Dialysis care group Fresenius Medical Care has entered into a five-year sourcing and supply agreement with Amgen Inc. that one analyst says could shore up sales of the Thousand Oaks-based biotech giant's aging anemia drug Epogen and second-generation Aranesp.
Amgen will be the sole supplier of red-blood cell boosting drugs for the U.S. operations of Fresenius Medical Care, considered the world's largest integrated provider of products and services for individuals undergoing dialysis because of chronic kidney failure. It's a division of Frankfurt, Germany-based Fresenius AG.
"The deal is clearly pre-emptive to protect (Amgen's) share in case Roche's competing Cera reaches the U.S. market in early 2007," said Merrill Lynch analyst Eric Ende in a note to investors. "While terms of the contract were not disclosed, we expect discounts and rebates were the incentive for Fresenius to approach Amgen about doing this deal."
Ende speculated that Amgen would like to strike a similar agreement with El Segundo-based dialysis center operator DaVita Inc., which represents 30 percent of the US dialysis market, although anti-trust issues could come into play.
Sales of Epogen, Amgen's first product, have slowed since the 2001 introduction of Aranesp, an extended-use version. that can be more convenient for some patients because it requires fewer trips to a clinic or doctor's office for injections.
Worldwide sales of Aranesp increased 26 percent to $1,055 million in the second quarter from a year ago, whereas Epogen sales declined 5 percent to $613 million. Aranesp was Amgen's best-selling product in 2005 at $3.3 billion, with Epogen at $2.3 billion.
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