Tuesday, January 15, 2019
New Colgate Total toothpaste to launch without triclosan
Colgate-Palmolive intends to reformulate its newest version of Colgate Total toothpaste by cutting out triclosan, a controversial ingredient that the company has stood by for years, Bloomberg reports. The company has already removed the ingredient from its soaps while keeping it in toothpaste, saying its use in such products is approved by the FDA, the report says. Health advocates have cautioned against triclosan, and the FDA has itself said that studies raise questions about the substance’s potential links to cancer, effects on the thyroid, and role in making bacteria resistant to antibiotics, the report notes
https://thefly.com/landingPageNews.php?id=2849253
Microsoft and Walgreens join forces to ‘transform healthcare’
Microsoft and Walgreens announced today that they will be teaming up to help improve health care. The companies have entered into a seven-year agreement during which Walgreens plans to migrate most of its IT infrastructure over to Microsoft’s Azure cloud services. Microsoft is also providing Microsoft 365, a package of Windows 10 and Microsoft Office, to the 380,000 employees working at Walgreens stores around the world.
The two companies have set a vague goal to “transform health care delivery,” though the details on how they will achieve it are mostly vague. It mostly boils down to making data more accessible. The companies believe they can make information more readily available, it will enable more solutions that don’t require going to the doctor. That may take the form of virtual care or may be as simple as using a connected device to remind a person to take their medication each day. Essentially, it’s the simple stuff that can reduce emergency room visits and decrease instances of readmissions at hospitals.
Microsoft and Walgreens also have committed to a multi-year research and development investment to “build health care solutions, improve health outcomes and lower the cost of care.” They also plan on exploring the possibility of creating innovation centers, though didn’t go into detail on what those centers will do.
Microsoft’s move into health care follows Amazon’s major push into the field. Last year, the retail giant a partnered up with JPMorgan and Warren Buffett’s Berkshire Hathaway to work toward tackling growing expenses associated with health care. Amazon also reportedly launched new software tools for medical centers that can mine for medical records to help cut costs.
Tenet Healthcare (THC) and Humana (HUM) Sign Multi-Year Agreement
Tenet Healthcare Corporation (NYSE: THC) and Humana Inc. (NYSE: HUM) today announced that they have signed a new multi-year agreement, providing Humana members with in-network access to Tenet’s hospitals, outpatient centers and employed physicians. The Humana contract runs through May 2023.
Ron Rittenmeyer, Tenet’s Executive Chairman and Chief Executive Officer, said, “We are pleased to have reached this agreement with Humana, and look forward to continuing to provide their members with high-quality care and trusted service today and into the future.”
“This agreement with Tenet Healthcare ensures continued in-network access to Tenet facilities and physicians for Humana members, and it reflects our ongoing commitment to provide a broad range of high quality health care options for the people we serve,” said George Renaudin, Senior Vice President at Humana.
Offshoring over 1,000 health care jobs? That’s coming soon at Tenet
Tenet Healthcare, one of the country’s largest for-profit hospital systems, has a new plan to accelerate its turnaround: Send a bunch of jobs out of the country.
At an investor conference last week and during an interview in Dallas, officials said the company is looking “aggressively” at offshoring jobs. And the action won’t be limited to Conifer, its revenue billing operation in Frisco, which would seem a prime target.
“We’ll look at aggressively doing that across the whole enterprise,” CEO Ronald Rittenmeyer said at Tenet headquarters in downtown Dallas.
He said the company hadn’t determined the number of employees who would be displaced, which he expects to happen over the next 12 to 18 months.
“I imagine it will be more than 1,000, but I don’t think it’s gonna be … certainly not 10,000 or 5,000,” he said. “The number moves around, depending on what we’re looking at.”
Fewer than 1,000 information technology jobs are already performed for the company in India, he noted. Tenet outsources that work to NTT Data, which then offshores some of the workload. Tenet has not previously sent its own administrative functions abroad, he said.
Doctors, nurses and those acting directly with patients won’t be affected. But some workers who handle corporate functions will be on the line.
Tenet has about 6,150 employees in North Texas, which includes the headquarters of three major operations, a spokeswoman said.
The publicly traded corporation is based in a tower in downtown Dallas. Its billing unit, Conifer, is in Frisco. Its ambulatory services operation, United Surgical Partners International, is in Addison.
“Obviously, we’ll look at all three headquarters,” Rittenmeyer said of the offshoring possibilities.
The company has not told employees about the plan, even though the CEO revealed it to investors at a public forum in San Francisco. Rittenmeyer said he wanted investors to know what was ahead for 2019, but it was too early to do the same with workers.
“People will want to know specifics — how does it affect me?” he said. “I can’t answer where or who, not at this point.”
Rittenmeyer expects to reveal more details at an employee town hall meeting, perhaps in the first quarter. He said workers shouldn’t be overly concerned, in part because changes won’t be immediate.
“It’s not tomorrow morning — we’re not lining the buses up outside,” he said.
In addition to offshoring, he told investors that Conifer was still for sale. Although it was put on the market about a year ago, his reaffirmation gave the stock price a boost — and gave employees more to ponder.
Tenet has been through a tumultuous period. Early in the decade, it expanded rapidly, buying hospitals and building new medical towers. As some bets failed to pay off and it had to pay huge legal settlements, Tenet racked up big losses and lost over half its stock market value.
That led to unrest among shareholders, including activist investors who took a big stake in the company. Rittenmeyer, a board member since 2010, stepped up to become executive chairman in August 2017. Two months later, he became CEO.
In just over a year, Tenet has cut $250 million in costs and turned over much of its leadership team. Twenty percent of corporate executives have changed, including the CEO, COO and chiefs of technology and marketing. Tenet changed 35 percent of its hospital leaders after eliminating a layer of regional overseers. Half of the board of directors is new.
That’s a lot of turnover, Rittenmeyer conceded, but that can be good or bad, depending on who departs and who arrives.
“For the most part, it’s the right turnover,” he told analysts.
How’s that affecting employee morale? He said feedback has been positive because new workers brought a fresh perspective and decision-making is faster.
“I’m sure some people didn’t like it, but the reality is: We needed to change,” Rittenmeyer said.
Tenet has 68 hospitals in the U.S., including the San Antonio, El Paso and Brownsville markets. Last year, Tenet sold a handful of hospitals in the Dallas area, but it owns over 40 surgery and urgent care centers here.
Three years ago, Tenet had nearly 135,000 employees, and today it has 115,000 nationwide. Rittenmeyer attributed most of the job losses to the sale of hospitals and other business units.
Tenet stands to benefit from the corporate tax cuts enacted at the end of 2017. The company said tax payments would fall by $10 million to $20 million annually for the next several years.
President Donald Trump helped sell the tax cuts by insisting they’d lead to more good jobs in the U.S. Now that Tenet wants to ship out jobs, how does that square?
“You’re implying that it’s financial, and it’s not all financial,” Rittenmeyer said, adding that the move was “for business reasons.”
Offshoring will allow Tenet to invest in other areas such as surgery centers, he said.
As a former top executive at EDS, which pioneered outsourcing, he said he’s very familiar with the practice. EDS even owned companies in India and elsewhere for that purpose.
In the beginning, offshoring was all about lowering costs, and labor savings today can still top 30 percent. That’s important for a company rebounding from over $1 billion in net losses.
“We’re in the business to make a profit — No. 1,” Rittenmeyer said. “That’s our job, so we’re always going to be looking to reduce our costs. That’s just the facts.”
Five Prime announces corporate restructuring, cutting 20% of headcount
Five Prime Therapeutics announced a corporate restructuring to focus resources on its development pipeline, comprising five clinical-stage cancer programs in various solid tumor types and addressing multiple cell types in the tumor microenvironment. The company is eliminating 41 current positions, representing approximately 20% of its current headcount, and will take a disciplined approach to replacing and adding headcount. The positions eliminated are primarily in areas relating to research, pathology and manufacturing. The company expects that the restructuring and other cost-saving efforts will result in a $10M reduction in net cash used for operating activities during fiscal year 2019 as compared to 2018, with additional expected savings in 2020 and beyond due to lower ongoing personnel expense. Five Prime estimates that it will incur approximately $2 million of pre-tax charges for severance and other costs related to the restructuring, primarily during the first quarter of 2019. The company’s financial guidance that it anticipates ending 2019 with $148 to $153 million in cash, cash equivalents and marketable securities reflects the expected reduction in the company’s operating expenses due to the elimination of positions. The company has no debt and ended 2018 with $270 million in cash, cash equivalents and marketable securities and believes this cash is sufficient to fund programs through multiple data readouts.
https://thefly.com/landingPageNews.php?id=2849189
ViewRay initiated at Guggenheim
ViewRay initiated with a Buy at Guggenheim. Guggenheim analyst Chris Pasquale started ViewRay with a Buy rating and $13 price target.
https://thefly.com/landingPageNews.php?id=2849197
BTIG Says Buy The Dip In Medtronic
Shares of medical technology company Medtronic PLC MDT 1.56%were flirting with the $100 per share mark for parts of 2018, but have since come down to a level that should be taken advantage of by investors, according to BTIG.
The Analyst
Analyst Sean Lavin upgraded Medtronic from Neutral to Buy with a new $100 price target.
The Thesis
During the JPM Healthcare conference last week in San Francisco, BTIG spent time with Medtronic CEO Omar Ishrak and CFO Karen Parkill.
Lavin‘s primary takeaway was that the executives appeared to be “very conservative” on the impact of worries about paclitaxel and higher mortality signals. The company’s management feels “very confident” its devices are safe and has the necessary data to back up the claim, the analyst said.
During the conference, Medtronic lowered its 2019 outlook due to a slowdown in the DCB market from paclitaxel concerns and changes to the LVAD market, Lavin said. This creates a scenario where Medtronic should be able to at the very least match its guidance or even beat it, he said.
Beyond 2019, the company boasts a “broad and rich” pipeline for fiscal 2020 that can help generate at least 4-percent top-line growth in spine, neurovascular, leadless pacing and diabetes, the analyst said. The Street will also view a robotics launch favorably, although the company’s ambitions are not yet clear, as such a move could impact surgical margins, he said.
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