Fresenius Endorses Flu Vaccination

Dialysis company Fresenius Medical Care AG & Co. KGAA (FMS), through its Fresenius Medical Care North America unit, is recommending dialysis patients residing in the U.S. to receive flu shots as a preventive measure.

This positive piece of news highlights the company’s ability to deliver high-quality care through innovative programs and technology, and should thus boost investor confidence in the stock. However, the company’s stock returned a negative 6.2% to its investors on a year-to-date basis.

As part of its UltraCare mission, FMS will distribute free vaccinations to all its dialysis patients and staff to protect them against both seasonal flu and H1N1 swine flu. Dialysis patients are more prone to acquiring flu owing to their weak immunity system resulting from kidney failure. Thus, the company deems it necessary to encourage such patients to take the flu shot. Flu can lead to major complications, such as pneumonia, in the case of kidney failure patients, and can even lead to fatal consequences.

Early cases of influenza have already started showing signs in the U.S. About 60 million Americans acquire flu every year, with infections peaking during the winter months. The Centers for Disease Control and Prevention (CDC) advises yearly flu shots for everyone above the age of 6. Moreover, they highly recommend it for patients on dialysis.

The company’s principal competitor in the U.S. is DaVita HealthCare Partners Inc. (DVA), which provides dialysis services for patients suffering from chronic kidney failure or End Stage Renal Disease (ESRD). Fresenius Medical Care also competes with Baxter International Inc. (BAX) in certain niches such as peritoneal dialysis products.

Recently, FMS acquired 43 hospitals from Rhoen-Klinikum AG. Fresenius’ acquisition of hospitals from this private health-care provider by its Helios unit is expected to make the company the largest private hospital operator in Europe. Post-acquisition, Fresenius SA will operate 117 hospitals across the continent.

However, Moody’s Investors Service, the credit rating arm of Moody's Corp. (MCO), has changed its outlook on FMS from positive to negative due to the increase in leverage following the acquisition. The outlook has been downgraded despite the fact that the acquisition will lead to improved coverage of Fresenius SE hospitals across Europe.

Currently, Fresenius carries a Zacks Rank #3 (Hold).