Ex-Danaher chief to lead GE

While John Flannery’s tenure at the helm of General Electric was far shorter than that of his predecessor Jeff Immelt, the two former chiefs have one thing in common: They both presided over a sharp drop in GE shares.

The U.S. industrial conglomerate on Monday ousted Flannery as chief executive officer in a surprise move, replacing him with outsider and board member Larry Culp.

In Culp, GE is tapping a former head of another industrial company, Danaher Corp. Culp led Danaher from 2000 to 2014, helping grow an industrial company into a broader conglomerate through a series of acquisitions, while growing earnings.

Danaher’s stock soared over that time and prospered while GE’s has struggled.

Flannery’s departure comes as he was trying to turn around GE, including through a series of major planned divestitures from the sprawling company.

GE has continued to struggle, including with a recent issue with problems with turbines in its important power unit.

GE’s share price suffered under Flannery, falling more than 50 percent since he took over last August. Under Immelt, GE’s shares lost more than a third of their value.

GE’s valuation, based on price-to-earnings ratios, also has declined, making the shares far cheaper than those of rival diversified industrial companies. The stock was up nearly 9 percent to $12.29 in Monday trading after the CEO announcement.

“Investors grew impatient with the lack of improvement and with the sheer scale of the problems uncovered; however, these problems were not created under his tenure,” CFRA Research analyst Jim Corridore said in a note.

Indeed, GE’s revenue and profit has declined over the years, in part as GE has pulled back from finance and other businesses. And in recent days the company’s market value slipped below $100 billion after approaching $600 billion about 18 years ago.

https://www.marketscreener.com/DANAHER-CORPORATION-12295/news/GE-s-long-share-price-decline-claims-another-casualty-27352218/

Fresenius Shares Rise After Favorable Court Ruling

Shares in Fresenius SE & Co. KGaA (FRE.XE) jumped more than 10% Monday afternoon after a Delaware court ruled in favor of the company’s decision to back out of a merger agreement with Akorn.

The German health-care company terminated its $4.3 billion agreement to buy Akorn in April, claiming that the generic drugmaker was in breach of FDA data protection regulations and had failed to fulfill several closing conditions of the deal.

In response, Akorn sued Fresenius in the Delaware Court of Chancery, which ruled in favor of Fresenius’s actions. The judgment is not yet final, Fresenius said.

At 1340 GMT shares in Fresenius were trading 8.2% higher at EUR68.40, having earlier risen as high as EUR69.64.

Akorn subsequently said it is disappointed with the court ruling and plans to appeal.

“We continue to believe Fresenius’ attempt to terminate the transaction is in breach of our binding merger agreement,” the company said.

https://www.marketscreener.com/FRESENIUS-436083/news/Fresenius-Shares-Rise-After-Favorable-Court-Ruling-27350709/

Ono Pharma gains as Nobel awarded for cancer-fighting method used in its drug

Shares of Ono Pharmaceutical Co jumped to levels not seen in over two years after a Nobel Prize was awarded to researchers for a cancer-fighting method used in Opdivo, a drug it co-developed with Bristol-Myers Squibb Co.

Shares of the Japanese drugmaker soared as much as 6.9 percent in early morning trade on Tuesday to hit 3,430 yen, the highest level since August 2016.

On Monday, American James Allison and Japanese Tasuku Honjo won the 2018 Nobel Prize for Physiology or Medicine for game-changing discoveries about how to harness and manipulate the immune system to fight cancer. Their work in the 1990s has since swiftly led to new and dramatically improved therapies for cancers such as melanoma and lung cancer.

https://www.marketscreener.com/BRISTOL-MYERS-SQUIBB-COMP-11877/news/Bristol-Myers-Squibb-Ono-Pharma-shares-soar-Nobel-awarded-for-cancer-fighting-method-used-in-its-27353560/

Leerink: Improving Fundamentals Drive Teva Upgrade

TEVA Pharmaceutical Industries TEVA 0.56%‘s fundamentals have substantially improved over the last few months, giving the stock a more balanced risk-reward profile, according to Leerink.

The Analyst

Leerink analyst Ami Fadia upgraded TEVA Pharmaceutical from Underperform to Market Perform and raised the price target from $16 to $24.

Goldman Sachs analyst Jami Rubin reiterated a Buy rating on Teva with a $30 price target. The analyst added Teva to Goldman’s Conviction List.

The Thesis

Leerink’s Fadia considers a more stable pricing environment and improved indicators of FDA approval to be the pharma stock’s main growth drivers.

Teva is well-positioned to exceed its 2018 sales target of $1.5 billion due to a slow switch to generic alternatives to its drugs, the analyst said.

The recent approval of Ajovy puts the company second in the calcitonin gene-related peptide race, while Austedo continues to receive strong physician feedback and preference, Fadia said.

Leerink projects a 25-percent decline in U.S. generic sales, as well as an improvement in overall pricing trends and contributions from new products.

Goldman Sachs analyst Rubin said she’s “puzzled” by Teva’s underperformance.

“Various press reports (Bloomberg) and feedback from investors have attributed the weakness to the Street lowering estimates and concerns around the approval of Eli Lilly And Co LLY 0.29%‘s CGRP, both of which we believe are not thesis-changing and well-understood.”

The analyst named the following as catalysts for Teva:

• Management’s communication of 2018 headwinds, which will likely keep estimates in the guidance range.
• Teva’s position in the market — despite competitive approvals. “We are encouraged by the fact that TEVA’s promotional activities for Ajovy will be competitive with a zero-copay offering through the end of 2019, slightly longer than LLY’s through the end of 3Q19 and Amgen, Inc. AMGN 0.18%‘s, which is only for a few months post-launch.”
• The pharma company is set for a return to top-line growth and a delevering to 4x by 2020, giving the stock “meaningful upside,” Rubin said.

https://www.benzinga.com/analyst-ratings/analyst-color/18/10/12432584/leerink-improving-fundamentals-drive-teva-upgrade

What Analysts Say About Insmed Following Arikayce Approval

Insmed Incorporated INSM 22.16% stock crashed Monday after the U.S. Food & Drug Administration approved the company’s antibiotic Arikayce. In addition to “sell the news” traders moving on following the FDA approval, some sellers are likely concerned about the revelation that some Arikayce cause lung issues “led to hospitalizations in come cases.”

Several Wall Street analysts weighed in on Insmed. Here’s a sampling of what they had to say.

Voices From The Street

H.C. Wainwright analyst Andrew Fein said the good news of the FDA approval was widely anticipated, whereas the black box warning about lung-related hospitalizations was not.

“We think the boxed warning, inevitably casted a layer of uncertainty around the uptake of Arikayce in the eyes of investors (buysiders must now re-survey physicians seeking the degree to which the black box warning will impact penetration),” Fein wrote.

Credit Suisse analyst Marty Auster said investors should expect Insmed stock to recover in coming months.

“We are comfortable with Arikayce’s initial prospects as the drug is intended for a high unmet need population (refractory NTM MAC patients) without treatment options,” Auster wrote.

Stifel analyst Adam Walsh said investors should be concerned about the black box warning and should expect robust Arikayce uptake.

“Regardless, we see solid value in INSM shares at current levels based on the Arikayce refractory opportunity alone, independent of planned future label-expansion possibilities (i.e. front-line, maintenance, etc.),” Walsh wrote.

Ratings And Targets

Insmed’s stock closed at $15.74, down 22.16 percent.

Despite Monday’s sell-off, most analysts are still bullish about Arikayce and Insmed:

• H.C. Wainwright has a Buy rating and $43 target.
• Credit Suisse has an Outperform rating and $35 target.
• Stifel has a Buy rating and $43 target.

https://www.benzinga.com/analyst-ratings/analyst-color/18/10/12434835/what-analysts-have-to-say-about-insmed-following-arikay

Medicare Advantage enrollees seen topping 22M in 2019 as premiums drop

Medicare Advantage premiums will continue to decrease into 2019, according to the Centers for Medicare & Medicaid Services, in stark contrast to the commercial insurance market.

CMS expects average monthly premiums to decrease 6% to $28 per month, down from an average of $29.81 in 2018. The agency anticipates lower premiums will drive enrollment to an all-time high, with 36% of Medicare beneficiaries purchasing Medicare Advantage coverage in 2019, a total of 22.6 million people.

Medicare Part D premiums are also expected to drop, from $33.59 in 2018 to $32.50 next year. It’s the second straight year that Part D premiums have declined.

“Medicare Part D and Medicare Advantage demonstrate the successes possible when we harness consumer choice and private-sector innovation to improve care and lower cost,” said Department of Health and Human Services Secretary Alex Azar in a statement.

The projection would mean a four-year streak of Medicare Advantage premium decreases since hitting $32.91 in 2015. Premiums in MA plans are tied to income, so about 46% of enrollees will have a zero premium next year.

The agency said 83% of current enrollees will see their premium stay the same or decrease from 2018.

The popularity of MA plans has enabled CMS to expand its range of programs. Next year, the program will offer about 600 more plans than in 2018 to a total of approximately 3,700 plans across the country. The agency said 91% of beneficiaries will have access to 10 or more plans next year.

“The popularity of programs, such as Medicare Advantage, and with the various new supplemental benefits and policy changes that have been adopted, we expect plan choices to be even more robust moving forward,” said CMS Administrator Seema Verma.

In addition, MA plans will be able to offer supplemental benefits such as adult day care services, in-home support services, caregiver support services, home-based palliative care and therapeutic massages. They will also be able to offer reduced cost sharing for beneficiaries with chronic conditions like diabetes, CMS said.

A spending bill passed earlier this year also including legislation that will allow MA plans toincorporate telehealth benefits beginning in 2020.

MA plans aren’t without fault. A recent report issued by the HHS Office of Inspector General indicated MA insurers overturn 75% of denials on appeal, raising concerns that plan sponsors are limiting access to care in the name of higher profits.

https://www.fiercehealthcare.com/payer/medicare-advantage-premiums-to-decrease-2019-leading-enrollment-to-surge

Dialysis companies just got a reprieve in California — at least for now

Shares of dialysis providers DaVita Inc. and Fresenius Medical Care AG & Co. rose in heavy Monday trade after California Gov. Jerry Brown vetoed a bill late Sunday that would have significantly affected their revenue.

The bill, SB 1156, would have restricted the financial assistance that dialysis companies offer patients. The assistance, however, maximizes how much companies are reimbursed for their dialysis services and has the effect of raising health insurance premiums, according to the bill’s sponsor.

Brown said in a memo to the California senate that the legislation “goes too far as it would permit health plans and insurers to refuse premium assistance payments and to choose which patients they will cover.”

“I encourage all stakeholders to continue to work together to find a more narrowly tailored solution that ensures patients’ access to coverage,” he wrote.

Individuals with kidney disease need regular dialysis to remove waste from the body and keep blood pressure under control, functions that are normally handled by healthy kidneys.

The legislation in question had the support of the Service Employees International Union and health insurer Blue Shield of California and was opposed by dialysis providers, as well as the non-profit American Kidney Fund, which runs the need-based programs. DaVita said in a statement that the bill, had it gone through, would have let health plans “discriminate against low-income dialysis patients who rely on charitable assistance to pay their insurance premiums.”

Though the latest development marked a win for dialysis providers, the battle may well rage on.

California voters will vote on a ballot measure, Proposition 8, next month that would limit how much revenue dialysis providers can earn from commercially insured individuals.

The SEIU and the bill’s other supporters also plan to reintroduce the bill, SB 1156, next year under a new governor, according to Height Capital Markets analyst Andrea Harris.

DaVita DVA, +3.36%  shares rose 3.4% in Monday trade and FreseniusFME, +2.56%   shares rose 3.3%.

DaVita stock has lifted 6.6% over the last three months and Fresenius stock has risen 5.8%, compared with a 7.6% rise in the S&P 500 SPX, +0.36% and a 9.8% rise in the Dow Jones Industrial Average DJIA, +0.73%

https://www.marketwatch.com/story/dialysis-companies-just-got-a-reprieve-in-california-at-least-for-now-2018-10-01?siteid=rss&rss=1