UPDATE: Fresenius Shares Down After Heparin Rival Gets FDA Ok

Shares of German health care company Fresenius SE (FRE.XE) fell Tuesday after rival Hospira Inc. (HSP) received U.S. approval for six new dosages of blood-thinner heparin, chipping away at Fresenius' monopoly.

The U.S. Food and Drug Administration late Monday approved Hospira's application to sell therapeutic heparin in new quantities, in single and multiple dose vials. Hospira said in a statement that the company now can offer various sizes and strengths of the product in syringes, vials and flexible containers.

Commerzbank analyst Volker Braun wrote in a note that the "monopoly is likely to end" for Fresenius SE and forecast the company's heparin sales falling to $162 million in 2010 from $240 million in 2009.

Braun said the competition comes nine months earlier than he expected, and said market disappointment should be high Tuesday.

At 1041GMT, Fresenius shares were down EUR1.97, or 5%, at EUR37.37.

Hospira competes directly with APP Pharmaceuticals, a U.S.-based heparin manufacturer, which Fresenius agreed to buy in July 2008 for $3.7 billion plus the assumption of $940 million in debt. APP is now a subsidiary of Fresenius' infusion therapy division Kabi.

A Fresenius SE spokesman said the company didn't expect its monopoly to be sustainable and knew there would be competition at some point. However, he said the company is relatively cool to Hospira's new approvals and is taking a wait-and-see approach as to how much market share the new products would garner.

Without knowing how much volume Hospira plans to add to the market and at what price, it's difficult to estimate the impact on Fresenius, LBBW analyst Karl-Heinz Scheunemann said. Hospira could charge less than Fresenius or the same price, he says.

Scheunemann said price competition would benefit Fresenius Medical Care (FMS), a division of Fresenius which must buy heparin for use with its dialysis services. However, he said any cost savings would likely not be enough to offset the negative impact on APP's business.

Company Web site: www.fresenius.com

-By Allison Connolly, Frankfurt Bureau; [phone], [e-mail]

(Heide Oberhauser-Aslan contributed to this report.)