May 3, 2017 / 6:17 AM / 3 months ago

Fresenius ups guidance on growth at generic drugs unit

2 Min Read

An office building at the Fresenius SE headquarters is pictured in Bad Homburg near Frankfurt, Germany February 22, 2017.Ralph Orlowski

FRANKFURT (Reuters) - German healthcare group Fresenius (FREG.DE) on Wednesday toned up its earnings guidance for the year as demand for recently launched generic infusion drugs continued to grow at higher-than-expected rates.

For 2017, it now expects adjusted net income to grow by 19 to 21 percent, excluding the effect of currency swings, compared with a previous target for a 17 to 20 percent gain, to be shored up later this year by market launches of more than 10 products that have lost patent protection.

That excludes one-off charges of about 50 million euros expected from the last week's deals to acquire U.S. generic drugmaker Akorn Inc (AKRX.O) for $4.75 billion and the biosimilars arm of Germany's Merck KGaA (MRCG.DE) and another 50 million euros in planned expenditures to build the Merck business later this year.

First-quarter adjusted net income jumped 28 percent to 457 million euros ($500 million), bolstered by recently launched drugs and the acquisition of Spanish hospital chain Quironsalud, coming in above the average estimate of 422 million euros in a Reuters poll of analysts.

The shares were seen 1.5 percent higher in pre-market trades ahead of the 0700 GMT market open, amid an overall German stock market that was indicated slightly lower.

Separately listed subsidiary Fresenius Medical Care (FMEG.DE), which derives about three quarters of sales from North America, posted a 17 percent gain in quarterly adjusted net income, benefiting from higher reimbursement rates and lower costs of medicines for dialysis patients.

First-quarter adjusted net income of 249 million euros excluded a one-off gain of 59 million euros from settling a dispute with the U.S. Departments of Veterans Affairs and Justice over outstanding payments.

Reporting by Ludwig Burger; Editing by Maria Sheahan

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