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Tuesday, July 30, 2019

Celgene Reports Q2 Earnings Beat, Raises Guidance

Celgene CELG 0.12% reported second-quarter earnings of $2.86 per share, which beat the analyst consensus estimate of $2.63 by 8.75%. This is a 32.41% increase over earnings of $2.16 per share from the same period last year.
The company reported quarterly sales of $4.4 billion, which beat the analyst consensus estimate of $4.23 billion by 4.02%. This is a 15.36% increase over sales of $3.814 billion the same period last year.
Celgene also raised fiscal year 2019 guidance: adjusted EPS from $10.60-$10.80 to $10.65-$10.85 versus a $10.73 estimate; and sales from $17 billion-$17.2 billion to $17.2 billion-$17.4 billion versus a $17.11 billion estimate.
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Lexicon target cut to $3 from $15 by Citi

Maintains Buy
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Cara target upped to $39 from $35 by Piper

Maintains Overweight
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LHC Group to purchase assets from VNA Home Health of Maryland

LHC Group, Inc. (NASDAQ: LHCG) announced today that it has agreed to purchase a home health and home and community based services (HCBS) provider located in Baltimore from VNA of Maryland and Elite Home Care Services.
The agreement is expected to close on September 1, subject to customary closing conditions. LHC Group expects annualized revenue from this purchase of approximately $35 million and that it will not materially affect its 2019 diluted earnings per share. To date in 2019, LHC Group has acquired or agreed to acquire 12 home health, five hospice, and one HCBS locations in four states and the District of Columbia, representing annualized revenue of approximately $72.5 million.
The provider’s home health services will continue to operate under the current name of VNA of Maryland. HCBS services will operate under the name of Maryland Private Care. The provider serves patients in Baltimore and the licensed service area with in-home healthcare.
LHC Group will continue to work with current referral sources and patients to ensure there is no interruption in the continuity of care.
Home healthcare is an effective and affordable solution for many patients’ healthcare needs and situations. Home health professionals treat a wide range of medical conditions, allowing patients to rest and recover in the comfort of home.
HCBS caregivers offer personal assistance with everything from grooming and light housekeeping to transportation and errand running. They will come to a patient’s home or assisted living facility and help with day-to-day needs, providing care and companionship when it’s needed most.
“We are excited by this opportunity to expand our footprint in Maryland and provide quality in-home care for even more patients,” said Keith Myers, LHC Group chairman and CEO. “VNA Home Health of Maryland has a long history of providing great care in this state. We look forward to continuing and enhancing that level of care as we help more people recover and manage their health conditions in the comfort of home.”
“This agreement with LHC Group is the right decision at the right time,” said Barry Ray, VNA of Maryland CEO. “As a leading provider of in-home care, LHC Group will provide VNA with more staff resources, new paths for growth and development, and, most importantly, expanded care capabilities and a solid support system for the patients and families we serve.”
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Mylan reaches $30 million settlement in SEC’s EpiPen probe

Mylan NV has reached a tentative agreement to pay $30 million to resolve a probe by the U.S. Securities and Exchange Commission related to its emergency allergy shot EpiPen, which became the center of a firestorm over price increases.

The drugmaker in a regulatory filing on Monday disclosed that it had reached an agreement-in-principle with the SEC’s enforcement staff to resolve the investigation that dated back to 2016. Mylan said it will neither admit nor deny wrongdoing as part of the accord. (http://bit.ly/2ym0CaO)
The EpiPen, which Mylan acquired in 2007, is a handheld device that treats life-threatening allergic reactions by automatically injecting a dose of epinephrine.
Mylan came under fire in 2016 after raising the price of a pair of EpiPens to $600, from $100 in 2008, enraging consumers and putting it in the center of the ongoing U.S. debate over the high cost of prescription medicines.
In 2017, the drugmaker finalized a $465 million settlement resolving U.S. Justice Department claims it overcharged the government for EpiPen.
The deal resolved claims that Mylan avoided higher rebates to state Medicaid programs by misclassifying EpiPen as a generic product, even though it was marketed and priced as a brand-name product.
In 2016, Mylan revealed the SEC had launched its own investigation related to EpiPen and sought copies of its communications with the U.S. Centers for Medicare and Medicaid Services and documents related to the Medicaid rebate program.
Mylan said the settlement with the SEC is subject to approval by the agency’s commissioners.
Separately on Monday, Mylan confirmed that it would merge with Pfizer Inc off-patent branded drugs unit, a move that will help it diversify its business as it continues to be pressured by falling prices of generic drugs in the United States.
Shares of generic drugmakers have suffered over the past several years and, this year alone, Mylan shares had lost one-third of their value through Friday, before news broke of the Pfizer tie-up.
The companies are also in talks to transfer a Pfizer manufacturing unit that makes EpiPen to the newly created business, although it remains unclear whether this will address an ongoing shortage of the product.
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Pfizer Shares Down 6%; Morgan Stanley, Bank of America Cut

Pfizer shares were down 6% to $38.96 in heavier-than-average trading Tuesday morning.
Morgan Stanley downgraded Pfizer to Equal-weight from Overweight and lowered its price target to $40 from $48.
Mylan N.V. (MYL) and Pfizer said Monday they agreed to combine Mylan with Upjohn, Pfizer’s off-patent branded and generic established medicines business.
Pfizer’s planned exit of Upjohn exposes lower-than-expected earnings for both the remaining company and the off-patent business, Morgan Stanley said. “Although we view the Upjohn exit…as a strategically sound deal, new 2020 management disclosures revealed earnings power that is much weaker than we realized,” the Morgan Stanley note said.
Bank of America Merrill Lynch downgraded Pfizer to Neutral from Buy and lowered its price objective to $41 from $49.
Bank of America said it is downgrading Pfizer based on its updated sum-of-the-parts valuation, including expected dilution from the Upjohn deal and the valuation outlook for the remaining company.
“We ultimately believe PFE’s decision to spin-off its Upjohn unit makes strategic sense given the unit was likely to be meaningful drag on growth and allows the company to focus on its innovative pharma unit,” the Bank of America note said.
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Pfizer Down Nearly 6%, on Track for Largest Percent Decline in Over a Decade

Pfizer Inc. (PFE) is currently at $39.03, down $2.42 or 5.83%
— Would be lowest close since April 22, 2019, when it closed at $38.98
— On pace for largest percent decrease since Jan. 26, 2009, when it fell 10.32%
— Earlier Tuesday, both Morgan Stanley and Bank of America downgraded their rating for Pfizer, Benzinga reported
— On Monday, Pfizer Inc. said it had agreed to merge its off-patent drugs business with Mylan N.V., creating a new company that will be one of the world’s biggest sellers of lower-priced medicines in an increasingly competitive market
— Currently down four of the past five days
— Currently down two consecutive days; down 9.41% over this period
— Worst two day stretch since the two days ending Nov. 20, 2008, when it fell 11.3%
— Down 9.89% month-to-date
— Down 10.57% year-to-date
— Down 22% from its all-time closing high of $50.04 on April 12, 1999
— Traded as low as $38.82; lowest intraday level since April 22, 2019, when it hit $38.81
— Down 6.34% at today’s intraday low; largest intraday percent decrease since Feb. 5, 2018, when it fell as much as 7.13%
— Worst performer in the DJIA today
— Eighth worst performer in the S&P 500 today
— Most active stock in the S&P 500 today
— Subtracted 16.41 points from the DJIA so far today
All data as of 10:44:57 AM
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