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DaVita is down 16% in pre-open trading, Fresenius Medical Care is down 17%, and Baxter is down 9%.
Citi analysts view the news as a negative for Fresenius Medical Care. “… we see kidney disease as one of the areas where GLP1s could potentially negatively impact the size of the relevant patient population over time.” The early stoppage of the trial is a reason for concern, they added. In addition, it “points to a somewhat faster effect than we had previously contemplated.” The analysts note that shares of Fresenius Medical Care were already down 16% since Novo reported the SELECT headlines in August. They expect them to drop further on today’s news.
Meanwhile, UBS analysts said investors need to take a step back and put the news into perspective. They see a big overreaction in DaVita’s stock, which was already down a lot since the trial results were announced in August.
“While this development suggests GLP-1s may slow the progression of CKD, it’s worth reviewing the sample of the study to put the news into perspective,” the analysts commented. “All said, we think the initial stock move is a big overreaction, particularly when you consider that GLP-1s have already been the primary driver of weakness on DVA’s stock, which is down 19% since August 8 when the SELECT trial results were first announced.”
