FRANKFURT – Shares in German kidney dialysis company Fresenius Medical Care (FMC) rose on Friday after Societe Generale said that disruption of the dialysis market by the obesity and diabetes drugs class known as GLP-1 is unlikely.
SocGen upgraded its rating on the stock to “buy” from “hold” and hiked its price target by 39% to 71 euros, writing: “Exploit the mispricing.”
The brokerage said it believes investors are “extrapolating from obesity,” which it dismisses as “unreasonable” as obesity is very different from kidney disease.
FMC shares opened 5% higher, but then pared gains and were up 3% by 1250 GMT.
FMC shares fell to nine-month lows on Oct. 11, after Novo Nordisk’s Ozempic kidney disease trial showed early success, but have since recovered losses.
FMC said the GLP-1 drugs’ effect on its patient numbers is neutral and added that improved longevity could be a factor bolstering dialysis patient numbers.
SocGen analysts pointed out that another class of weight-loss drugs, SGLT2 inhibitors, approved for kidney disease treatment in the U.S. two years ago and according to them cheaper and more convenient than GLP-1s, have not impaired FMC’s prospects.
(Reporting by Andrey Sychev, Marleen Kaesebier and Ludwig Burger; Editing by Miranda Murray)
