Lisa Clive

Lisa Clive asked about DaVita's experience with new dialysis technologies focused on removing larger molecules, such as HDF and Theranova, and their plans for data collection. She also followed up on phosphate binders, asking if the issue with dispensing volumes was related to adherence or cost.

Answer

CEO Javier J. Rodriguez confirmed DaVita's experience with both HDF in Europe and advanced dialyzers, stating they are closely monitoring clinical studies like the MOTHER study to guide their strategy based on science and physician preference. CFO Joel Ackerman addressed binders, suggesting the issue is more about patient adherence than cost, and reiterated confidence in the full-year $50 million operating income contribution from the drug class.

Lisa Clive inquired about the outlook for volume growth for the remainder of the year and into 2025, and requested a breakdown of the IKC segment's reimbursement mix between capitated and shared savings models.

Answer

CFO Joel Ackerman reaffirmed the company's full-year 2024 volume growth guidance of 0.5% to 1.0%. Regarding the Integrated Kidney Care (IKC) reimbursement mix, Ackerman stated that the company would have to follow up with that information at a later time.

Lisa Clive inquired about the drivers of profitability in China's Diagnosis & Treatment business, questioning if it was due to a favorable business mix. She also asked if recent disruptions at the FDA have affected interactions regarding the Respironics consent decree.

Answer

CFO Charlotte Hanneman confirmed China is a highly profitable market due to a favorable product mix and a willingness from customers to pay for innovation in both D&T and Personal Health. CEO Roy Jakobs stated that FDA disruptions have not impacted engagement on the Respironics consent decree, where progress is in line with plans. He noted the greater concern is potential delays in new product approval cycles.

Lisa Clive asked for an update on trends in the patient monitoring business and the competitive dynamics and market share evolution for the Respironics business in markets outside the U.S.

Answer

CEO Roy Jakobs reported that the patient monitoring business has positive order intake growth and is gaining share, though order flow is becoming lumpier due to larger, long-term technology deals. For Respironics outside the U.S., he noted that momentum is returning as the company can now sell in all ex-U.S. markets, is competitive with new mask launches, and the S&RC business returned to good profitability in 2024.

Lisa Clive from Bernstein asked about the potential impact of expiring ACA insurance subsidies on the company's payer mix and EBIT, and how the shift of phosphate binders into the clinic reimbursement bundle would affect FreseniusRx.

Answer

CEO Helen Giza estimated that if the ACA subsidies expire, the potential negative impact would be below 2% of EBIT for the U.S. Care Delivery business. Regarding phosphate binders, she explained the situation is complex due to the company's three related assets (clinic, pharmacy, pharma). The net benefit across all three businesses is estimated to be around EUR 100 million in 2025, with the FKC clinic business accounting for about half of that amount.

Asked about the company's Wound care exposure in China regarding potential VBP, the current structure of the U.S. sales force, and how reps are servicing the growing ASC channel.

Answer

The company's Wound care business in China is relatively small, so a potential VBP would not be material to the group. The U.S. sales force is largely distinct for Sports, Trauma, and Recon, with Sports being primarily direct employees while Orthopedics is a mix of direct and distributors. The company leverages its extensive experience in ASCs from its Sports business and notes that CORI has a strong value proposition in this channel, leading to higher relative performance in ASCs versus hospitals.