Fresenius buying pharmaceutical firm for $3.7B

Germany-based healthcare products and services firm Fresenius has agreed to acquire Schaumburg, IL-based APP Pharmaceuticals in a bid to enter the North American intravenous drug market. APP is a manufacturer of injectable pharmaceutical products for hospitals. Under the terms of the deal, Fresenius will assume all of APP's outstanding debt, and will pay an additional $6 per share later if APP meets certain earnings targets between this year and 2010. Given the debt assumption and the possible additional cash payments, the deal could ultimately total $5.6 billion. APP will join the company's division providing infusion therapy products in Europe, Latin America and the Asia-Pacific region.

The deal should help Fresenius brace itself for possible future changes in the infusion therapy business, which is vulnerable to possible coming changes in reimbursement for antianemia drugs. Right now for-profit dialysis chains routinely give patients large doses of antianemia drug Epogen, but such levels have been questioned by payers including Medicare.

To learn more about this deal:
- read this Modern Healthcare article (reg. req.)

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Dialysis chains profit from higher Epogen use