Shares of dialysis providers drop after Ozempic’s early kidney trial success

Shares of dialysis services providers such as DaVita and German rival Fresenius Medical Care declined on Wednesday, after Novo Nordisk’s Ozempic showed early success in a trial to treat kidney failure in diabetes patients.

The Danish drugmaker said late on Tuesday it will stop its kidney outcomes trial almost a year ahead of schedule, based on a recommendation from the independent data monitoring board overseeing the study.

Frankfurt-listed shares of Fresenius fell 12.03% to 24.35 euros ($25.83) in normal trading hours and Davita fell 17.3% to $75.51 in premarket hours.

The early stop of the study could be negative for Fresenius as GLP-1 drugs like Ozempic could “potentially negatively impact” the size of the relevant patient population over time, Citi analyst Veronika Dubajova said in a note.

The early halt points to a “somewhat faster effect than we had previously contemplated,” Dubajova added.

GLP-1 drugs were developed to help control blood sugar in patients with Type 2 diabetes and are also used as weight-loss treatments.

Davita’s price-to-earnings ratio for the next 12 months, a common benchmark for valuing stocks, stood at 11.91 compared with Fresenius Medical’s 14.30.

Shares of U.S.-based Baxter International, which makes products used by dialysis therapy providers, also fell about 9% to $33.99 premarket.

As of Tuesday’s close, Davita shares were up 22.2% while Baxter shares were down about 27% so far this year.

($1 = 0.9428 euros)

(Reporting by Mariam Sunny in Bengaluru; Editing by Janane Venkatraman)

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