FTC grants final approval for Fresenius’s $2B buyout of NxStage

Fresenius Medical Care acquires NxStage Medical

The U.S. Federal Trade Commission said yesterday that it granted a final order of approval to Fresenius Medical Care (NYSE:FMS; ETR:FRE) for its $2 billion acquisition of NxStage Medical.

The approval came with a caveat that the companies divest their assets and rights to research, develop, manufacture, market and sell NxStage’s bloodline tubing sets intended for use during hemodialysis treatment.

To mollify the anti-trust regulators, NxStage last July agreed to deal its Medisystems bloodlines business to B. Braun.

The final order was approved in a three-to-two vote, according to an FTC posting.

The $30-per-share deal for the Lawrence, Mass.-based home hemodialysis pioneer, first announced in August 2017, was initially slated to close by the end of that year. But it was delayed several times by the government shutdown this year and by the FTC.

SEC details Fresenius’ $231m FCPA settlement

Fresenius Kabi updated logo

The U.S. Securities and Exchange Commission today detailed the more than $231 million that Fresenius Medical Care (NYSE:FMS; ETR:FRE) agreed to pay to resolve self-reported violations of the Foreign Corrupt Practices Act.

In its release, the SEC said that it found that Germany-based Fresenius engaged in misconduct in Saudi Arabia, Morocco, Angola, Turkey, Spain, China, Serbia, Bosnia, Mexico, and eight countries in the West African region. The agency added that the misconduct occurred “against a backdrop where the company failed to have sufficient internal accounting controls.”

The company made improper payments through a number of different schemes, according to the SEC, including sham consulting contracts, falsifying documents and funneling bribes through a system of third party intermediaries.

The SEC said that despite having seen “red flags of corruption” since the early 2000s, the company did not devote sufficient resources towards compliance. The agency went on to claim that Fresenius failed to take even basic steps, such as providing anti-corruption training or performing due diligence on its agents.

“In many instances, senior management actively engaged in corruption schemes and directed employees to destroy records of the misconduct. All told FMC paid nearly $30 million in bribes to government officials and others to procure business,” the SEC wrote in its posting.

Fresenius agreed to pay $147 million in disgorgement and interest to the SEC alongside a criminal fine of $84.7 million as part of a non-prosecution agreement that was announced by the Department of Justice last Friday.

Terms of the agreement include a requirement that Fresenius retain an independent compliance monitor for two years as well as the self-reporting of its FCPA compliance efforts for the year after.

“Failure to address the corruption risks in its growing business allowed complicit managers to engage in bribery schemes that went undetected for more than a decade. As companies expand their business, their internal accounting controls and compliance programs must keep up,” FCPA Unit chief Charles Cain said in a press release.

“By engaging in widespread bribery schemes across multiple countries, the company prioritized profits over compliance in its dealings with foreign government officials,” FCPA Unit Enforcement Division Deputy Chief Tracy Price said in a prepared release.

In February, Fresenius Medical Care said that it closed the $2 billion acquisition of NxStage Medical and settled self-reported violations of the U.S. Foreign Corrupt Practices Act for nearly $255 million.

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ConvaTec taps Bitar as CEO | Personnel Moves – March 26, 2019

Convatec CEO Bitar

ConvaTec (LON:CTEC) said today it tapped Karim Bitar as its new CEO, set to take the position on September 30.

Prior to joining the U.K.-based medtech company, Bitar served as CEO of agricultural biotech company Genus, holding the corner office position for approximately eight years.

Before his time with Genus, Bitar spent 15 years in various roles with Eliy Lilly, serving as prez of Europe, Australia and Canada.

“I am delighted to announce Karim’s appointment as chief executive officer of ConvaTec. He is an experienced and highly regarded leader with an excellent track record of delivering impressive results and transformational change within similar businesses. The board and I are very confident that Karim is the right person to lead ConvaTec through the next stage of the company’s development,” board chair Christopher Gent said in a press release.

“ConvaTec competes in attractive chronic care markets and has a solid portfolio of products and services. I am excited by the opportunity to lead ConvaTec to stronger and sustainable rates of profitable growth. ConvaTec has the potential to achieve market leadership across its franchises, by focusing on innovation and execution excellence and by leveraging its global presence,” Bitar said in a prepared statement.

 Monarch Medical names Lisanti as prez & CEO

Monarch Medical Technologies said yesterday that it named Bruce Lisanti as its new prez & CEO, replacing Linda Beneze who retired from the position.

Prior to joining the Charlotte, N.C.-based company, Lisanti has held leadership positions with a number of high-growth technology companies, including GE.

“On behalf of the board, we first would like to thank Linda Beneze for her contributions while leading Monarch and wish her all the best in her retirement. To continue the execution of the company’s vision, we are pleased to announce the appointment of Bruce Lisanti. With his extensive experience leading high-growth healthcare technology companies, Bruce is well-equipped to take the helm of Monarch and drive the continued advancement of the EndoTool Glucose Management system to help providers improve their clinical and financial outcomes through effective glycemic management,” Eigen Capital Holdings managing member Christophe Mallard said in a press release.

“I’m very excited to be joining Monarch at this moment in the healthcare industry and work with this phenomenal team to advance inpatient diabetes care. As more hospitals face financial pressures under value-based care payment models and increased competition with the rise of healthcare consumerism, the need to improve inpatient diabetes care is no longer just what is in the best interest of the patient, but also the provider’s bottom-line. EndoTool is well positioned as a proven solution to enhance the safety of insulin dosing, improve patient outcomes, and reduce the cost of care, benefiting both patients and providers,” Lisanti said in a prepared statement.

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 Baxter Americas prez Eyre to retire

Baxter (NYSE:BAX) said last week that its Americas president and senior VP Brik Eyre is retiring, effective June 30.

Eyre will be replaced by current global businesses prez & senior VP Giuseppe Accogli, the Deerfield, Ill.-based company said in an SEC filing.

Baxter said that Eyre will stay on as a non-executive in an advisory transition to support the transition, and that both Accogli and Eyre have begun to work on transition.

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 Micron Solutions CFO Welch retiring

Micron Solutions said last week that its existing CFO, treasurer and secretary Derek Welch has tendered their resignation, effective April 19.

The Fitchburg, Mass.-based company has not yet revealed plans to replace the departing finance head.

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 Fresenius creates global medical office

Fresenius Medical Care (NYSE:FMS; ETR:FRE) said last week that it named Dr. Frank Maddux as its new global chief medical officer and Dr. Robert Kossmann as its North America chief medical officer as part of the creation of a global medical office within the company.

The Waltham, Mass.-based company said that it is also lifting current Fresenius Kidney Care chief medical officer Dr. Jeffrey Hymes to the position of North American clinical and scientific affairs senior VP.

Fresenius Medical Care said that the newly created global medical office will look to advance teh application of clinical science and help spread knowledge across the company’s international network.

Maddux has been with Fresenius since 2009, and has held positions including clinical & scientific affairs exec VP and Fresenius NA chief medical officer.

Kossmann joined Fresenius in 2014 to oversee clinical research, development and distribution of products and pharmaceuticals within the company throughout North America, the company said.

“The creation of a global medical office under Dr. Maddux’s leadership will help us coordinate the interpretation of clinical science and medical practice patterns on a global basis. Delivering on our commitment to improve the quality of life of people living with kidney disease, Dr. Maddux and his team will pursue evolving medical opportunities, such as a more focused home offering. Dr. Kossmann and our great team of clinical leaders at Fresenius Medical Care North America will work to make an even greater impact through this improved global collaboration and focus on innovation,” Fresenius Medical Care NA CEO Bill Valle said in a press release.

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Fresenius wins FDA breakthrough device nod for fluid management software

Fresenius Medical CareFresenius (NYSE:FMS) said yesterday that it won FDA breakthrough device designation for its computer-assisted ultrafiltration control software intended to improve fluid management during hemodialysis.

The Waltham, Mass.-based company said that the software is designed to work with its newer hemodialysis machines using its CLiC device.

Fresenius said that with the software, it hopes to create a dialysis machine with embedded intelligent diagnostics to provide computer-assisted recommendations for achieving target levels of relative blood volume.

“This new software represents our commitment to driving innovation and aims to become an essential tool in reducing cardiovascular events for people living with kidney failure. Effective fluid management is critical to creating the best hemodialysis treatment possible for each individual. We are proud of this effort to further advance our proven Crit-Line technology,” renal therapies group prez Mark Costanzo said in a press release.

The company said that timelines for final development and approval of the computer-assisted ultrafiltration control software remains “uncertain given the nature of developing this complex and innovative technology.”

Earlier this week, Fresenius said that it’s planning a stock buyback of up to $370 million worth of its own shares.

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Fresenius preps $370m stock buyback

Fresenius Medical CareFresenius (NYSE:FMS) said today that it’s planning a stock buyback of up to $370 million worth of its own shares.

Shareholders in the German renal care giant said its shareholders approved the roughly 6-million-share buyback in May 2016. The €330 million repurchasing plan is slated to run from today through May 10, Fresenius said.

If fully exercised the buyback would result in the cancellation of about 1.6% of total FMS shares, the company said.

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7 women in medtech you should know

Women-In-Medtech-2019

Women hold more executive leadership roles in the medtech industry today than they did 20 years ago, but there’s still a long way to go.

There is still a women’s leadership gap in the U.S., though. According to a report from the Centers for American Progress, women hold 52% of professional jobs in the U.S. Only 14.6% are CEOs. A mere 8.1% are top earners, and a scant 4.6% are Fortune 500 CEOs. The Equal Employment Opportunity Commission also reports that only a fifth of executives, senior officers and managers in the U.S. high-tech industries are women.

Keeping with the theme of Women’s History Month and International Women’s Day, here are seven women medtech executives making a difference in the industry.

Next >>

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Fresenius closes $2B NxStage buyout, settles FCPA case for $255m

Fresenius Medical CareFresenius Medical Care (NYSE:FMS; ETR:FRE) said today that it closed the $2 billion acquisition of NxStage Medical and settled self-reported violations of the U.S. Foreign Corrupt Practices Act for nearly $255 million.

The $30-per-share deal for the Lawrence, Mass.-based home hemodialysis pioneer, first announced in August 2017, was initially slated to close by the end of that year. But it was delayed several times by the government shutdown this year and by the U.S. Federal Trade Commission, which only cleared the transaction last week. To mollify the anti-trust regulators, NxStage last July agreed to deal its Medisystems bloodlines business to B. Braun.

“The closing of this transaction is an important milestone in enhancing our patients’ choice of dialysis treatment modality,” CEO Rice Powell said in prepared remarks. “By combining NxStage’s capabilities with our broad product and service offering, we can help patients to live even more independently. In addition to broadening our product portfolio, this acquisition positions Fresenius Medical Care to benefit from the growing trend toward home-based therapies.”

“It’s a great pleasure to welcome our new NxStage colleagues. With their strong culture of innovation and transformation, they will help us to realize our vision of delivering access to superior patient care and outcomes in a lower-cost-of-care home setting to all the patients we care for. We are excited to execute on a strategy that is good for patients, the healthcare system and us,” added Fresenius Medical Care North America CEO Bill Valle.

Fresenius lowered its estimation of the deal’s integration costs, initially tabbed at $150 million, to $56.8 million to $85.2 million (€50 million to €75 million) over the next three years. Excluding those numbers, NxStage is expected to deliver net losses of -$85.2 million to -$73.9 million this year and -$45.5 million to -$34.1 million in 2020, on sales of $272.8 million to $295.5 million and $352.4 million to $375.1 million, respectively.

SEC, DoJ FCPA charges settled for $255m

The German dialysis giant also said that it had booked charges of $254.6 million (€224.0 million) as of Dec. 31, 2018, to cover the settlement of FCPA charges leveled by the Securities & Exchange Commission and the Justice Dept.

Fresenius said it voluntarily reported potential FCPA violations to the agencies after a whistleblower’s email in 2012 and cooperated with the ensuing government investigations.

“In the course of this dialogue, the company identified and reported to the government, and took remedial actions including employee disciplinary actions with respect to, conduct that resulted in the government seeking monetary penalties and other remedies against the company and disgorgement of related profits revolving principally around conduct in the company’s products business in a limited number of countries outside the United States,” Fresenius said in a Feb. 20 regulatory filing.

The settlement is an agreement in principle and must still be approved by the SEC and the Justice Dept., the company said.

($1 = €0.880133)

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FTC gives the go ahead to Fresenius, NxStage merger

Fresenius Medical Care acquires NxStage Medical

The U.S. Federal Trade Commission said yesterday that it cleared Fresenius (NYSE:FMS) in its $2 billion acquisition of NxStage Medical (NSDQ:NXTM).

As part of the approval, NxStage will have to part ways with its bloodline tubing set business, offloading them to B. Braun, according to the regulatory agency.

The vote to approve the merger was split, however, with Republicans Joseph Simons, Noah Phillips and Christine Wilson voting to approve while Democrats Rohit Chopra and Rebeca Slaughter dissented.

The FTC said that it had previously filed a complaint suggesting that the merger would harm competition for bloodline tubing compatible with hemodialysis machines in the U.S.

Late last month, Fresenius said that an interruption to the FTC’s review of the merger, caused by the partial U.S. government shutdown, delayed the end-date of the deal which has now been extended to August 6, 2019.

The $30-per-share deal represents a 29.6% premium on last year’s August 4 closing price of $23.14 for NXTM shares.

Fresenius said it plans to fund the deal with cash and debt and expects Lawrence, Mass.-based NxStage to add to net income and earnings per share within three years of the deal’s close.

Shares in Fresenius have risen approximately 4% in pre-market trading today, at $39.89 as of 9:23 a.m. EST.

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U.S. gov’t shutdown again delays closing for Fresenius-NxStage merger

Fresenius Medical Care acquires NxStage Medical

Fresenius (NYSE:FMS) said today that an interruption to the FTC’s review of its merger NxStage Medical (NSDQ:NXTM), caused by the partial U.S. government shutdown, has again delayed the end-date of the deal which has now been extended to August 6, 2019.

The end-date is not hard-set, Fresenius said, and could occur on an earlier date if there have been 60 consecutive days of full funding for the FTC, according to an SEC filing.

Fresenius said that it already signed a consent decree proposed by the staff of the FTC, but that it remains to be approved by the FTC Commissioners. Under the terms of the deal, Fresenius would divest NxStage’s bloodlines biz to B. Braun to address issues raised by FTC staff, according to an SEC filing.

The tie-up, which was delayed by NxStage in October in light of the FTC investigation, has been in the works for nearly a year and a half, having originally been announced last August.

Fresenius said late last month that it was still awaiting FTC approval of the tie-up, and that it pushed the closing date to some time early this year.

The hoped-for closing date was pushed to February 5, 2019 in October, though at the time Fresenius was hopeful it could see the acquisition complete before the end of 2018.

Last July, the German renal care giant and NxStage extended the deal’s closing date by 90 days, from August 7 to Nov. 5, but said they still expected to close the deal that year.

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Fresenius still awaiting FTC approval for NxStage acquisition

Fresenius Medical Care acquires NxStage Medical

Fresenius (NYSE:FMS) said last Friday that it is still in the process of seeking approval from the U.S. Federal Trade Commission for its $2 billion merger with NxStage Medical (NSDQ:NXTM).

The tie-up, which was delayed by NxStage in October in light of the FTC investigation, has been in the works for nearly a year and a half, having originally been announced last August.

In an update released late last week, Fresenius Medical Care said that it is still seeking approval from the agency, and that it expects the acquisition to close early next year, according to a press release.

The hoped-for closing date was pushed to February 5, 2019 in October, though at the time Fresenius was hopeful it could see the acquisition complete before the end of 2018.

In July, the German renal care giant and NxStage extended the deal’s closing date by 90 days, from August 7 to Nov. 5, but said they still expected to close the deal this year.

The FTC said a year ago that it wanted more information on the deal’s details; Fresenius is a NxStage customer, complicating its anti-monopoly implications. Last July, NxStage agreed to deal its Medisystems bloodlines business to B. Braun in a bid to mollify the FTC’s concerns.

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