functions before and during treatment. It also touts power function monitoring and integrated pressure sensors to remove the risk of air aspiration, and measures pressure at the tubing kit. An intelligent alarm offers recommendations for action in the event of certain physiological and technical alarms.

Two backup battery packs supply the system during power failure or interruption, and a second pump drive can be used if the initial pump drive fails. Comprehensive step-by-step explanations and illustrations during the priming procedure help to avoid user errors, and the system supports the simple implementation of standards-based medical data.

€5.34 Billion ($5.89 Billion)
Prior Fiscal: €5.35 Billion
Percentage Change: -0.15%
R&D Expenditure: €232M
Best FY23 Quarter: Q4 €1.38B
Latest Quarter: Q1 €1.29B
No. of Employees: 119,845 (total)

Some things are arguably better as a pair: peanut butter and jelly (debatable, perhaps), milk and cereal, movies and popcorn, soap and water, pen and paper, sodium and chlorine (common salt), and bat and ball, to name a handful.

There are also things that should never mix, like peanut butter and almost anything (taste bud-dependent), bleach and vinegar (chlorine gas producer), peroxide and vinegar (peracetic acid maker), and aluminum and iron (explosive material producer).

Companies often wind up on either end of the mashup spectrum while charting their long-term growth strategies through M&A, spinoffs, and divestitures. Walt Disney, for example, landed on the “perfect pairing” side by hooking up with Pixar in 2006. The deal helped Disney modernize its animation capabilities, and gave Pixar access to its partner’s vast distribution network and funds. As a team, the pair have produced such box-office blockbusters as “WALL-E,” “UP,” “Inside Out,” “Cars 2,” “Toy Story 3,” and “Inside Out 2,” the latter of which has grossed $1 billion (and counting) in global box office sales.

Better together.

Microsoft, conversely, turned up on the opposite end (“mismatched mates”) with its $7.2 billion acquisition of Nokia’s mobile phone division in April 2014. Microsoft initiated the deal with the hope of gaining mobile phone market share against Apple and Google, but the union failed to improve the popularity of Nokia’s Windows phones. Just two years after the acquisition, Microsoft sold Nokia to HMD for $350 million.

Better apart.

Fresenius and its subsidiary, Fresenius Medical Care, seem likely headed for Microsoft-Nokia’s end of the spectrum. In order to improve its fiscal health—partly tarnished by its unit’s pandemic-related struggles—Fresenius ceded control of FMC last year by converting the subsidiary to a German stock corporation. The conversion turned Fresenius Medical Care (FMC) into a separate entity from its parent organization, with its own management structure, its own financial reporting system, and decision-making autonomy. Fresenius, however, is still FMC’s largest shareholder with a 32.2% ownership stake.

“[The] decision of our shareholders to convert Fresenius Medical Care into a German stock corporation opens a new chapter in the development of the company,” Fresenius Medical Care AG CEO Helen Giza said. “I strongly believe that following the conversion, the decision-making processes will be accelerated. Therefore, we will be more agile in our efforts in unlocking value…”

Fresenius shareholders voted last July to change FMC’s legal form, and elected four members to its new Supervisory Board: Shervin J. Korangy; Dr. Marcus Kuhnert; Gregory Sorensen, M.D.; and Pascale Witz. The (parent) company also appointed its CEO and chairman of the management board, Michael Sen, and CFO, Sara Hennicken, to the board; another six members will be elected by employees at a later date. The governing body has supervisory responsibilities similar to other corporate boards—i.e., strategy reviews, management appointments, renumeration, audits, and management decision approval.

FMC officially completed its transformation from a partnership to a German stock corporation (Aktiengesellschaft, AG) on Nov. 30, 2023. It began trading under its new name, Fresenius Medical Care AG, the next day.

“The deconsolidation is a historic landmark,” Fresenius Medical Care AG Supervisory Board Chair Michael Sen stated upon FMC’s official change in legal form. “Fresenius Medical Care gains significantly more freedom and flexibility to ultimately create value for its shareholders and patients.”

Maybe so, but that value creation could take some time. While FMC’s share price ended 2023 7.39 points higher than the previous year and total dividend payout improved by €20 million, total revenue was flat, rising only €56 million. Operating income and net income were down compared with fiscal year 2022, falling 9.4% and 182% respectively (operating income totaled €1.37 billion and net income ended FY23 at €732 million), according to FMC’s inaugural annual report.

FMC had expected operating income to grow 12% to 14% compared to fiscal 2022 based on a €175 million ($191.2 million) settlement with the U.S. government over past Tricare program payments. The settlement—announced in November 2023—ended the company’s four-year battle to recover outstanding Tricare program payments from the U.S. Department of Defense (DoD). The program reimburses military service members, their dependents, and retirees for medical dialysis and medical care expenses.

FMC lodged a complaint against the DoD after discovering that Tricare administrators were trying to lower the reimbursement rate for dialysis services through revised invoice codes. The administrators admitted to taking such measures but refused to modify or terminate the action.

FROM THE TOP: “The year 2023 was a transformative one for Fresenius Medical Care, as we set out to achieve important structural, operational, and cultural changes. Last year was not only a year of great structural change but also of operational performance turnaround and improving financial key performance indicators.”

—Helen Giza, CEO and Management Board Chair

While the DoD’s payment failed to boost FMC’s FY23 operating income as predicted, it nevertheless helped the company reduce its debt. According to the annual report, net financial and total debt—including lease liabilities—decreased by €1 billion in 2023.

“Last year was not only a year of great structural change but also of operational performance turnaround and improving key performance indicators,” Giza told shareholders in the annual report prelude. “At the same time, we continued to successfully execute on our FME25 transformation program. We achieved annual sustainable savings of 346 million euros, ahead of our initial plan for the year (250 to 300 million euros). The program continues well on track to achieving the targeted 650 million euros of sustainable annual savings by year end 2025.”

Under its new corporate structure, FMC reorganized its business to comprise two global operating segments—Care Delivery and Care Enablement.

Care Delivery encompasses services for treating end-stage renal disease and other extracorporeal therapies, including value- and risk-based care programs. This segment also covers pharmaceuticals.

Care Enablement comprises R&D, manufacturing, supply chain, and commercial operations, as well as supporting functions like regulatory and quality management. The products business is organized along the three treatment modalities FMC serves: In-center, Home, and Critical Care.

Revenue in both reporting segments remained relatively flat last year—Care Delivery sales tumbled by €15 million to €15.57 billion, and Care Enablement proceeds slid €8 million to €5.34 billion. FMC attributed the stagnant Care Enablement revenue to the counteraction between negative foreign currency exchange rates and increased sales of in-center disposables, machines for chronic treatment, home hemodialysis products, critical care products (including those for acute care treatments and acute cardiopulmonary products), and renal pharmaceuticals. The flatlining revenue also reflected product price hikes and robust demand for dialysis treatment solutions in certain countries.

Some of the same neutralizing factors also beget a €67 million operating loss in the Care Enablement segment last year. FMC blamed the decline specifically on inflationary cost increases, foreign currency exchange rates, and legacy portfolio optimization, though the deficit was somewhat limited by product price increases, higher sales volume, and net savings from the FME25 Program.

“Through a clear focus on strengthening the core business and further operational and structural efficiencies, the company aims to return to a sustainable profitable growth path and improve the creation of shareholder value,” Sen stated in FMC’s annual report prelude. “For 2024 and beyond the foundation for sustainable, value-creating growth has been laid.”

And part of that foundation will be built with innovations born last year. In April, the company received a CIO 100 Award for its efforts to develop a tool that can predict intradialytic hypotension (IDH) before it occurs in hemodialysis patients. A common and serious complication in patients with chronic hemodialysis, IDH reduces the efficacy of dialysis and can lead to death.

Four months after its award recognition, the U.S. Food and Drug Administration granted FMC 510(k) clearance for the GuideMe software upgrade to the NxStage VersiHD system. The new software provides graphical walk-through guidance that aims to enhance ease of use and improve confidence for both patients and nurses. The software is designed to make the training experience easier for patients, more efficient for nurses, and ease the transition to home dialysis.

€5.42 Billion ($5.79 Billion)
Prior Fiscal: €5.84 Billion
Percentage Change: -7.2%
R&D Expenditure: €852M
No. of Employees: 316,920 (total)

Shuffling C-suite executives in the Top 30 is nothing new, but Fresenius moved around quite a few of its top leaders in its fiscal year 2022.

In May, the company revealed former BSH Hausgeräte GmbH leader Dr. Carla Kriwet would succeed 10-year Fresenius Medical Care (FMC) leader Rice Powell on Jan. 1 as CEO due to Powell reaching the age limit (66) for management board members. Dr. Kriwet also had a seven-year stint with fellow Top 30 denizen Philips in various management roles.

However, in December, FMC announced that Helen Giza was instead appointed CEO because Dr. Kriwet would leave the company at her own request and by “mutual agreement due to strategic differences.” Giza had been FMC’s CFO since 2019, and took on the roles of deputy CEO and chief transformation officer in 2022. Prior to that, she was chief integration and divestiture management officer at Takeda Pharmaceuticals since 2018.

Moving back to May, investment banking veteran and Fresenius Senior VP Global Treasury & Corporate Finance Sara Hennicken was named CFO, effective Sept. 1 of last year. She succeeded Rachel Empey, who had been Fresenius CFO since August 2017 and left the company at her own request.

Finally, in August, Fresenius named Fresenius Kabi leader Michael Sen as CEO of the company and he took the reins on Oct. 1, 2022. He replaced Stephan Sturm, who had been CEO of Fresenius since 2016 and had worked for the company since 2005, beginning as CFO.

“Fresenius has always been more than just a job to me,” Sturm said in a press release detailing the CEO change. “This company was and is still close to my heart. I look back with gratitude and pride on my more than 17 years here, during which we accomplished a lot together and developed Fresenius into a leading global healthcare company.”

“I’m very pleased about the trust being placed in me and in my capabilities,” added Sen. “I am taking on leading this company, which brings both great responsibility and excitement, with respect but above all with great joy and confidence.”

Fresenius’ medical device revenue is made up of FMC’s Health care products segment and Kabi’s MedTech products business. Together, the businesses accrued €5.41 billion ($5.79 billion) of revenue last year, dropping 12.4% from its previous fiscal year. FMC raked in €1.44 billion in sales from MedTech products, rising 6% over the prior year. The company’s annual report cites higher sales of in-center disposables as the main driver, which were offset by reduced sales of machines for chronic treatment.

The segment achieved FDA 510(k) clearance for its VersiPD portable, automated peritoneal (PD) system in April. It lets PD patients have restful sleep thanks to almost silent operation, fewer disruptive alarms, and night mode. The cycler features more personalized programming as well as a large touchscreen, and embedded videos with audio guidance assists users through setup and treatment. VersiPD’s cycler battery and custom cart further facilitate mobility around the home, as well.

Fresenius Kabi earned €1.44 billion from MedTech products in fiscal year 2022.

Kabi began proceedings to acquire infusion therapy systems maker Ivenix last March, and finished the transaction in May. The company added a large volume pump with administration sets, infusion management software tools, applications, and analytics to Kabi’s arsenal. The Ivenix Infusion System is engineered to minimize infusion-related errors and slash total cost of ownership. The system earned FDA approval and was launched in late 2021.

Also in March, Fresenius Kabi earned FDA 510(k) clearance for its wireless Agilia volumetric pump and Agilia syringe pump with Vigilant Software Suite-Vigilant Master Med technology. The products allow centralized distribution of drug libraries, infusion data warehousing for reporting and analysis, and wireless device maintenance and calibration. Both pumps are the first to be cleared by following AAMI’s TIR101 standards, according to the company.

October saw Kabi’s release of the Gadoterate Meglumine injection USP, a bioequivalent and therapeutic equivalent substitute for the Dotarem contrast agent. According to the company, contrast agents are a new category of healthcare products for Kabi.

€5.84 Billion ($6.61 Billion)
Prior Fiscal: €5.84 Billion
Percentage Change: 0%
R&D Expenditure: €818M
No. of Employees: 316,078 (total)

Late last year, Fresenius Medical Care (FMC) announced to the press it would be spending €450 million to fund restructuring of its operations into two divisions—care enablement and care delivery.

According to Bloomberg, this meant the company would plan to eliminate as many as 5,000 full-time positions as patient deaths from COVID-19 shrank the German kidney dialysis company’s revenue prospects.

Beyond the lost revenue from patient deaths, the firm also faces increased costs from safety measures and inflation. Dialysis patients are at a heightened risk of severe COVID and throughout the pandemic, according to the company, over 18,000 FMC patients died than would be expected from historical trends.

The company expected revenue and profit at the lower end of its guidance range at the time. FMC had forecast fatality rates to return to pre-pandemic levels by summer, but the Delta wave caused 2,700 more patient deaths in Q3 than expected.

Sales in Fresenius Medical Care (FMC) decreased by about 1% to reach €17.62 billion. (Medical device products make up 21% of this business). The sales decline was driven by negative exchange rate effects, partially offset by organic growth despite COVID-19 headwinds and lower calcimimetics reimbursement. Higher sales of chronic treatment machines and home dialysis products were offset by lower acute care treatment products.

FMC expanded its critical care offering last January via a co-marketing and distribution agreement with ExThera Medical for the Seraph 100 adsorber. Seraph 100 removes extracorporeal pathogens from blood and can be used with FMC acute dialysis machines. The technology has been CE-certified since 2019 to reduce pathogens during bloodstream infections in addition to anti-infective therapy.

The company made its dialysis clinics available for COVID-19 vaccination last March. Dialysis patients are an especially high-risk group for the virus because they average over 65 years old and often have other diseases and a weakened immune system.

A new technology center for developing Fresenius dialysis machines opened last April at the company’s Schweinfurt, Germany, site. The 220 employees from varying departments will collaborate on a project basis in the new 7,500-square-meter, five-floor building. The company had invested €22 million in the new facility, whose opening ceremony was an entirely virtual event.

Last August, FMC began using virtual reality (VR) to train patients in using continuous ambulatory peritoneal dialysis (CAPD). The stay•safe MyTraining VR was offered in Germany first, then extended to other Europe, Middle East, and Africa regions later in the year. The hardware comprises VR glasses and a controller. Patients learn hygiene procedures, preparation and post-therapy steps, bag-changing, and operation of the stay•safe DISC in various training modules. Each module can be adjusted to the patient’s pace and repeated as needed until it’s been mastered. The VR glasses even allow users to learn how to handle the system before catheter implantation.

Also in August, Fresenius Medical Care invested a further $25 million in Humacyte. FMC had acquired a $150 million stake in the regenerative medicine company in 2018. Humacyte is developing implantable human acellular vessels for multiple vascular repair, reconstruction, and replacement. These biologically produced blood vessels are made from banked human smooth muscle cells; they’re manufactured to be non-immunogenic and will be available “off the shelf.” when needed. The collaboration had also been expanded two months prior for FMC’s exclusive marketing of the human acellular vessel outside the U.S.

In November, Fresenius Medical Care launched its new FX CorAL dialyzer for hemodialysis. The dialyzer features a new Helixone hydro membrane that forms a gel-like layer of water on the inner membrane’s surface that reduces protein adsorption while blood is cleaned. This helps to achieve lower patient immune response induction while keeping high selective permeability for the removal of toxin and excess water.

CorAL is the newest dialyzer in FMC’s FX class of dialyzers that use polysulfone plastic for exceptional filtering and hemocompatibility. The dialyzer’s fiber structure ensures that dialysis fluid washes evenly around each fiber to improve clearance.

The Fresenius Kabi division’s proceeds rose 3% to €7.19 billion. There was continued demand for essential medicines and devices for COVID-19 treatment, offset by fewer elective treatments. In North America, supply constraints due to temporary production delays and increased competitive pressure strained sales. Strong growth occurred in Asia-Pacific due to elective treatment normalization in China and sustained recovery in other Asian markets.

Last February the firm began a more than €60 million investment into its Graz, Austria, production plant and nearby Werndorf, Austria, packaging center. The investments will focus on the freeze-drying area and lines for filling and packing glass bottles and prefilled syringes.

Siemens AG board member Michael Sen began his tenure as Fresenius Kabi CEO in April. He replaced nine-year leader Mats Henriksson, who left the company because of differing views on Fresenius Kabi’s future direction, according to a company statement. Sen was also CFO of Siemens Healthcare from 2008-2015.

“…I look forward to working with Michael Sen in the future,” Fresenius CEO Stephan Sturm told the press. “Fresenius Kabi’s business addresses several attractive growth areas in medicine. It is and will remain of central strategic importance for our healthcare group.”

Last May, Fresenius Kabi began an agreement with Corvida Medical to become the exclusive U.S. distributor for the HALO closed system drug-transfer device. The airtight, leak-proof device mechanically stops environmental contaminants from entering the system as well as prevents escape of drug or vapor concentrations outside the system. This minimizes individual and environmental exposure to drug vapor, aerosols, and droplets.

In September, the firm partnered with Health Care Logistics (HCL) in order to improve the efficiency of drug replenishment in hospitals and increase patient safety throughout their medication use. The collaboration made Fresenius Kabi’s +RFID smart-labeled medications usable with HCL’s Stat Stock inventory control solution. The automated RFID-based system can cut replenishment time in half and keep expired medications out of rotation. Kabi rolled out the first of its many planned +RFID smart-labeled medications in September 2020.

December saw a partnership with Omnicell to provide U.S. healthcare systems with new pharmacy tech for safety and efficiency to dispense controlled substances in patient care areas. Omnicell designed new cassettes for its Controlled Substance Dispenser specifically for Fresenius Kabi Simplist MicroVault pre-filled syringes. The new cassettes provide more flexibility and enhanced options for controlled substance management.

$6.22 Billion ($44.55 Billion)
Prior Fiscal: $5.50 Billion
Percentage Change: +13.1%
No. of Employees: 125,364 (total)

Anvil Nelson Jr. refuses to be defined by his illness.

The 64-year-old entrepreneur lost his first kidney in 2003 and surrendered his second to cancer 14 years later, but neither forfeiture has dramatically changed his modus vivendi. If anything, the losses have made Nelson more determined than ever to live his life as fully and normally as possible.

And he’s managed to do just that.

Besides running his own chemical manufacturing firm (QVS Inc.) two hours away from his Nashville, Tenn., home, Nelson is a board member of both the city’s Rescue Mission, a Christian charity organization, and the Tennessee Kidney Foundation.

In addition, Nelson maintains a leadership role at his church—a position he’s held for more than 20 years—and officiates at college and state-level track and field competitions. He also spends as much time as he can with his wife and two children, who live nearby.

“I have a pretty busy life,” he said with a chuckle. “My family actually thinks I’m too busy.”

Maybe so, but Nelson still makes time for life-sustaining weekly hemodialysis treatments, which he schedules around work, family and community obligations. Nelson initially underwent treatment at a dialysis center (after recovering from cancer surgery), but found it too time-consuming and exhausting.

“It was very rigorous, because you had to schedule it and stay there for a few hours,” he recounted in a patient story posted online. “I booked my treatments for 5 a.m. on Mondays, Wednesdays, and Fridays, so I could use the rest of the day, but that meant getting up around 4 o’clock in the morning to drive there. After getting treatment, you need time to recover. Often, I couldn’t even manage to drive to work in Chattanooga on Mondays after dialysis because I had to rest. I wanted to keep on living my life and not be tied to a center. That’s why I initially considered peritoneal dialysis as it was the only way I could continue working as usual.”

Nelson eventually found a better way, though: Home hemodialysis, courtesy of a portable system from Fresenius Medical Care. Cleared by the U.S. Food and Drug Administration in August 2017, the NxStage System One is a portable hemodialysis solution cleared for home daytime or nocturnal use. The easily transportable machine features a uniquely designed volumetric balancing system that provides scaleless fluid accuracy and reduces waste bag disposal noise. NxStage allows patients to individualize their own therapy based on their conditions and needs (continuous renal replacement therapy, intermittent hemodialysis, sustained low-energy dialysis, prolonged intermittent renal replacement therapy, ultra filtration, or therapeutic plasma exchange).

Additionally, the NxStage System comes with an app for the electronic collection and transmission of treatment information. The app has automated flowsheets to simplify data tracking and recording.

Notifications provide reminders or support for operational issues; pop-up notifications help patients troubleshoot problems when alarms go off, according to Fresenius. User guides, instructions, and a keyword search tool are other features designed to streamline overall operations and debugging.

“It gives me a lot of flexibility,” Nelson said of the NxStage System. I usually choose to do treatment in the afternoon or early evening after work. That means I don’t have to dress up and leave the house. I don’t want to make it sound too rosy, but home dialysis is a great opportunity. I can really get on with my life, run my business, and even travel.”

Already on the rise in 2019, home dialysis became considerably more prevalent last year during the global pandemic. Fresenius Medical Care—one of the top two U.S. dialysis providers—reported a 25 percent boost in home dialysis training sessions during Q1 2020 and a 14 percent gain in home treatments last year vs. 2019. Before the coronavirus emerged, the company served more than 25,000 dialysis patients at home and reported record growth of its in-home program (expanding at nine times the rate of its in-center dialysis offerings).

“The pandemic and the requirement for social distancing, and at times, isolation, have highlighted the advantages of dialysis at home,” Jeffrey Hymes, M.D., chief medical officer for Fresenius Kidney Care (part of Fresenius Medical Care North America), told Renal & Urology News last April. “We expect the increased interest in home dialysis will continue even after the acute crisis passes and help expand the strong growth in home dialysis we have experienced over the past year.”

Helping to foster that growth was a federal push two summers ago to reduce end stage renal disease spending by 2025 and mounting clinical evidence of home treatment benefits (lower costs, less time-consuming, fewer deaths). Meanwhile, dialysis providers such as Fresenius Medical, Outset Medical Inc., and DaVita Kidney Care began preparing for the shift to home dialysis by modifying their product portfolios through innovation and/or acquisition.

Fresenius chose the latter path, purchasing Boston-based NxStage Medical Inc. for $2 billion in a deal that extended the company’s reach beyond the clinic. Finalized in February 2019, the purchase instantly augmented Fresenius’ product lineup with portable dialysis machines (like Nelson’s NxStage System One) for home or clinical use. The investment was a sound one, as NxStage generated $300 million in sales for its parent firm in 2019, according to Fresenius financial reports.

Last spring, Fresenius integrated the NxStage portfolio in Europe, the Middle East, and Africa, where about 7 percent of patients purify their blood at home.

Besides the NxStage Medical purchase, Fresenius also has bolstered its home dialysis prowess via remote patient monitoring and telehealth technology. In July 2019, for example, Fresenius invested in Denver-based BioIntelliSense, developer of a medical-grade data services platform for continuous health monitoring, predictive analytics, and algorithmic clinical insights. Three months later, the company launched a connected health platform (TheHub) designed to help patients, caregivers, and providers better collaborate and monitor treatments.

In addition, Fresenius has created a new global medical office to spearhead its R&D and share best practices throughout its dialysis clinics.

“…we continue to make good progress with our expansion of home dialysis,” Fresenius Management Board Chairman Stephan Sturm told shareholders in a letter within the company’s 2020 annual report. “We have now successfully completed the integration of the NxStage portfolio in the Europe, Middle East, and Africa region. This will enable us to offer even more patients a greater choice of treatment methods, especially treatment in their home environment. Already in the United States, 14 percent of the dialysis treatments we provide are performed in patients’ homes. Dialysis at home offers many advantages and demand is rising steadily in many regions. The pandemic has further strengthened this trend.”

The trend helped boost sales last year, but not by much. Fresenius Group revenue rose 2 percent to 36.3 billion euros, driven in part by increases in three of its four business segments. Fresenius Medical Care and Fresenius Kabi proceeds improved 2 percent and 1 percent respectively,  with health care product revenue within the Medical Care division swelling 4 percent to 3.74 billion euros. However, Fresenius Helios’ 6 percent gain was obliterated by an equivalent decrease in Fresenius Vamed sales.

Group gross profit was flat at 10.31 billion euros, and net income fell 7 percent to 2.82 billion euros, according to the company’s annual report. Earnings per (ordinary) share slipped 4 percent to 3.22 euros.

“Earnings declined for the first time in many years, 3 percent in constant currency,” Sturm noted in his shareholder letter. “Under the circumstances, it was a successful business year, though not a year of dynamic growth. It was certainly not the kind of year that people have come to expect from us nor was it what we expected early last year, before the coronavirus struck.”

Expectations aside, Fresenius weathered the pandemic with relatively minor damage thanks to a diversified portfolio that shielded the firm from the financial repercussions of repeated lockdowns and social distancing. Fresenius also benefited from surging demand for its critical care devices (it increased production of those products at the pandemic’s height) and home hemodialysis services (household treatments skyrocketed 41 percent in North America during Q2 2020).

Yet Fresenius couldn’t fully insulate itself from COVID-19’s fallout. Its Kabi and Helios segments—the latter, Europe’s largest hospital operator—fell victim to the postponement/cancellation of elective surgeries, while waning interest in rehabilitation services and health tourism, and fewer dollars for capital projects handicapped Vamed’s sales. Dialysis products and services took a substantial hit in Q4 2020 as the virus claimed a significant number of chronic kidney disease patients during its second lap around the world.

During COVID-19’s initial run, Fresenius gained U.S. Food and Drug Administration clearance for the Novalung extracorporeal membrane oxygenation (ECMO) system, used to treat acute respiratory or cardiopulmonary failure. Novalung was the first ECMO system to be cleared for more than six hours of use as extracorporeal life support, according to Fresenius Medical Care North America (FMCNA).

The Novalung System is indicated for long-term respiratory/cardiopulmonary support; it provides assisted extracorporeal circulation and physiologic gas exchange (oxygenation and CO2 removal) of blood in adults suffering from acute respiratory failure or acute cardiopulmonary failure.

The therapy is designed for use in clinical care settings such as intensive care units, operating rooms, cardiac catheterization labs, and emergency departments, for patients where other available treatment options have failed and continued clinical deterioration is expected, or the risk of death is imminent. These may include:

• Failure to wean from cardiopulmonary bypass following cardiac surgery in adult patients; or
• ECMO-assisted cardiopulmonary resuscitation in adults.

The use of Novalung as an ECMO device for critical care has several benefits, including minimizing the need for invasive ventilation, the ability to provide support after multi-organ injuries, and better survival outcomes for patients in cardiac arrest, according to FMCNA. This integrated heart and lung therapy platform provides the lifesaving support needed for patients in critical conditions.

“Novalung is a critical leap forward in providing heart and lung support therapy for a longer duration than ever available before,” Mark Costanzo, president of FMCNA’s Renal Therapies Group, said upon the product’s clearance in February 2020. “We’ve applied our leadership and technical expertise in renal medical devices to elevate standards for acute respiratory and cardiopulmonary failure treatments and technologies. We’re proud to broaden our care offerings to provide new therapies for patients with acute cardiopulmonary conditions.”

$6.37 Billion ($39.8B total)
Prior Fiscal: $6.06 Billion
Percentage Change: +5.1%
No. of Employees: 290,000 (total)

After months of feeling progressively run down and changing his workout and diet to no avail, 50-year-old personal trainer Sovereign “Sov” Valentine finally drove himself to a hospital in the small town of Plains, Mont. He was diagnosed with kidney failure and received a dialysis session, and was instructed to follow up with outpatient dialysis three times a week.

The nearest dialysis center was a Fresenius Kidney Care clinic 70 miles away. Adding to the trouble, a few days after treatments began, the Valentines were informed Fresenius was out of network. Their insurer, Allegiance, only covered about $16,000, resulting in a near $525,000 bill. (According to NPR, this tops the cost of a kidney transplant).

These exorbitant prices are a result of what health economists call a “duopoly” in the dialysis care market. Fresenius and DaVita are the dominant U.S. dialysis care providers, so they can demand extreme prices for their treatment. Thanks to a 1973 law, end-stage renal care patients like Sov can enroll in Medicare before 65—after a 90-day waiting period. Patients are especially vulnerable during that time.

When Sov’s wife Jessica opened the first bill, she cried. “It was far worse than what I had imagined would be the worst-case scenario,” she told NPR.

Dialysis centers claim they make little to no profit on Medicare rates (which make up the majority of their customers thanks to the 1973 law) to justify high charges to commercially insured patients. But Sov’s sessions amounted to an extraordinary nearly $14,000 each.

The Valentines quickly took their debacle to the press. Less than a week after NPR, Kaiser Health News, and CBS This Morning shared Sov’s story, a Fresenius rep told his wife, Dr. Jessica Valentine, the company would waive the unpaid bill. They were instead treated as in-network patients, only responsible for a $5,000 deductible that Sov had already hit for the year.

Fresenius spokesman Brad Puffer said the Valentines should have been considered in-network patients from the start.

“In the future, we pledge to better identify situations where we believe the insurer has incorrectly classified one of our facilities as being out of network,” he promised in a statement. “This will allow us to address the matter directly with the insurer in the first instance, without them placing the patient in the middle.”

Dialysis companies have indeed remained profitable. Fresenius’ medical device revenue—which consists mainly of dialysis products, transfusion technology, and related accessories—jumped 5.1 percent to $6.37 billion in fiscal 2019. Fresenius Medical Care, the company’s chronic kidney failure product and service provider, had health product sales that rose 10 percent thanks to clinical network expansion, new product launches in China, and the acquisition of NxStage Medical.

Fresenius’ Medical Care unit closed the $2 billion deal for the home dialysis device maker after a year and a half of negotiations last February, following an extended end-date due to last January’s government shutdown. The combined company will accelerate its move toward home treatments by leveraging manufacturing, supply chain, and marketing competencies in a less labor- and capital-intensive environment.

“By combining NxStage’s capabilities with our broad product and service offering, we can help patients to live even more independently,” Bill Valle, CEO of Fresenius Medical Care North America, said in a statement. “In addition to broadening our product portfolio, this acquisition positions Fresenius Medical Care to benefit from the growing trend toward home-based therapies.”

Profits were tempered somewhat when Fresenius Medical Care paid nearly $232 million in penalties last March to resolve conduct in countries outside the U.S. that might violate the Foreign Corrupt Practices Act that it had voluntarily shared in 2012. Fresenius also agreed to engage an independent compliance monitor for two years.

The Medical Care business released the 4008A dialysis machine last January. Its main target was emerging markets—it was mainly deployed in India with other countries across the Asia-Pacific region that followed. The 4008A includes safety and handling standards like essential cleaning functions and battery backup. It was designed to be robust and easily handled for use in demanding infrastructure and remote locations. The machine also uses ultrapure dialysis fluid.

The company won two FDA breakthrough device designations last year. The first came in March, for computer-assisted ultrafiltration software to improve fluid management during hemodialysis and personalized treatments. The software is designed to work with newer Fresenius Medical Care dialysis machines using the company’s CLiC device, which enables relative blood volume monitoring.

The second was for a hemodialysis system to prevent blood clotting without use of blood thinners in October. The dialyzer and bloodlines manufacturing process will include the antothrombogenic additive Endexo, a polymer made of surface modifying molecules that inhibit protein and platelet adsorption, to reduce clot risk and boost hemocompatibility.

The firm made two investments in cutting-edge companies last year. The first, announced in July, was BioIntelliSense, a Denver-based company developing a medical grade data services platform for continuous remote health monitoring, predictive analytics, and algorithmic clinical insights. Fresenius and BioIntelliSense hope to create clinical pathways to alert clinicians to the need for early intervention.

The second was a 60 million euros investment to independent affiliate Unicyte AG. Unicyte planned to use the funds mainly to begin clinical trials of its first product candidates this year and establish a manufacturing process. Unicyte has created a set of technology platforms of human liver stem cells (HLSCs), HLSC-derived islets, and nano-extracellular vesicles (nEVs). nEVs are stem cell-derived particles that support cell communication.

“Regenerative medicine could provide highly innovative therapies to chronic kidney disease patients and is becoming increasingly important for our industry,” Rice Powell, Fresenius Medical Care CEO, told the press. “Driving regenerative therapies not only addresses the U.S. administration’s initiative to improve the prevention of end-stage renal disease, but can help us to significantly slow the progression of kidney disease and make the most innovative therapies available to our patients.”

A new global medical office was established to head up work in clinical science and coordinate knowledge across clinics last March. Frank Maddux, a Fresenius employee since 2009 and previous executive vice president and North American chief medical officer, was named as its global chief medical officer at that time. Robert Kossmann was also appointed chief medical officer for North America.

Medical Care also made its previous subsidiary Frenova Renal Research global last July. Frenova offers services for clinical development of medicines and medical products for kidney research. Previously limited to North America, Frenova was linked with corresponding services of Medical Care’s Europe, Middle East and Africa (EMEA) and Latin America regions. The company can now draw on a network of over 550 researchers in over 350 locations.

Fresenius Kabi specializes in therapy and care for chronically and critically ill patients. Kabi’s medical device and transfusion technology business grew 11 percent mainly due to the European launch of the ProNeo portfolio. This product line includes transnasal feeding tubes and accessories for enteral nutrition in neonatal and pediatric wards. The Amicus Blue cell separator for extracorporeal photopheresis was also released in Europe last year. Infusion therapy proceeds grew 3 percent thanks to further infusion solutions business in the U.S.

AT A GLANCE
$6.06 Billion (38.4B total)
Prior Fiscal: $6.0 billion
Percentage Change: +1%
No. of Employees: 276,750 (total)

It started in August 2017 when Fresenius Medical Care—one of the four “groups” that comprise Fresenius—made a bid to purchase NxStage Medical—a manufacturer of end-stage renal disease and acute kidney failure products—for $30 per share in cash. That sparked the beginning of an almost year and a half-long venture to complete a deal that encountered delays virtually throughout the entire timeframe.

Undoubtedly, the transaction was seen as potentially dead more than a couple times, while NxStage’s stock price fluctuated substantially and losses were being reported. The buyout, however, had received the necessary approval of shareholders and passed antitrust clearance in Germany and the U.K. On the other hand, the U.S. Federal Trade Commission (FTC) still hadn’t provided its blessing on the arrangement. An August 2018 deadline to complete the transaction was looming uncomfortably for many stakeholders involved.

Then in July 2018, about a month before the deadline, NxStage sold its bloodlines business to B. Braun for an undisclosed amount. The sale included the Streamline Bloodline for the Dialog+ hemodialysis system, Streamline Bloodline for the Fresenius Medical Care hemodialysis system, and Streamline Bloodline Long for the Fresenius Medical Care hemodialysis system. The divestiture was performed in order to help gain FTC approval of the Fresenius buyout and was made contingent on the closure of that merger.

More positive news soon followed that announcement and kept the prospect of a successful transaction alive. Just before the deal’s deadline was scheduled to arrive, it was pushed back 90 days to Nov. 5, providing NxStage additional time to clear up any lingering questions from the FTC. A second 90-day delay then was agreed upon just prior to the new deadline, which moved any close of the merger to the next calendar year. Fresenius Medical Care’s CEO Rice Powell explained the second delay was also done to provide even more time for the FTC review.

“NxStage will close. We are later in the year than any of us imagined we would be, but we still believe that it will close,” Rice proclaimed to investors.

Finally, on Feb. 22, 2019, Rice was able to make good on his promise. Just a few days after finally obtaining the FTC’s antitrust approval of the merger, Fresenius Medical Care closed its purchase or NxStage Medical that began approximately 18 months earlier, substantially increasing the home dialysis offerings for the company. According to Reuters, Fresenius is targeting 15 percent of its treatments to be performed within the home by 2022; at the end of 2018, that figure was around 12 percent.

The influx of the new revenue stream via the NxStage acquisition will certainly be welcomed by a company that saw a decrease in sales dollars from 2017 to 2018. Fresenius, as a whole, lost approximately $350 million, or about 1 percent, between the two fiscal years, posting 33.89 billion euros in ’17 and 33.53 billion euros in ’18.

Beneficiary of the new capabilities and product offerings tied to NxStage Medical, Fresenius Medical Care already led the conglomerate in terms of highest annual sales. Although it was down just a bit from its 2017 total of 16.74 billion euros, the business contributed a company-leading 16.55 billion euros. The unit, which focuses on products and services for people with chronic kidney failure, is divided into two segments—Health Care Services and Health Care Products. The significantly larger Services portion saw 2018 sales of 13.26 billion euros in 2018, down 2 percent from the prior year. Products, on the other hand, saw a 1 percent gain between the two years, ending up with 3.28 billion euros during the fiscal period.

Looking at the worldwide market, the demand for the Medical Care offerings originate primarily in North America, where 2018 sales came in at 11.57 billion euros (70 percent of the group’s total sales). That figure, however, marked a 10 percent decline over 2017. Growth was observed in Europe/Middle East/Africa (EMEA) and Asia-Pacific, rising 2 percent and 4 percent respectively. EMEA ended 2018 with sales of 2.59 billion euros, while Asia-Pacific finished with 1.69 billion euros. Experiencing a 5 percent decline, Latin America closed the year with 686 million euros in sales.

The Fresenius Kabi group is divided into four segments, two of which contribute to the annual sales total in this report’s figure. Overall, the unit saw gains across every portion with positive organic sales growth. The group, which specializes in the therapy and care of chronically and critically ill people, contributed 6.54 billion euros to Fresenius’ annual figure, reflecting 7 percent organic sales growth. IV drugs, the largest unit in Kabi, grew 5 percent organically to finish at 2.74 billion euros for 2018. Clinical Nutrition followed with 1.80 billion euros, up 13 percent in organic sales growth from 2017’s 1.67 billion euros.

The remaining two groups join Medical Care’s Products portion to round out the total sales figure for this report. The first—Medical Devices/Transfusion Technology—witnessed 4 percent organic growth, although actual sales totals remained flat between 2018 and 2017. It finished the latest fiscal year at 1.08 billion euros. The last group in Kabi, Infusion Therapy, posted 929 million euros in sales, an organic increase of 7 percent.

Sales totals for Kabi in North America and Europe were almost even—2.36 billion euros and 2.25 billion euros respectively. Asia-Pacific contributed 1.3 billion euros to the unit’s sales, while Latin America/Africa brought in 637 million euros.

Serving as a leading private hospital operator in Europe, with 221 medical facilities in Germany and 404 healthcare centers in Spain, Fresenius Helios enjoyed a 4 percent overall rise in sales during fiscal 2018. The group finished the year at 8.99 billion euros. That total was split at an almost 2:1 ratio between the German and Spanish locations. Sales from the centers in Germany came in at 5.97 billion euros (a 2 percent loss over prior year), while Spain posted 3.02 billion euros (a 17 percent gain).

The last group of the four that comprise Fresenius as a single entity is Vamed. According to the firm’s annual report, Fresenius Vamed manages projects, provides services for hospitals and other healthcare facilities worldwide, and is a leading post-acute care provider in Central Europe. Total sales for the group was 1.69 billion euros—a 37 percent increase over the previous year. Europe accounts for the overwhelming majority of that revenue (78 percent), with other regions making up the balance (Africa, 6 percent; Asia-Pacific, 13 percent; and Latin America, 3 percent). Both units within Vamed saw strong growth, but the Service business sales jumped 57 percent to end at 976 million euros. Project business grew 17 percent to end the year at 712 million euros.

Looking to the future to ensure continued success, Fresenius made a number of investments during 2018 toward that effort. At the firm’s global headquarters, work was being conducted on a new research and development center. With the goal of bringing all R&D employees of the Medical Care segment together at one site, the new facility would connect to the company’s existing R&D center at the location.

The company also broke ground for a new technology center in Schweinfurt, Germany, which is also intended to be used by the Medical Care group. The 86,000-square-foot facility would be used across departments in an effort to better blend production and development.

$6.3 Billion ($40.7B total)
NO. OF EMPLOYEES: 273,249 (total)

Fresenius Group is perfectly named—as a group. The organization consists of a group of four, seemingly unrelated, healthcare businesses that serve different aspects of the care chain. Fresenius Medical Care is a worldwide provider of products and services for those suffering from chronic kidney failure. Fresenius Kabi is focused on IV administered drugs and pharmaceutical solutions for the treatment of oncological and other critical diseases. Meanwhile, Fresenius Helios is a private hospital operator with locations in Germany and Spain (formerly Quirónsalud). Finally, Fresenius Vamed manages projects and provides services for hospitals and other healthcare facilities worldwide. All are valued healthcare partners across the care chain, but it is challenging to identify the Group’s medical device contingents.

As such, for the purposes of the revenue number presented at the beginning of this report, the sales are pulled from a few specific locations. First, and representing the largest portion of the total, is the Medical Care Business’ health care products segment, which contributed 3.3 billion euros to the total. This was a 6 percent increase over prior the fiscal year in 2016 (the company’s fiscal year runs Jan. 1-Dec. 31). An interesting aspect of Fresenius Medical Care is that it represents a model some have predicted the industry could see other medical device firms take. That is, the company focuses on one therapeutic sector (in the case of Medical Care, that condition is chronic kidney failure) and provides the complete vertical care chain to support treatment, from products to healthcare services. In comparison, Medtronic has been developing a similar care model for the treatment of diabetes for several years.

Also of note, while the overwhelming majority of Medical Care’s 17.8 billion euros in sales are attributed to the health care services’ segment in North America (more than 12 billion euros), the health care products’ segment in the same region is only 843 million euros. This is noteworthy when compared to the international figures for the business, which shows the segments contribute almost equally in sales. Products (2.4 billion euros; a 7 percent increase over 2016) come in just under health care services (2.5 billion euros; a 9 percent increase over the prior year). While the company’s annual report doesn’t cite a specific reason for the difference in these figures, it does note that Fresenius Medical Care holds a leading position in worldwide dialysis care, serving about 10 percent of all dialysis patients, and enjoys a 35 percent market share in dialysis products.

The disparity in North America could remain unchanged in next year’s report, but if a key acquisition goes through, the firm may see the gap between services and products shrink. In August, Fresenius announced that it was moving to acquire NxStage Medical. The company develops, manufactures, and markets products for the treatment of end-stage renal disease (ESRD) and acute kidney failure. It has also established a small number of dialysis clinics designed to treat patients with ESRD. In its 2017 fiscal year, NxStage posted almost $400 million in revenue, the overwhelming portion attributed to its Products Business (almost $380 million). This would certainly bolster the Medical Care business’ health care products segment revenue contribution.

“The acquisition supports our 2020 strategic initiative of driving growth in the core business with innovation, better clinical outcomes through Care Coordination, and improving the patient experience,” said Rice Powell, Fresenius Medical Care chairman and CEO. “Combining our two companies would strengthen and diversify our business in the U.S. and help meet the evolving needs of our patients.”

“Home dialysis is a critical component of renal care, and this acquisition would help us accelerate growth and innovation in this important modality,” said Bill Valle, CEO of Fresenius Medical Care North America. “I look forward to teaming up with Jeff Burbank [founder and CEO of NxStage Medical] and his team to transform the delivery of home dialysis care in the U.S.”

While Stephan Sturm, chairman of the management board at Fresenius, told shareholders in the company’s 2017 annual report the transaction was expected to close in 2018, as of this writing, the deal is not yet complete. Dan Caplinger pointed to several concerns with regard to the deal’s closing in an article for The Motley Fool in November 2017. Specifically, he noted, “The merger still needs to meet several conditions, including regulatory antitrust approval, avoiding adverse investigations from other regulators, and various other customary closing provisions. With the stock now between 10 percent and 15 percent below the $30-per-share cash offer price, NxStage investors seem to be a bit nervous about whether the deal will actually go through in its current form.” With a deadline of Aug. 7, 2018, it’s understandable why NxStage shareholders could be concerned about the completion of the approximately $2 billion merger. Those same shareholders had previously and overwhelmingly approved the deal in October 2017, with 72 percent of the shares voting in favor of the transaction.

The remainder of the $6.3 billion posted at the start of Fresenius’ report (converted into U.S. dollars) is pulled from two segments of the Kabi business. Specifically, infusion therapy’s 903 million euros in sales was combined with its Medical devices/Transfusion technology’s portion, which represented 1.1 billion euros in sales. These two segments enjoyed gains of 6 percent and 5 percent, respectively, over the prior year.

Similar to Medical Care, the Kabi business faced challenges in terms of M&A that could ultimately fall through. In April, Fresenius Kabi announced it was making a play for Akorn, a U.S.-based manufacturer and marketer of prescription and over-the-counter pharmaceutical products, for approximately $4.3 billion. While it was expected the deal would close in early 2018, the transaction ran aground in light of some questions regarding Akorn’s product development process for new drugs. In the aforementioned letter to shareholders in the annual report, Sturm explained that the company had “received specific, anonymous information alleging deficiencies and misconduct” in Akorn’s methods. He added, “Before we can close this acquisition, we are obligated to investigate these allegations thoroughly.” Further complicating the matter, Akorn’s financial performance has slumped substantially, which has likely caused Fresenius Kabi to reevaluate its initial offer. Like the Medical Care transaction, the fate of this deal is still unknown at the time of this writing.

Perhaps realizing the attention needed to address these transactions, as well as the typical financial responsibilities a company like Fresenius generates, a new chief financial officer, Rachel Empey, was brought aboard on Aug. 1, 2017. The position had been handled by Sturm, the previous CFO, who had been in the role since 2005 and continued even after his appointment to CEO in 2016. Empey had come to Fresenius from Telefónica Deutschland Holding AG, where she was chief financial and strategy officer.

Perhaps relieved to finally hand over the economic reins so as to be able to focus solely on the CEO position, Sturm commented, “I am very much looking forward to working with Rachel Empey. She is going to be the perfect fit for our Management Board. Along with first-rate qualifications and skills, wide-ranging experience, and an engaging personality, she will bring new insights to Fresenius from another dynamic and innovative industry.”

$5.4 Billion ($30.6B total)
NUMBER OF EMPLOYEES: 232,873 (total)

A joint endeavor between the University of Turin’s Torino Stem Cell Project and Fresenius has produced some astonishing results in the field of stem cell research. The first result of this collaboration isolated and characterized a human stem cell population from a liver. The liver stem cells proved to be easy to isolate, capable of multiplication without limit, and transferrable into many other cell types, making them a promising potential option for regenerative medicine.

As time went on, the partnership bore multiple discoveries. The team isolated functional pancreatic islets, which mimic the function of pancreatic cells, for diabetes treatment. They also identified stem-cell derived extracellular vessels (particles that support communication between cells) to treat kidney and liver diseases, as well as cancer. On the basis of this successful research, Fresenius established Unicyte AG as a regenerative medicine subsidiary within its Fresenius Medical Care division in May 2016.

The newly established company will pursue development projects up until the clinical human study stage, exploring stem cell-based treatments for kidney and liver diseases, diabetes, and cancer. The alliance with a global medical technology company like Fresenius—which understands the technological limitations and how to navigate a regulatory climate well—should also help to add some structure to the much-heralded, somewhat disorganized regenerative medicine field.

“The expectations for stem cell research have grown in recent years, but a rigorous scientific process is essential to developing targeted therapies while maintaining ethical standards,” Prof. Giovanni Camussi, scientific director of the Torino Stem Cell Project, commented in a company press release detailing Unicyte AB’s establishment. “To develop sound clinical applications, our research must be reproducible and scientifically verifiable.”

“The establishment of Unicyte AG is the logical step to translate the existing research collaboration on stem cells and extracellular vesicles into clinical programs,” said Florian Jehle, CEO of Unicyte and vice president of technology and innovation management at Fresenius Medical Care. “In this way, Fresenius Medical Care is bundling its regenerative medicine research for selected indications.”

ANALYST INSIGHTS: Fresenius is mostly known for its Medical Group (a leading force for people who suffer from kidney failure). What is less known is that Fresenius is also one of the largest hospital operators in Europe and has a group dedicated to drugs and clinical solutions. The recent acquisitions of Quironsalud in Spain, Akorn, and one of Merck KGaA’s biosimilar businesses will continue to expand their worldwide reach. With chairman Stephan Sturm in place for a year now, one can look forward to seeing what is next for this giant in healthcare.

—Dave Sheppard, Co-Founder and Principal, MedWorld Advisors

Fresenius Medical Care, which celebrated its 20th anniversary in autumn 2016, is a global provider of dialysis products and services for chronic kidney failure patients. Medical Care generates the most revenue of Fresenius Group’s four divisions (which also include Fresenius Kabi, Fresenius Helios, and Fresenius Vamed). While this segment does offer dialysis products as part of Fresenius Group’s medical technology portfolio, most of its revenue is generated from the services of 3,624 dialysis clinics worldwide, which treated a record 308,471 patients in 2016. That said, dialysis products were Fresenius’ only group of medical device offerings (which also include medical devices and transfusion technology, as well as infusion therapy products) to achieve a profit in FY 2016 (ended Dec. 31)—though it only climbed about 1 percent from the previous year with revenues of $3.4 billion.

Medical Care’s slight growth was, in part, stimulated by a couple of noteworthy acquisitions. In September 2016, the division purchased 85 percent of equity interest in Sandor Nephro Services, India’s second-largest dialysis service provider. (Financial terms were not disclosed.) Sandor operates over 50 dialysis centers, and the acquisition strengthened the division’s core business in one of the world’s fastest-growing economies.

The division also expanded its reach into the areas of cardiac and lung therapies by obtaining German minimally invasive lung and heart assist therapy and technology company XENIOS AG in Q4 of 2016. By entering the market for cardiac and pulmonary disease treatment, Medical Care intended to bolster its position in extracorporeal (i.e., outside the body) organ support. In bringing XENIOS on board, the division gains the novalung iLA, i-cor, and medos devices for pulmonary and cardiac assist for an extensive range of support levels on the XENIOS platform. novalung iLA therapy is an alternative to immobilizing and potentially adverse mechanical ventilation, and i-cor therapy is a less invasive heart assist therapy that is synchronized with heartbeat. These therapies enable caregivers to keep lung failure patients awake, self-determined, and mobile while preventing ventilator-associated lung injury, pneumonia, and breathing muscle damage.

“Treating heart and lung diseases with extracorporeal therapy systems is closely tied to dialysis both in technological terms and in the clinical process,” said Dr. Olaf Schermeier, management board member who directs research and development at Fresenius Medical Care. “By combining XENIOS AG’s products and the experience of Fresenius Medical Care especially in the acute area, we can put these therapies into use on a broad-scale basis and achieve further progress that will benefit patients.”

Medical Care also introduced a new generation of dialysis machines at the European Dialysis and Transplantation Association/European Renal Association conference in May 2016, unveiling the 6008 CAREsystem hemodialysis therapy system. It both minimizes the amount of risk-related handling steps and reduces complexity in therapy delivery by including an all-in-one cartridge system with completely pre-connected bloodlines for all treatment modalities. Further, the system is made even more cost-efficient and environmentally friendly by reducing the volume and weight of generated waste.

In order to better serve the dialysis care market, in April 2016 Fresenius Medical Care North America (FMCNA) rechristened its dialysis service Fresenius Kidney Care. “We created this name to better communicate our approach to helping people with kidney disease thrive and continue doing the things that matter most to them,” William Valle, executive vice president of FMCNA and president of Fresenius Kidney Care, said in the company announcement.

Fresenius Kabi, which houses the Group’s medical devices/transfusion technology and infusion therapy portfolios in addition to IV drugs and clinical nutrition products, was essentially flat in 2016 with a slight revenue gain of 57 million euros. That slight bump was not a result of medical technology sales, however. The medical devices and transfusion sector posted 2016 sales of 1 billion euros, falling 8 million euros from the year prior. Meanwhile, infusion therapy revenues dropped 5.7 percent to 861 million euros from the previous year.

Kabi gained CE mark approval for the new AmiCORE apheresis device (which obtains blood components from a donor) in 2016, and also introduced the product in Malaysia, Thailand, and Vietnam. The division also brought its CATSmart device to the United States in 2016. CATSmart provides automated auto-transfusion, making it possible to quickly administer patients’ own erythrocytes (red blood cells) for operations or should heavy blood loss occur. The technology reduces the need for donor blood transfusion.

The division also acquired a production facility and portfolio of seven IV drugs in pre-filled syringes from Becton, Dickinson and Company in 2016.

Under New Management

On June 30, 2016, Ulf Mark Schneider left Fresenius after a 14-year tenure as CEO in order to “pursue another opportunity,” according to a company release detailing the management change. Stephan Sturm, who had served as Fresenius Group’s chief financial officer since 2005, took the helm on July 1, 2016.

“On behalf of the Supervisory Board I would like to thank Ulf Mark Schneider for his extraordinary leadership and tremendous accomplishments over the past 13 years,” Gerd Krick, chairman of Fresenius Management SE’s supervisory Board, said in the release. “He has led Fresenius through a period of exciting and sustainable growth and has truly transformed the company. While we regret his departure, we wish him the very best for his future endeavors.”

Since his induction in 2005, Sturm made significant contributions to develop Fresenius into the global healthcare force it is today. He played a key role in major acquisitions and his successful financing plans facilitated the company’s strong, sustainable growth.

“I am approaching my new role with both excitement and respect,” the newly-appointed Sturm said in the company release. “The future of Fresenius continues to look bright. I am fully committed to meeting our targets, executing on our growth strategy, and contributing to affordable high-quality healthcare around the globe.”

$5.5 Billion
NUMBER OF EMPLOYEES: 222,305 (Fresenius Group total)

The Gaza conflict has been raging on for over a decade now. In addition to many lives claimed, the conflict also wreaks havoc on the region’s economy—much of the local population is dependent on international aid to survive. The situation in Syria has had nearly identical effects, leaving millions of Syrians without the supplies they so drastically require.

Companioned with the economic situation is a sharp dropoff in the quality of medical care in both regions. Amidst this dire situation in April 2015, Fresenius Kabi donated lifesaving medicines to the aid organization action medeor e.V., which provides medication transfer to local relief organizations, supporting hospitals with infusion solutions in both Gaza and Syria. Both groups received 150,000 bottles, and Fresenius Kabi covered a portion of the transportation costs.

“We thank Fresenius Kabi for its generous support to the world’s most vulnerable people,” said Dirk Angemeer, action medeor’s head of export and purchasing department. “This donation really makes a difference. We are looking forward to continuing our successful cooperation.”

Fresenius Group is a parent company consisting of four business divisions, each responsible for their own worldwide operations: Fresenius Medical Care (dialysis products and services), Fresenius Kabi (therapy and care of the chronically ill, providing IV drugs, clinical nutrition, infusion therapy, medical devices/transfusion technology), Fresenius Helios (hospital operator), and Fresenius Vamed (manages projects and provides services for hospitals/healthcare facilities).

Most of Fresenius’ revenue isn’t derived from pure medical device offerings, but the gains achieved in fiscal year 2015 (ended Dec. 31) from the combination of the company’s dialysis products, medical devices/transfusion technology, and infusion therapy products were enough to keep Fresenius in the Top 30 with $5.5 billion in sales. Although Fresenius Group’s total sales of $27.6 billion marked an impressive 18.9 percent growth over the previous year, 2015 revenue from the aforementioned focus sectors actually fell 6.7 percent from 2014.

Fresenius Medical Care’s dialysis products experienced a 7 percent decline from 2014, with 3.35 billion Euros in sales. The North American market was not the cause for this—sales increased by 4 percent for that region. The main issue was the company’s international sales (which consists of Europe, Middle East, Africa, Asia-Pacific, and Latin America), which fell 9 percent from 2014. The company cited fluctuating currency translation as the main reason behind the decrease, but Fresenius didn’t seem to regard foreign monies as an issue, because executives claimed their focus was directed elsewhere—in further expanding its hospital network, and integrating acquisitions made in 2014.

Fresenius Kabi had quite a strong fiscal year 2015, growing sales 15.7 percent to 5.9 billion euros. However, the company’s IV drugs are mainly responsible for this growth. Infusion therapy sales in 2015 totaled 914 million euros, falling 6 percent from the prior year. Medical devices/transfusion technology’s sales of 1.05 billion euros was the only medical device segment that represented an increase, though its not-insignificant 7.7 percent growth was not enough to offset dialysis and infusion therapy losses. The company cited U.S. sales of the Agilia infusion pump as the chief driver for growth in this sector. Also responsible for this increase was introduction of the CATSmart, a continuous autotransfusion system. CE mark approval was also achieved for the Agilia products ProNeo, Homecare, and Connect during the year.

In May 2015, Fresenius Medical Care AG & Co. KGaA (the dialysis products and services provider) launched multiFiltratePRO, a continuous renal replacement therapy system that treats acute kidney failure in critically ill patients in the ICU. The new system’s features support physicians and caregivers with high workloads and working pressure with a large touch screen monitor providing comprehensive information. The fluid is heated to the correct temperature by way of fully integrated fluid heaters, and a “Care Mode” helps reduce alarm fatigue by preventing unnecessary alarms.

“Over the time we expect to expand this new therapy platform,” said Dr. Olaf Schermeier, Fresenius’ CEO for global research and development. “The reliable and simple user interface helps reduce the demand on personnel while providing the highest treatment quality. And spending less time with handling complex technology offers the opportunity to pay more attention to the patient itself.”

Fresenius Medical Care also announced a partnership with Debiotech SA, a Swiss medical device developer with expertise in miniaturized medical equipment and devices. The partnership intended to develop a portfolio of peritoneal dialysis (PD) technologies that are lightweight and compact enough to dialyze at home. Worldwide, over 2.6 million end stage renal disease patients regularly undergo dialysis treatment. “We are dedicated to continuing to produce home dialysis machines that are as easy and convenient as possible for our customers to operate, because this is what they demand and deserve,” said Mark Costanzo, president of Fresenius Medical Care’s Renal Therapies Group.

$5.9 Billion
NO. OF EMPLOYEES: 216, 275 (Fresenius Group total)

The Fresenius Group is a global healthcare conglomerate with products and services for dialysis (which is mainly what it’s known for—particularly in the United States), the hospital and the medical care of patients at home.

The parent company consists of four business segments that are responsible for their own operations worldwide: Fresenius Medical Care (dialysis products and services), Fresenius Kabi (products for the therapy and care of chronically and critically ill patients, providing intravenously administered generic drugs, infusion therapies, clinical nutrition, and medical devices for delivery of care), Fresenius Helios (operates clinics and hospitals—Germany’s largest) and Fresenius Vamed (provider of services for planning, constructing and managing healthcare facilities).

It’s true that most of the group’s sales aren’t derived from pure-play medical devices, but enough to account for roughly $5.95 billion of the group’s revenue for fiscal 2014 (ended Dec. 31). Medical technology-related sales included $3.58 billion in dialysis product sales from Fresenius Medical Care, in addition to medical devices/infusion technology and infusion therapies sales from Fresenius Kabi totaling roughly $2.37 billion.

For Fresenius Medical Care, net revenue for the full year 2014 increased by 8 percent to $15.83 billion. Net income for full year 2014 dropped by 6 percent to $1.05 billion compared to $1.11 billion for full year 2013. Sales of dialysis products grew by 3 percent to $3.58 billion Accounting for 66 percent of sales, North America remained Fresenius Medical Care’s largest business region. In 2014, sales in North America grew by 9 percent to $10.5 billion compared to $9.6 billion in 2013. Notably, the Asia-Pacific region grew 23 percent, with $1.36 billion in sales for fiscal 2014.

Sales for the entire Fresenius Group for full year 2014 increased to 23.2 billion euros ($28.2 billion) up 14.3 percent from fiscal 2013. EBITDA (earnings before interest, taxes, depreciation and amortization) was 4.10 billion euros ($4.98 billion), up 5.3 percent from fiscal 2013.

On the medical device side, Fresenius Medical Care launched a new cycler that delivers a peritoneal dialysis (PD) therapy tailored to individual patients’ needs. The device, called Sleep-Safe Harmony was released in Europe.

Dialysis patients have chronic kidney disease in common, but they still differ in many ways—by age, height, weight, stage of illness and residual renal function, etc. All of the differences have an impact on the required treatment. If the treatment is closely tailored to the needs of the individual patient, the patent’s overall feeling of health and wellbeing is increased. Compared with previous models, Sleep-Safe Harmony easier to operate, and makes it possible for more patients to tailor their own treatments, according to the company. PD is a therapy that can be conducted at home, if the patient meets certain medical conditions and is willing to learn how to perform the treatment.

Sleep-Safe Harmony has animations built into the machine’s screen that guide the patient through the procedure, so that the patient is assured that all the treatment steps are being performed as planned. This contributes to the improvement of patient compliance and saves training time. As a result, Fresenius officials claim, the new device strongly supports patients in performing their treatment on their own.

Specifically, adapted automated PD (APD) therapy with Sleep-Safe Harmony enables physicians and nurses to combine sequences of short dwells and small fill volumes with long dwells and large fill volumes and varying glucose concentrations.

Adapted APD is a new way of prescribing PD that optimizes ultrafiltration and clearance within one PD session. Sleep-Safe Harmony enables complete individualization for a fully personalized treatment, as well as guided prescription on the cycler or via online software.

In addition, the Sleep-Safe Harmony cycler offers features aimed at improving patient care. The device’s key features are: a large touch screen with animations guiding through each treatment step; guided prescriptions directly on the device; optimized fluid usage (no extra volume for priming needed); convenient handling through automatic connection and barcode recognition of fluid bags, integrated handles and stored patient information, with more than 12 months capacity of treatment data.

Fresenius Medical Care North America is based in Waltham, Mass. Fresenius Kabi USA is headquartered in Lake Zurich, Ill.

$5.41 Billion ($27.9 B total)
No. of Employees: 178,337 (total)

According to the U.S. National Kidney Foundation, approximately 430,000 Americans are on dialysis. In addition, the Journal of the American Medical Association claims that one out of nine American adults has kidney disease—and most don’t know it.
Worldwide, there are approximately 2.5 billion people on dialysis.

These are figures about which most people are unaware.

The management of the Germany-based Fresenius Group literally has made it their business to know these numbers—and then some—given the company’s global reach in the treatment of dialysis patients.

The Fresenius Group is a global healthcare conglomerate with products and services for dialysis (which is mainly what it’s known for—particularly in the United States), the hospital and the medical care of patients at home. The parent company consists of four business segments that are responsible for their own operations worldwide: Fresenius Medical Care (dialysis products and services), Fresenius Kabi (products for the therapy and care of chronically and critically ill patients, providing intravenously administered generic drugs, infusion therapies, clinical nutrition, and medical devices for delivery of care), Fresenius Helios (operates clinics and hospitals—Germany’s largest) and Fresenius Vamed (provider of services for planning, constructing and managing healthcare facilities).

What’s the company’s reach in the dialysis market? Fresenius Medical Care treats more than 270,000 patients at its network of more than 3,200 dialysis centers worldwide—an increase of 5 percent compared with 2012.

It’s true that most of the group’s sales aren’t pure-play medical devices, but enough to account for roughly $5.4 billion of the group’s revenue for fiscal 2013 (ended Dec. 31). Medical technology-related sales includes $3.5 billion in dialysis product sales from Fresenius Medical Care, in addition to medical devices/infusion technology and infusion therapies sales from Fresenius Kabi totaling $1.9 billion. (Editors’ note: Last year’s MPO Top Company Report ranking only took into account medical product sales from Fresenius Medical Care. This year’s numbers have been adjusted to include the device/technology-related sales from Kabi as well.)

For Fresenius Medical Care, net revenue for the full year 2013 increased by 6 percent to $14.6 billion—a record high for the company. Operating income (earnings before interest and taxes) for the full year 2013 increased by 2 percent to $2.25 billion compared to $2.22 billion for full year 2012. For FY13, net income was $1.11 billion, down by 6 percent from 2012. Earnings per share decreased by 6 percent to $3.65 compared to $3.89 for 2012. With 76 percent of sales, the dialysis services sector was, by far, the largest contributor to Fresenius Medical Care’s total sales. Sales of dialysis products grew by 5 percent to $3.5 billion Accounting for 66 percent of sales, North America remained Fresenius Medical Care’s largest business region. In 2013, sales in North America grew by 6 percent to $9.6 billion compared to $9 billion in 2012.

Fresenius Medical Care claims a 34 percent share of the dialysis products market in 2013, compared with 30 percent for Baxter International (including Baxter’s recent acquisition of Gambro). In the hemodialysis market, the company boasts 37 percent share, compared to Baxter’s 17 percent and 21 percent in peritoneal products market compared to Baxter’s 71 percent. (Editor’s note: See more on Baxter International’s fiscal 2013 performance on page 54).

For 2013, Fresenius Medical Care was ranked the 60th on Forbes magazine’s list of top 100 most innovative companies (it took the 59th spot in 2012).

For Fresenius Kabi, sales increased by 10 percent to $6.9 billion in 2013. Of this, 5 percent is attributable to organic sales growth and 10 percent to acquisitions. Currency translation had a negative effect of 4 percent. Net income increased 10 percent to $670 million. Sales of infusion therapy products were approximately $1.5 billion, and medical devices/transfusion technology accounted for $1.3 billion. IV drugs and clinical nutrition sales totaled $4.2 billion.

In Europe, the division’s largest market with $2.8 billion in sales, the company recorded organic sales growth of 2 percent (in euros). Sales were affected by restrictions in the use of blood volume substitutes by the European Medicines Agency. In North America, organic sales rose 5 percent. Total North American sales were $2.1 billion, up 23 percent (in euros) most due the addition of Fenwal operation, which Fresenius Kabi acquired in December 2012. In addition, continuing supply constraints at competitors contributed to North American growth, according to Fresenius. In the Asia-Pacific region, price reductions in China had an adverse effect on sales growth. Total Asia-Pacific sales grew 7 percent to $1.3 billion.

On the new product front, Kabi’s infusion therapy segment launched the new infusion solution bottle called KabiClear, which has a greater transparency than the company’s previous plastic bottles. The company also introduced in Europe the non-PVC Freeflex+ infusion bags with a needle-free injection port, which prevents injuries from needles when preparing treatments. In the medical devices segment, the U.S. Food and Drug Administration (FDA) approved the company’s Agilia infusion pump, which already had launched in Europe. In the transfusion technology segment, the company received CE mark for the Aurora plasmapheresis system.
Plasmapheresis is a process in which the liquid in the blood, or plasma, is separated from the cells. In sick people, plasma can contain antibodies that attack the immune system. A machine removes the affected plasma and replaces it with good plasma, or a plasma substitute. This is also known as plasma exchange. The process is similar to kidney dialysis. In Taiwan and Vietnam, Fresenius Kabi rolled out the Amicus cell separator, which is used for, among other things, the collection of platelets and therapeutic plasma exchange.

For the Fresenius Group as a whole, sales were $27.9 billion (up 5 in euros). Net income was just shy of $1.5 billion, an increase of 12 percent. Organic sales growth was 4 percent. Acquisitions contributed 5 percent. Divestitures reduced sales growth by 1 percent, and currency translation had a negative effect of 3 percent.

“2013 was a year of significant achievements,” said Ulf Mark Schneider, CEO of Fresenius. “We exceeded 20 billion euros in sales and 1 billion euros in earnings for the first time. The acquisition of 40 hospitals from Rhön-Klinikum AG is a key milestone for us. Looking ahead, we see significant growth opportunities in both industrial and in developing countries. We will pursue them with ambitious strategies, operational excellence and financial prudence.”

During the year, the company had a few minor warning letter issues to resolve with the FDA.

Fresenius Kabi received a warning letter, dated August 16, from the agency related to an April 2013 inspection of the company’s Fenwal blood bag manufacturing plant in Puerto Rico. The observations primarily were related to complaint-handling procedures, labeling issues, and filing of field alerts not in accordance with FDA regulations. The letter was not issued as a result of adverse events related to patient safety. Following the inspection, Fresenius Kabi submitted a detailed remediation action plan to the agency. The company reported remedying the issue.

In March 2013 Fresenius Medical Care North America (based in Waltham, Mass.) received a warning letter from the FDA, citing the company for failing to conduct adequate design verification studies of its electron beam-sterilized polysulfone dialyzers manufactured at its facility located in Ogden, Utah, and that the process for design validation of these dialyzers has been incomplete. Fresenius Medical Care North America received FDA clearance for the product in December 2000.

In addition to corporate headquarters in Waltham, Fresenius Medical Care North America has a clinical affairs office in Nashville, Tenn., and—in addition to the Ogden facility—a manufacturing site in Concord, Calif.

$3.31 Billion ($13.8B total)

NO. OF EMPLOYEES: 86,153 (total)

Con·ti·nu·i·ty  1 a: uninterrupted connection, succession or union  b: uninterrupted duration or continuation especially without essential change  2: something that has, exhibits, or provides continuity — Merriam-Webster dictionary

Rice Powell is not a linguist—by any stretch of the imagination—but he recently dared to question the world’s leading language/reference guide.

Powell’s cause célèbre with Merriam-Webster occurred over the winter as he compiled the 2012 annual report for Fresenius Medical Care AG & Co. KGaA. Though the newly minted chief executive had chosen a theme for the report (a menial yet essential task of the trade), Powell was having trouble relating the one-word theme to his company’s core mission and his own beliefs. The problem, he soon realized, was not with his interpretation of the word (it matched the company’s, naturally), but rather with the dictionary meaning.

Not surprisingly, Powell’s definition made the final cut.

“As I am a builder rather than a renovator, our annual report reflects the theme of ‘continuity,’ ” Powell said in his first official shareholder letter. The 57-year-old assumed leadership of the company on Jan. 1 from former CEO Ben J. Lipps, who had worked in the company’s dialysis division since 1985. “To me, continuity manifests itself through ongoing improvements…and steady development…Continuity does not mean being able or compelled to carry on as before. We see continuity as growth and development, steadily moving in one direction towards one goal: giving kidney patients a better quality of life.”

While unconventional, Powell’s take on continuity helped drive growth last year by considerable margins: Net revenue jumped 10 percent to $13.8 million, net income climbed 11 percent to $1.18 billion and gross profit swelled 10.8 percent to $4.6 billion. Dialysis product revenue rose 1 percent in the year ended Dec. 31 to $3.31 billion, due largely to solid demand for the company’s bloodlines, dialyzers, peritoneal dialysis devices and dialysis machines (the 500,000th of which rolled off the production line at Fresenius Medical Care’s factory in Schweinfurt, Germany).

Fresenius bigwigs linked the firm’s overall 2012 gains to the commanding performance of its North American segment, where a 13 percent surge in treatments (24.4 million), 16 percent increase in patients (164,554) and slight rise in treatment revenue ($348) resulted in a 14 percent boost in total revenue ($9 billion) and 12.5 percent hike in operating income ($1.61 billion). Most of the new patients came from Mercer Island, Wash.-based Liberty Dialysis Holdings Inc., the nation’s third-largest provider of outpatient dialysis services. Fresenius closed a $2.1 billion deal for the privately-held firm in late February 2012 after agreeing to a Federal Trade Commission (FTC) mandate to divest 60 outpatient clinics in 43 local markets to avoid monopolizing services. The FTC order required Fresenius to sell 54 clinics to Dialysis Newco Inc. of Nashville, Tenn.; five clinics to Dallas Renal Group of Dallas, Texas; and the remaining one to Alaska Investment Partners LLC of Anchorage, Alaska.

Fresenius executives readily agreed to the FTC directive, happy to relinquish 60 clinics to corral more than 200 others that would add approximately 19,000 patients to the company’s network and $700 million to its coffers.

“Fresenius has certainly shown that scale matters,” Lisa Clive, a London, United Kingdom-based analyst for Sanford C. Bernstein Ltd., told Bloomberg of the Liberty deal. “It makes strategic sense.”

So did the company’s other big purchase—the July deal for blood connection device and products manufacturer Fenwal Holdings Inc. of Lake Zurich, Ill. Valued at $1.1 billion (though neither side would confirm the price), the acquisition adds high-value blood processing services to the Kabi division’s portfolio and expands Fresenius’ footprint in the domestic transfusion technology market. Fenwal also gives Fresenius access to the Alzheimer’s sector, as Fenwal’s products and technology increasingly are being used by researchers, biotechnology firms and pharmaceutical companies to better understand and conquer the disease. Three years ago, Fenwal worked with Spanish holding company Grifols SA to produce a prototype plasmapheresis device for use in its Alzheimer’s research.

The Fenwal deal came as a bit of a surprise to industry analysts, considering Fresenius had bid $4.1 billion (3.1 billion euros) for German healthcare provider Rhoen-Klinikum AG in May and showed no signs of backing off its pursuit of the company. The move would have cemented Fresenius’s position as Germany’s largest private hospital operator and boosted its annual hospital sales to 6 billion euros, or 8 percent of the German market.

The company’s bid eventually failed, however, after unlisted competitor Asklepios purchased a 5 percent stake in Rhoen-Klinikum and blocked the shareholder majority needed for approval. Device/pharmaceutical manufacturer B. Braun Melsungen AG and German private hospital chain Sana Kliniken followed suit, turning Fresenius’s attempted takeover into an all-out bidding war.
As part of its failed coup, Fresenius received a 3.6 percent stake in Rhoen on the open market. With four rivals as shareholders, none of the companies stood a good chance of winning the prize, as each stakeholder potentially could veto each other’s moves. “It’s a stalemate situation,” a source disclosed to Reuters.

$3.3 Billion ($12.8B total)
NO. OF EMPLOYEES: 79,159 (total)

With chronic kidney failure a condition that affects more than 2 million people worldwide, Fresenius Medical Care AG & Co. is preparing itself for continued market growth. Through its network of 3,200 dialysis clinics worldwide, the company provides dialysis treatment to 253,000 patients around the globe—which comprises the bulk of the company’s revenue stream. To make it onto this list, however, Fresenius also is one of the world’s largest manufacturers of dialysis devices and products such as hemodialysis machines, dialyzers and related disposable products.

Overall, the company continues to post solid, steady results year after year.

For fiscal 2011 (ended Dec. 31) Fresenius Medical Care reported sales increase of 6 percent to $12.8 billion. According to the company, organic sales growth was 2 percent; acquisitions contributed 3 percent; and currency translation had an effect of 1 percent. Sales of dialysis services increased by 5 percent to $9.5 billion, up from approximately $9.1 billion. On the device side, dialysis product sales grew by 10 percent to $3.3 billion, up from nearly $3 billion last year.

In North America sales were $8.2 billion, nearly unchanged from $8.1 billion from fiscal 2010. Dialysis services sales were $7.3 billion, unchanged from 2010. Dialysis product sales decreased 2 percent to $813 million. International sales more than made up for stagnate U.S. sales, growing 18 percent to $4.6 billion, compared to $3.9 billion during the previous fiscal year. Sales in dialysis services increased 23 percent to $2.2 billion. Dialysis product sales increased 14 percent to $2.5 billion, mainly driven by higher sales of peritoneal dialysis products, dialyzers, dialysis machines and acute care products, company officials reported. Overall company earnings before interest and taxes (EBIT) increased 8 percent to $2.1 billion, up from $1.9 billion. Net income increased 9 percent to $1.1 billion, up from $979 million in 2010.

On the patient care side, Fresenius made a series of acquisitions and mergers in North America and Europe, including: American Access Care; International Dialysis Centers; the international dialysis service business of Euromedic; and Liberty Dialysis Holdings Inc., the holding company for Liberty Dialysis and Renal Advantage.

On the device front, Fresenius Medical Care AG & Co. purchased the assets of Hema Metrics LLC related to the company’s Crit-Line system, which enables non-invasive optical measurement of blood parameters such as percent blood volume change, absolute hematocrit level and continuous oxygen saturation. Crit-Line provides clinicians with a new tool to improve fluid management with less clinical complications, such as hypotension, according to Fresenius. Improved fluid management may lead to fewer hospitalizations for renal patients. Accurate hematocrit measurement, real time, provides the clinician immediate feedback, supporting anemia management. The Crit-Line system and its associated products have been 510(k) cleared by the U.S. Food and Drug Administration, and carry the CE Mark in Europe. Fresenius plans to establish this technology as the standard of care for fluid and anemia management in the North American market.

As part of an increasingly global strategy, Fresenius is expanding its production capacity in Southeast Asia. Fresenius’ Kabi division, a maker of infusion therapy and clinical nutrition, opened a new production facility in the coastal city Quy Nhon in central Vietnam. Nearly 380 employees will work at the production facility. With the new plant, Fresenius Kabi will almost double its manufacturing capacity for infusion solutions and liquid medications. Most of these products are intended for the Vietnamese market.

Ulf Mark Schneider, CEO of Fresenius, said: “Health care systems in Vietnam and other countries in Southeast Asia are developing at a rapid pace, so there is a constantly increasing demand for Fresenius Kabi products in these countries. Our new plant in Quy Nhon will help us meet this demand and allow us to make a significant contribution to high-quality, yet affordable health care in the region.”

The new plant replaces the existing Fresenius Kabi production facility in Quy Nhon. The new production facility covers 15,000 square meters. The manufacture of infusion solutions already is certified in line with GMP (good manufacturing practice) guidelines set by the World Health Organization. The plant is run by Fresenius Kabi Bidiphar JSC, a joint venture between Fresenius Kabi and Bidiphar, a state-owned health care company based in Quy Nhon. Fresenius Kabi Bidiphar was founded in 2008, and Fresenius Kabi holds the majority of its shares and provides the management team.

For 2012, Fresenius executives expect to grow sales to $14 billion. Net income is expected to grow to $1.3 billion.

27. Fresenius Medical Care

$3 Billion ($12.1B total)

KEY EXECUTIVES:

Ben J. Lipps, CEO Fresenius Medical Care

Rainer Baule, CEO Fresenius Kabi

Stephan Sturm, Chief Financial Officer

NO. OF EMPLOYEES: 73,452 (total)

GLOBAL HEADQUARTERS:Bad Homburg, Germany

With chronic kidney failure a condition that affects more than 2 million people worldwide, Fresenius Medical Care has positioned itself for expansion in a growth market. Through its network of nearly 2,800 international dialysis clinics, the company provides dialysis treatment to 216,942 patients around the globe—which comprises the bulk of the company’s revenue stream.

Fresenius is also, however, one of the world’s largest providers of dialysis products such as hemodialysis machines, dialyzers and related disposable products.

Revenue for fiscal 2010 (ended Dec. 31) was approximately $12.1 million, up 7 percent from the full year 2009. At constant currency, net revenue also rose 7 percent and organic growth was 6 percent, according to company filings. Operating income increased by 10 percent to nearly $1.9 billion compared to approximately $1.8 billion in 2009. Net income for the year was $979 million, up 10 percent from 2009. On the medical device side, the company reported $2.97 billion in sales of dialysis products, including $439 million in revenue from infusion therapy products and $843 million in transfusion technology.

To fuel profit margins, according to management, a primary focus of the company’s efforts in 2010—in addition, of course, to growing organically and through acquisition—was to reorganize the global procurement processes within the newly created department called Global Manufacturing Operations (GMO). The GMO division’s mission is to “coordinate the competencies in manufacturing methods and processes, quality management, strategic sourcing, and supply chain management closely within Fresenius Medical Care.” The goal, in part because the company has so many facilities spread across the globe serving multiple markets, is to make processes and procedures still more efficient, control risks and costs more effectively, and to increase the profitability of the manufacturing operations.

Management examined the extent to which production plants in the regions can supply each other with finished products and intermediate goods. This applies to products that can be adapted to local requirements but are based on standardized core materials and technologies, enabling manufacturing capacities to be employed more flexibly and thus more efficiently on a global basis, according to the company. The GMO division monitors developments on the global procurement markets and in key currencies. Executives explained that this will help manufacturing divisions to exploit international price advantages when sourcing raw materials and components for production while at the same time achieving a better spread of the related risks—for example, potential costs of currency movements or dependencies on individual suppliers. Part of this effort is to increasingly source from suppliers that operate internationally and have production capacities throughout the world.

For 2010, the company’s most notable product launch was the 2008T, a smart-platform dialysis system featuring the company’s Clinical Data Exchange software. Company officials claimed the technology is the first fully integrated dialysis therapy and management information system on the market and was developed to help physicians and clinic operators adjust to the new bundled payment environment in the United States. The 2008T was cleared for use by regulatory authorities in the United States and Canada.

The platform accommodates MIS software from third-party vendors as well as the company’s proprietary systems, providing immediate access to all dialysis treatment and clinical trending data traditionally held in multiple locations. The system was developed in conjunction with the Renal Research Institute (a research-focused joint venture between Fresenius Medical Care North America and Beth Israel Medical Center) in New York, N.Y.

In the spirit of “if you can’t beat ’em, buy ’em,” Fresenius made a purchase from one of its chief competitors in the dialysis market. In August last year, the company bought the peritoneal dialysis (PD) business from Stockholm, Sweden-based Gambro AB, which decided to solely focus on the hemodialysis market. Fresenius plans to tie the purchase into expanding its activities in the homecare market, especially in Europe and Asia-Pacific. PD is a treatment for patients with severe chronic kidney disease. The process uses the patient’s peritoneum in the abdomen as a membrane across which fluids and dissolved substances (electrolytes, urea, glucose, albumin and other small molecules) are removed from the blood. Fluid is introduced through a permanent tube in the abdomen and flushed out either every night while the patient sleeps or via regular exchanges throughout the day. PD is used as an alternative to hemodialysis though it is less commonly used in many countries, such as the United States.

Fresenius expects the buyout to result in $60 million in annual revenue. At the time of the purchase Gambro was the third-largest provider of PD products and services, serving more than 4,000 patients in more than 25 countries, with a specific focus on Asia-Pacific and Europe. Approximately 11 percent of the world’s dialysis patients are treated by means of PD today, according to company figures.

“Promoting our growth in home therapies, of which PD is a key element, has been a defined path in our overall growth strategy … The acquisition will also significantly strengthen our sales and distribution network and expand our global presence in the homecare market,” said Ben Lipps, CEO of Fresenius Medical Care.

$2.9 Billion ($11.3B total)
NO. OF EMPLOYEES: 68,000 (total)

Despite the economic conditions of 2009, Fresenius Medical Care continued to make gains. The company boasted a healthy 32 percent share of the worldwide market for dialysis products—the firm manufactures dialysis products and solutions in addition to owning dialysis care centers around the globe. The worldwide market for dialysis products and services is approximately $65 billion. At the end of fiscal 2009, Fresenius operated more than 2,500 centers worldwide, treating more than 195,000 patients.

The company reported 6 percent growth for fiscal 2009 to reach $11.3 billion in sales for the year, and an even more impressive 9 percent growth of net income to $891 million. Most of the growth—around 8 percent, in fact—was organic, Fresenius officials reported.

For dialysis products alone, overall growth was pretty flat—up approximately 1 percent to $2.89 billion (about 26 percent of overall revenue) from $2.87 billion in 2008. Product sales in North America were strong, up 8 percent to $818 million, while international sales fell 2 percent to $2.1 billion.Worldwide economic conditions and global reimbursement challenges contributed to the flat performance.The key dialysis products offered include dialyzers and hemodialysis machines. The three largest manufacturers of dialysis products—of which Fresenius claims to be the largest—accounted for 70 percent of the global market. Baxter and Gambro are the next closest in size. Fresenius manufactured about 85 million dialyzers in 2009. To help fuel much of its product growth, the company pumped $14 million more into research and development activities in 2009 compared to the previous year, for a total of $94 million.

On the management front, in March 2009, Lawrence Rosen resigned as chief financial officer (CFO) to pursue “other opportunities outside the company,” according to a release at the time. He was with the company for nearly six years. Michael Brosnan was promoted to CFO in January this year. For the past seven years, he was CFO and a member of the board of directors of Fresenius Medical Care North America. He joined the company in 1998 as vice president of Finance and Administration for Spectra Renal Management, which was purchased by Fresenius in 1997.

In another notable management change, Kent Wanzek was given responsibility for the company’s global products manufacturing operations. He has been the president for Operations of the Renal Therapies Group at Fresenius Medical Care North America since 2006. Prior to joining the company in 2003, Kent had several senior executive positions including Philips Medical Systems and Baxter Healthcare Corporation.

So far, for 2010, the company showed a heavy appetite for acquisition. The company agreed to purchase a chain of dialysis clinics in Russia. The move will add $25 million in annual revenue, official predicted. The company also acquired Asia Renal Care Ltd. The move should add $80 million to the company’s bottom line. Founded in 1997, Asia Renal Care has since become the second largest provider of dialysis and related services in the Asia-Pacific region (behind Fresenius Medical Care). Asia Renal Care operates more than 100 clinics throughout Asia treating about 6,200 patients. The number of dialysis patients in the region is forecast to grow to more than 1 million within the next five years.

$2.8 Billion ($10.6B total)
NO. OF EMPLOYEES: 64,666

The year 2008 was one for the history books at Fresenius Medical Care. The dialysis product and services firm not only increased its dividend for the 12th consecutive year, it also surpassed $10 billion in sales for the first time in its 12-year history. In addition, Fresenius reached a production milestone of 80 million for its dialyzers and fiber bundles.

“Our company continued to grow in a difficult business environment and we were able to reach our ambitious targets,” Fresenius Chairman and CEO Dr. Ben J. Lipps wrote in the firm’s 2008 annual report. “2008 proved to be an extremely challenging yet successful year for Fresenius Medical Care. Last year, we were able to demonstrate that our company’s business model is a robust, profitable and sustainable one that, even in turbulent times, is able to generate continuous growth…”

That growth amounted to 9 percent as demand surged for the company’s dialysis products (hemodialysis machines, dialyzers, blood lines and concentrates). Revenue from dialysis products jumped 15 percent to $2.8 billion (11 percent in constant currency). Fresenius executives attributed the growth to increased sales of products for peritoneal dialysis, as well as higher revenues from the phosphate binding drug PhosLo and monies from intravenous iron products. When sales to its own dialysis clinics were taken into account, net product sales rose by 14 percent to $3.73 billion.

The bulk of dialysis product sales were generated from international customers, according to the company’s 2008 report. International sales of dialysis products contributed $2.1 billion to Fresenius’ bottom line in 2008 (ended Dec. 31), while sales in North America came to $758 million, a 14.7 percent increase compared with the $661 million the continent generated in dialysis product sales in 2007.

The revenue distribution of dialysis products and services in North America differs from the international region due to the development and structure of local healthcare systems. For example, dialysis markets in Germany and Japan have more laws forbidding the operation of dialysis clinics by private companies.

Though the numbers indicate otherwise, rising prices for raw materials and energy, coupled with increasing overall inflation rates, negatively affected results last year, executives said. The depreciation of many currencies against the U.S. dollar also took its toll on the company’s finances.

Those setbacks were somewhat offset by the release of products such as the Liberty Cycler, a dialysis machine that allows patients to receive treatment at home while they sleep. The company’s product line played an important role in helping garner $10.6 billion in sales last year and $818 million in net income.

Sales will mostly likely be affected this year by an expansion project that increases the company’s ability to produce dialysis products at its plant in St. Wendel, Germany. The $150 million expansion project added two new spinning lines for hollow fibers, which is expected to boost production by about 30 percent. Fresenius also increased production capacity for the bags used in peritoneal dialysis.

Besides the earnings and production milestones, Fresenius achieved two other milestones last year: It was deemed one of the world’s most ethical companies by Ethisphere, a New York, N.Y.-based think tank, and a variety of its products were certified by Nordic Ecolabel, a standard promoted by the Nordic Council for environmentally sustainable products.

Ethisphere included Fresenius on its list of the world’s most ethical companies because of its “impressive and meaningful ethical business practices.”

In December, the company announced that a variety of its products were certified by Nordic Ecolabel. The license covers nearly all disposable products made by Fresenius of PVC-free material Biofine. Products include bags for peritoneal dialysis solutions as well as accessories for peritoneal dialysis machines.

$2.5 Billion ($9.7B total)

KEY EXECUTIVES:

Dr. Ben Lipps, Chairman and CEO
Dr. Emanuele Gatti, CEO, Europe, Latin America, Middle East
and Africa
Rice Powell, President and CEO, Renal Therapy Group, Fresenius
Medical Care, North America
Mats Wahlstrom, co-CEO, North America, President and CEO, Fresenius Medical Services

NO. OF EMPLOYEES:

61,406

GLOBAL HEADQUARTERS:

Bad Homburg, Germany

Dialysis product and services company Fresenius has continued to build on the impressive sales gains it made in the last few years.

By Fresenius’ estimates, its dialysis products accounted for a market share of around 30% in 2007, which would make the company the market leader, competing against firms such as Baxter. Management’s goal is to reach $11.5 billion in sales by 2010.

And it seems as if the company’s manufacturing facilities are geared up to meet the challenge.

Fresenius medical care’s plant in Ogden, UT, for example, produced more than 77 million miles of hollow polysulfone fiber last year (each fiber is about as thick as a human hair), enough to wrap 3,100 times around the world or more than 160 times back and forth between the earth and the moon. The fibers are used in the manufacture of dialyzers (artificial kidneys). A patient’s blood runs through the fibers, where toxins and waste elements are filtered out.

To keep up with demand, Fresenius increased its capacity for dialyzers at its St. Wendel plant in Germany by 40%. The company also began production at its first plant in China, where bloodline systems and other reusable dialysis products are manufactured in the Jiangsu province to serve the Chinese marketplace.

Looking at fiscal 2007’s results, Fresenius is well positioned to meet its 2010 target. For the year (ended Dec. 31), net revenue increased 14% to $9.7 billion overall, while net earnings climbed an impressive 34% to $717 million, or $2.43 per share, up from $1.82 in fiscal 2006. The company’s key markets are North America and Europe, generating approximately 69% and 22% of sales, respectively. Revenue in North America and international regions grew by double digits to 11% and 24% respectively. (The company’s North American headquarters is located in Waltham, MA.)

Dialysis care accounts for 74% of the total revenue (2006: 75%) and 26% came from dialysis products (2006: 25%). The company’s worldwide dialysis care business grew by 13% to $7.21 billion in 2007. The number of dialysis clinics the company owns (2,200) increased 6%, and the number of patients treated also climbed by 6% (174,000 as of the end of the year).

The revenue achieved with dialysis products rose by 18% (12% in constant currency), totaling $2.51 billion. The company cited higher sales of hemodialysis machines, dialyzers and concentrates as revenue drivers. In North America, revenue with dialysis products grew by 18% to $661 million.

Management said the company experienced strong organic growth with existing business in all regions but that it also remained focused on strategic acquisitions.

One such purchase was Renal Solutions Inc. (RSI), which Fresenius bought in November. The acquisition agreement provided for total consideration of up to $190 million, consisting of $100 million at closing, $60 million after the first year and up to $30 million in milestone payments during the next three years. RSI manufactures dialysis technology that purifies tap water to dialysate (a key fluid used in the dialysis process) quality and allows dialysate to be regenerated. This reduces the water volume requirement for a typical hemodialysis treatment from 37 gallons of reverse osmosis water to just 1.5 gallons of drinking water per treatment.

The combination of the companies’ technology will provide a platform for superior home products and therapies, according to Fresenius. Furthermore, the significant reduction of dialysate helps with miniaturization, a prerequisite for the “wearable kidney” concept that could benefit some patients and complement clinical-based therapy, the company said. Fresenius sees the current market size of the home therapy market (peritoneal dialysis and home hemodialysis) at about $2 billion, representing approximately 11% of the overall worldwide dialysis market. The company estimates the market has the potential to grow to $4 billion within the next 10 years.

“The acquisition of RSI is an important step to advance the technology required for strong future growth in this field. The combination offers us the long-term opportunity to extend our leadership to home and acute dialysis products,” said Ben Lipps, CEO. “With this acquisition, Fresenius Medical Care expects to increase its annual R&D spending by approximately $10 million starting in 2008. Our mid-term financial targets for the years 2007 through 2010 remain unchanged.”

For 2008, Fresenius’ management has set some lofty goals, with a plan to boost revenue by more than 7% to more than $10.4 billion and a 12%-15% increase in net income to between $805 million and $825 million.

For the first quarter of 2008 (ended March 31), overall net revenue increased 8% to $2.5 billion. Organic revenue growth worldwide was 5%. Dialysis services revenue grew by 5% to $1.8 billion, while dialysis product revenue increased by 19% to $667 million. Net income for the first quarter 2008 was $186 million, an increase of 16%.”

$2.8 Billion ($8.5B Total)
No. of Employees: 56,803

For fiscal year 2006, Fresenius Medical Care set an ambitious goal of reaching the $8 billion mark in revenues. With $6.8 billion in revenue for 2005, there was still quite a bit of work to be done for the provider of dialysis products and services.

But by the end of the fiscal year, the company had reached its goal and then some. For FY 2006, Fresenius reported $8.5 billion, a significant 26% increase. Net income also increased by double digits—18%—to $537 million. In addition, the company reached another milestone in 2006: its 10th anniversary.

Revenue from dialysis products, which account for 25% of the company’s overall revenue, reached $2.8 billion in fiscal 2006, including revenue from its own dialysis clinics.

The global dialysis market grew by approximately 5% to $55 billion in 2006, and the dialysis product market reached a value of $9 billion, according to Fresenius. The company reported that the three largest suppliers of dialysis products hold a worldwide market share of nearly 70%. Fresenius claims a 30% market share, followed by Baxter with 22% and Gambro with 15%.

For Fresenius, both its North America (which accounts for 71% of the company’s revenue) and international markets contributed to strong performance. Growth in North American revenue was “above average,” according to the company—mostly due to the acquisition of the Renal Care Group in Nashville, TN in March for $3.5 billion. With the additional dialysis centers under its belt, the company saw revenue form North America jump 32% to $6 billion. International revenue grew 13% to $2.7 billion. Worldwide, Fresenius had 2,108 clinics in 2006 (1,680 in 2005), serving approximately 163,517 patients (131,450 in 2005).

On the product side, much of the growth is attributed to demand for the Optiflux series and 2008K dialysis machines. Both machines, the company said, were designed specifically to meet the needs of its largest single market—the United States. In July 2006, Fresenius’ North American division dodged a legal bullet for the 2008 series of devices when a jury in Oakland, CA ruled that the company did not infringe on four patents from Baxter International. Baxter was seeking $87 million in damages from Fresenius for patent infringement associated with the 2008K hemodialysis machine and an injunction barring Fresenius from continued selling of the machine.

Going forward, the company said it plans to “significantly expand” its dialyzer production facilities in the United States within the next two years, adding production lines to its facility in Ogden, UT. Fresenius already has set into motion plans to increase from 27 million to 34 million dialyzers annually at its Ogden facility.

Due to some of its recent success and readjusted market projections, Fresenius has bumped up its goal for the end of the decade. The company now expects to generate revenue of $11.5 billion by 2010, up from the $10 billion it previously had predicted. In the near term, Fresenius is hoping for revenue of $9.4 billion this year, which would be an increase of 11% compared to 2006. Net income is expected to be between $675 million and $695 million, an increase of 26% to 29%.

So far for 2007, the company seems to be on target. Net revenue for the first quarter, compared to the first quarter a year ago, increased by 33% to $2.3 billion, and dialysis product revenue increased by 18% to $560 million. North America revenue showed significant growth for the quarter, up 37% to $1.6 billion. Much of the growth remains fueled by continued strong sales of the 2008K hemodialysis machines, the company said.

“The advantages of being the world’s only vertically integrated dialysis provider are increasingly evident as we compete in the global marketplace,” said Ben Lipps, CEO, describing the company’s recent financial performance.

$2.5 Billion ($41.3B Total)
No. of Employees: 47,521

Dialysis product giant Fresenius Medical Care continues to break its own records, having experienced $6.8 billion in sales in 2005, a 9% increase over 2004; net income also broke records with a 17% increase to $472 million. Further on the rise, dialysis product revenue, including sales to the company’s own clinics, rose 10% to $2.5 billion, compared to $2.2 billion in 2004. It appears that the company’s goal of reaching $8 billion by the end of 2006 is attainable.

Fresenius underwent an influential change to its structure in 2005 as it voluntarily converted Fresenius Medical Care preference shares into ordinary shares, and additionally changed the legal form of the company from AG to KGaA. (A Kommanditgesellschaft auf Aktien is a partnership limited by shares, an entity with its own legal identity with two groups of shareholders.) The moves are expected to improve the liquidity and financial flexibility to take advantage of future growth opportunities.

In line with its aforementioned 2005 success, Fresenius has had a good start in 2006. Net revenues for for the first quarter increased 9%, to $1.7 million, and net income grew 8% to $116 million. Dialysis Services and Product revenue grew by 9% and 6%, respectively.

Thus far this year, however, the company’s biggest news was that it had completed its largest acquisition to date when it purchased the Renal Care Group (Nashville, TN) for $3.5 billion. As a stipulation of the deal, 105 dialysis centers were divested to DSI Holding Company, which garnered Fresenius $511 million in cash.

“We are very pleased to complete the acquisition of Renal Care Group, and this is a milestone for our company,” said Ben Lipps, Fresenius CEO. “As we combine the best of both companies, we do so for the benefit of all—patients, employees, physicians, customers and shareholders.”

With this transaction, Fresenius now owns and operates approximately 1,500 dialysis clinics in North America, serving approximately 115,000 patients. Gary Brukardt, Renal Care Group’s president and CEO, joined Fresenius and was appointed as a member of the management board of Fresenius Medical Care AG.

Nearly a year before the Renal Care Group acquisition, in April 2005 Fresenius purchased Haemotec, Inc., a Quebec, Canada-based manufacturer of hemodialysis concentrates. The company is a market leader in Canada, having captured more than 40% market share in the hemodialysis segment.

Much of the company’s success achieved in 2005 was attributed to the introduction of the 5008-series dialyzer machines in Europe, Asia and the Middle East in the second half of the year. Designed as a replacement to the 4008 series, the 5008 will build on the previous model’s market base and good reputation. With the 5008 series, the company expects to grow faster in the machine business than the dialysis market, which expands at an average of 7%. In January 2006, the 5008 beat 220 other company submissions to win the 26th German Business Innovation Award.

In its quest for continued growth, in March 2006 Fresenius Medical Care announced the expansion of its Ogden, Utah production facility to increase production capacity from 27 million to more than 33 million dialyzers annually.

Fresenius is looking to reach $10 billion in revenue by 2010, which corresponds with an annual growth rate of 8%. The company is looking to achieve growth organically (in dialysis care) and through acquisitions, horizontal expansion (dialysis medication) and home therapies.