Boston Scientific announced it has received FDA approval for the LOTUS Edge Aortic Valve System. Delivered via a “minimally-invasive procedure”, this transcatheter aortic valve replacement technology is approved for patients with severe aortic stenosis who are considered at high risk for surgical valve replacement via open heart surgery. The company commenced a controlled launch of the valve system in Europe in March and expects to begin a controlled launch in the U.S. in the coming weeks.
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Tuesday, April 23, 2019
Eli Lilly upgraded to Buy from Hold at Edward Jones
Edward Jones analyst Ashtyn Evans upgraded Eli Lilly to Buy from Hold.
Centene’s Obamacare Enrollment Soars As WellCare Deal Faces Regulators
Health insurer Centene’s growth from expanding Medicaid benefits and individual coverage under the Affordable Care Act into new markets continues to rise as the company enters the regulatory review process for its acquisition of WellCare Health Plans.
Centene’s first quarter profits beat analysts expectations as the health insurer benefited from the addition of the New York health plan Fidelis Care, new state Medicaid contracts and an influx of Obamacare enrollees. Adjusted earnings rose more than 50% to $585 million while revenue soared 40% to $18.4 billon for the first quarter of 2018 compared to the year ago period.
Centene, which announced last month it was buying WellCare Health Plans, now has nearly 2 million enrollees in individual plans from the ACA’s public exchanges compared to 1.6 million a year ago. Centene now sells such Obamacare coverage in 20 states after this year entering Kansas, Missouri and Nevada and expanding into six other states where it already sells individual ACA policies, including markets Anthem, Aetna and UnitedHealth Group scaled back or left altogether.
Meanwhile, Centene’s Medicaid business also added members, growing to 7.4 million total members that included more than 250,000 new Medicaid enrollees from states that expanded Medicaid under the ACA.
Centene also sees additional growth coming from Medicaid as it lands new contracts to enter new states. And in other markets, insurers are leaving like in Iowa where the state has reduced the number of carriers from three to two and Centene remains in the Medicaid business there.
Centene said its proposed acquisition of WellCare will give the combined company 22 million members in all 50 states and combined revenue approaching $100 billion, based on projections the companies have made.
With Centene already a strong player in the Obamacare and Medicaid business, executives say WellCare will give them a beachhead to expand into new markets offering private Medicare Advantage plans as well as Medicare part D drug coverage.
The addition of WellCare “will bolster and diverse our product offerings,” Centene CEO Michael Neidorff told analysts Tuesday morning during a 75-minute call with analysts to discuss the company’s first quarter earnings.
An acquisition of WellCare will allow Centene to gain scale in more markets and potentially better compete with bigger players in the Medicare Advantage business like Humana, UnitedHealth Group and CVS Health’s Aetna health insurance business. Medicare Advantage plans contract with the federal government to provide extra benefits and services to seniors, such as disease management and nurse help hotlines, with some even providing vision and dental care and wellness programs.
Centene has just begun talking to state and federal regulators and Neidorff said talks are positive. Neidorff did, however, say there is the potential for divestitures in Nebraska and Missouri but he didn’t elaborate on details.
Neidorff described the early talks with regulators as “constructive” and he felt “good about” discussions with states and the U.S. Justice Department so far. “We are finding that their questions are the kind one would expect,” Neidorff told analysts.
Align Technology short report posted to Tilson’s Empire Financial Research site
A short report regarding Align Technology, with a short recommendation and $140 price target, was posted to the website of Whitney Tilson’s Empire Financial Research. The report, which appears to have been authored by Allison Zhao, said that several key patents expired in October 2017, “opening the door for a huge influx of new competition.”
Waters Q1 Revenues Down
Waters reported today that its first quarter revenues fell 3 percent year over year, as the company saw weak sales in China and Europe and within its TA instruments division.
Waters posted revenues of $513.9 million for the quarter compared to $530.7 million in Q1 2018, below the average Wall Street estimate of $545.3 million.
Currency translation decreased sales growth by around 3 percent, the company said.
On a conference call following the earnings release, Waters President and CEO Christopher O’Connell said the company’s first quarter results were weaker than expected mainly due to slow sales in China and Europe as well as sluggish performance by the company’s TA instruments division.
In China, O’Connell said restructuring of the company’s food safety infrastructure as well as a slowdown in its generic pharma business impacted Waters’ revenues, while in Europe the company suffered from a pullback in capital spending, particularly in industrial applications and among its small molecule pharma customers.
The company’s TA instruments sales were down globally, with particular weakness in Europe, O’Connell said.
Waters’ instrument sales were down 4 percent overall, with the company’s mass spec business facing what O’Connell characterized as “modest pressure.” He said that it has seen improved demand for its high-resolution mass spec products.
Waters’ recurring revenues were up 4 percent.
From a geographic perspective, Asia-Pacific revenues were up 2 percent, with sales in China down 4 percent. The Americas were flat with US revenues up 2 percent. European sales were down 5 percent, with a drop in the company’s industrial business driving much of that decline.
O’Connell said that looking forward he expected to see a rebound in the company’s pharma business over the course of the year, noting that he expected it would return to “what might be more traditionally normal growth rates.”
He also highlighted the recent launch of Waters’ BioAccord LC-MS system for biopharma analysis and the forthcoming launch of its new cyclic ion mobility high-resolution mass spectrometer as potential growth drivers.
The Milford, Massachusetts-based company said Q1 net income fell to $109 million, or $1.51 per share, compared to $112 million, or $1.40 per share, a year ago. On a non-GAAP basis, Waters reported EPS of $1.60, below analysts’ average estimate of $1.72.
The firm’s R&D spending rose 2 percent year over year to $35.1 million from $34.5 million, while SG&A costs rose 3 percent to $134.3 million from $130.4 million.
CFO Sherry Buck said on the call that during the quarter the company repurchased 3.3 million shares of common stock for $745 million as part of a share buyback program authorized last year, under which it can purchase $3.53 billion of its common stock over a three-year period.
The company ended the quarter with $1.2 billion in cash, cash equivalents, and investments.
Waters gave Q2 2019 guidance of 2 percent to 4 percent sales growth and earnings per share of $2.05 to $2.15. For full-year 2019, it said it anticipates sales growth of between 2 and 4 percent and earnings per share in the $9.05 to $9.25 range, down from its prior guidance of 4 percent to 6 percent growth and EPS of $9.20 to $9.45. Wall Street analysts, on average, are expecting EPS of $9.34 for the year.
In Tuesday morning trade on the New York Stock Exchange, shares of Waters were down 17 percent to $200.96.
Illumina, Chinese Children’s Hospital to Launch Newborn Sequencing Study
Illumina and the Children’s Hospital of Fudan University in China plan to launch a study of whole-genome sequencing in the hospital’s neonatal intensive care unit to determine whether it can be used as a diagnostic for critically ill infants, Illumina said this week.
According to Illumina, the researchers plan to enroll 200 patients and compare the diagnostic rate of rapid WGS with genetic diagnostic methods such as microarray analysis and gene panel sequencing.
The researchers will also compare the time it takes to reach a diagnosis, impact on the patient’s prognosis, and turnaround time.
Illumina will provide the sequencing reagents and the Children’s Hospital of Fudan University will conduct the testing and data analysis and also be responsible for reporting results and providing genetic consultations with family members.
The hospital is also a sponsor of the Newborn Genome Project, which is creating a genome database for newborns in China in order to develop better methods for detecting genetic diseases in newborns and to establish standards for neonatal genetic diseases.
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