Genzyme Optimistic About Renagel’s Future Despite Fresenius’ Deal For PhosLo

Genzyme CEO does not think Fresenius will inappropriately push physicians to prescribe PhosLo.

Genzyme remains optimistic about future sales of phosphate binder Renagel (sevelamer) despite Fresenius Medical Care's Oct. 12 announcement that it will acquire competitor PhosLo (calcium acetate) from Nabi Biopharmaceuticals, Genzyme CEO Henri Termeer said.

Fresenius operates a "network of approximately 2,078 dialysis clinics" worldwide, according to the German company's website. With its acquisition of PhosLo, used to treat end-stage renal disease patients, Genzyme's concern could be that Fresenius would encourage physicians to prescribe its product rather than Renagel.

In a same-day statement, Fresenius CEO Ben Lipps said PhosLo will allow Fresenius to expand its clinical therapy offerings. The company plans "to use PhosLo as part of our overall integrated 'pharma-tech' therapy to better manage bone mineralization during dialysis treatment," Lipps added.

Genzyme's Renagel is used to control serum phosphorus in patients with chronic kidney disease on hemodialysis.

"Fresenius is an ethical company and they for sure will not get themselves into any kind of complex position by inappropriately influencing how physicians prescribe," Termeer said during a third quarter earnings call Oct. 12. "Fresenius is a very good customer of ours, as are most other major dialysis chains in the country."

President of Genzyme Renal John Butler added that Fresenius does not "buy Renagel directly."

Instead, Termeer said, "These products are being sold in a very straightforward [way] to physicians and there's nothing special that is done by people that actually own these chains to influence specific drugs. It would be very, very inappropriate if such influences were being exercised, and it doesn't happen."

"So we don't think this has any particular influence on prescriptions for Renagel in the future."

Fresenius will pay $65 mil. cash at closing, royalties on a possible new product formulation and milestone payments.

"I was quite interested in the price that was part of the transaction," Termeer said. "It seems like this particular asset has not gained much value over the many years that they've run."

Genzyme is in the middle of a bidding war with Millennium Phamaceuticals for the rights to acquire AnorMED (¹ (Also see "Genzyme Raises Bid For AnorMED, Emphasizing Market Advantage For Mozobil" - Pink Sheet, 10 Oct, 2006.)).

- Daniel Fowler ([email protected])