bluebird bio (NASDAQ:BLUE): Q2 GAAP EPS of -$3.55 misses by $0.48.
Revenue of $13.3M (+69.4% Y/Y) beats by $0.17M.
Shares -1.19%.
Thursday, August 1, 2019
Tandem Diabetes Care Q2 sales up 174%; guidance raised
Tandem Diabetes Care (NASDAQ:TNDM) Q2 results ($M): Sales: 93.3 (+173.6%).
Net income: (1.5) (+97.5%); EPS: (0.03) (+97.4%).
Non-GAAP EBITDA margin: 13%.
Pump shipments: 21,258 (+290%).
2019 guidance: Sales: $350M – 365M from $300M – 315M; non-GAAP EBITDA margin: 5 – 10% from breakeven to positive.
Shares up 10% after hours.
Previously: Tandem Diabetes Care EPS beats by $0.21, beats on revenue(Aug. 1)
Emergent Biosolutions EPS beats by $0.03, beats on revenue
Emergent Biosolutions (NYSE:EBS): Q2 Non-GAAP EPS of -$0.12 beats by $0.03; GAAP EPS of -$0.18 misses by $0.03.
Revenue of $243.2M (+10.4% Y/Y) beats by $25.26M.
Healthcare Abroad: An Important Candida Auris Risk Factor
Candida auris colonization was found in a Maryland hospital patient who was previously hospitalized in Kenya — thus emphasizing the importance of identifying risk factors for this emerging infection, CDC researchers said.
Healthcare exposure outside the U.S. is an important such factor, even if C. auris is not known to be widespread in that country, and healthcare facilities should follow CDC guidelines that recommend screening for C. auris colonization if any patient has an overnight stay in a healthcare facility abroad any time in the last year.
“Health care facilities should develop strategies to consistently and reliably obtain patients’ travel histories for medical care received outside of the United States in order to identify patients to be screened, and patients should inform their health care providers about any health care received abroad to inform their care” wrote Richard B. Brooks, MD, of the CDC, and colleagues in the Morbidity and Mortality Weekly Report.
Earlier this week in a commentary in the Annals of Internal Medicine, co-author Snigdha Vallabhaneni, MD, of the CDC, and colleagues, listed overnight stays in healthcare facilities outside the U.S. as one risk factor for C. auris.
Not only does the CDC recommend screening patients with an overnight stay in a health care facility outside the U.S. for C. auris, but patients with overnight hospitalization abroad in the last 6 months should be placed on contact precautions, and screened for carbapenem-producing organisms like carbapenem-resistant Enterobacteriaceae.
This particular case study details a patient medically evacuated from Kenya to an acute hospital in Maryland, and placed on contact precautions. In Kenya, the patient underwent several operations, including arterial clipping and placement of a tracheostomy and a feeding tube, the authors said. They added that the patient also developed sepsis, pneumonia, and a urinary tract infection and was treated with broad-spectrum antibiotics and at least one course of antifungal medications in Kenya.
Researchers noted that the patient had ongoing fevers, and specimens collected at admission revealed the growth of oxacillinase-48-like-producing carbapenem-resistant Klebsiella pneumoniae in urine and New Delhi metallo-beta-lactamase-producing carbapenem-resistant Pseudomonas aeruginosa in sputum. However, they added, while C. auris had been detected in a hospital in Kenya, it was not in the facility where the Maryland patient was hospitalized.
Maryland Department of Health, in consultation with the CDC, recommended that the patient be evaluated for C. auris colonization. Once the patient was identified as being colonized by C. auris, 21 patients in the same hospital unit were evaluated, but all screened negative.
The authors noted that transmission was likely prevented because of the hospital’s use of contact precautions and “rapid recognition” of the patient’s risk for multi-drug resistant organism colonization.
“Early identification of C. auris is critical to preventing further transmission,” they said.
The authors disclosed no conflicts of interest.
Takeda whittles away costs—and assets—to keep its debt-cutting promises
Takeda’s been cutting costs on one hand and raising cash on the other to pay off its Shire deal debt—and so far, it’s on track to hit those goals, executives said this week.
The company’s cost-saving plan is “well on track” CFO Costa Saroukos said during a conference call Wednesday, as the Japanese pharma works to fold in Shire’s operations. “[A]nd we delivered strong margins,” the CFO added.
In fact, Takeda in May dialed up its annual cost-savings target to about $2 billion by the end of 2021. It had predicted savings of $1.4 billion when it first unveiled the Shire buyout.
Job cuts will deliver a big chunk of that savings; the company has said it plans to cut 6% to 7% of the combined Takeda-Shire workforce, or around 3,600 employees. So far, the company has chosen employees for 79% of the jobs on its payroll, with “minimal” changes among those who were picked, Saroukos said. For the quarter ended June 30, Takeda booked 36.7 billion yen ($338 million) in one-time integration costs.
The company’s been working with vendors to shave costs, too. Takeda gathered 40 of its largest suppliers for a summit in Boston in June, and thanks to that gathering, it confirmed about $200 million worth of potential cost reductions and gained some $200 million of extra cash-flow room by extending payment terms, he said.
Takeda’s huge debt load was the very concern opponents of the Shire deal raised when it was first proposed. To pay down debt, Takeda previously said that it planned to sell as much as $10 billion worth of assets outside its key areas of gastrointestinal disorders, rare disease, plasma-derived therapies, oncology and neuroscience.
By the end of June, Takeda had reduced its debt-to-earnings ratio to 4.4, down from 4.7 at the end of March. And that was before it collected $3.4 billion from Novartis in the sale of Shire’s Xiidra eye drug, which was completed on July 1.
Takeda execs also touted its margins, which hit 32.4% for the quarter ended in June, which is the company’s fiscal Q1. Cost cuts and more efficient spending helped, management said. In May, Takeda had estimated margins for fiscal 2019 in the mid-20s, percentage-wise—versus fiscal 2018’s 22%—and mid-30s looking farther ahead. But thanks to the Q1 performance, it hiked this year’s expectations to the high 20s.
While Saroukos cautioned that Q1 isn’t necessarily representative of what investors can expect for the rest of the fiscal year, thanks to some “phasing of costs and loss of exclusivity timing,” he did say the number “gives us great confidence” in hitting its margin targets. And the positive trends were music to investors’ ears; Takeda’s shares surged by more than 7% in Thursday trading in Tokyo.
To keep its top managers focused on those numbers, Takeda embedded them into the performance goals used to evaluate executives’ short-term and long-term incentive pay for 2019, as well as a special long-term incentive plan tied to Shire’s integration.
That’s not to say there aren’t challenges ahead. Several Takeda products are facing copycat attacks in the U.S., for instance. Gout drug Uloric saw sales drop 13% to 12.2 billion yen, as two of the three approved generics rolled onto the market. A knockoff version of hereditary angioedema therapy Firazyr, which Takeda acquired with Shire, debuted at a 54% discount, Saroukos said, which poses a threat even though its recently-approved follow-up drug Takhzyro has been growing nicely.
Insomnia therapy Rozerem and ADHD medication Adderall XR also either face existing generic approvals or copycat competitors already stealing sales.
But one big generic threat eased up. Rather than expecting additional generics to hit its blockbuster myeloma drug Velcade in July, the company now said it assumes no additional copycats will launch this fiscal year. And despite Fresenius Kabi’s nonequivalent copycat, Velcade actually managed to grow sales by 7% year-over-year, to 28.1 billion yen in the U.S. in Q1, helping Takeda to raise its full-year guidance to flat to slightly increasing.
Surmodics Raises Fiscal 2019 Revenue and EPS Guidance After FQ3 Report
Surmodics, Inc. (Nasdaq: SRDX), a leading provider of medical device and in vitro diagnostic technologies to the healthcare industry, today announced results for its fiscal 2019 third quarter ended June 30, 2019, and updated its financial outlook for fiscal 2019.
Summary of Third Quarter and Recent Highlights
- Revenue of $24.3 million, an increase of 9.5% year-over-year
- GAAP EPS of $0.11, non-GAAP EPS of $0.15
- TRANSCEND clinical trial enrollment more than 90% complete
“Our third quarter results, which demonstrated strong commercial and operational execution, marked our sixth consecutive quarter of year-over-year revenue growth,” said Gary Maharaj, President and CEO of Surmodics, Inc. “This consistent progress demonstrates our ability to simultaneously produce organic revenue growth while continuing to execute on our key strategic goals. Importantly, we are making progress in our TRANSCEND clinical trial and are currently over 90% enrolled and remain confident that we will complete enrollment by the end of calendar 2019.”
Third Quarter Fiscal 2019 Financial Results
Total revenue for the third quarter of fiscal 2019 was $24.3 million, as compared with $22.2 million in the prior-year period. Medical Device revenue was $18.9 million in the third quarter of fiscal 2019, as compared with $16.7 million in the year-ago period, an increase of 13%, and includes $2.0 million from our SurVeil™ agreement with Abbott, as compared with $1.7 million in the prior-year quarter. In Vitro Diagnostics revenue was $5.4 million for the third quarter of fiscal 2019 as compared with $5.5 million in the same prior-year quarter, a decrease of 2%.
Diluted GAAP earnings per share in the third quarter of fiscal 2019 was $0.11 as compared with a loss per share of $(0.20) in the year-ago period. On a non-GAAP basis, earnings per share were $0.15 in the third quarter of fiscal 2019, as compared with $0.27 in the year-ago period.
As of June 30, 2019, cash and investments were $45.0 million. Surmodics used $0.5 million of cash from operating activities in the third quarter of fiscal 2019. Capital expenditures totaled $1.0 million for the third quarter of fiscal 2019.
Fiscal 2019 Guidance Revised
As a result of our operating performance in the first nine months of fiscal 2019, we are raising our full-year revenue and earnings guidance for fiscal 2019. We are increasing our fiscal 2019 revenue expectations to a range of $92.0 million to $94.0 million, from our previous revenue range of $88.5 million to $91.5 million. We are increasing our fiscal 2019 diluted GAAP EPS to a range of $0.24 to $0.32 per share, compared with our previous expectations of $0.14 to $0.24 per share. Diluted non-GAAP EPS is now expected to be in the range of $0.41 to $0.49 per share, compared with previous expectations of $0.26 to $0.36 per share.
Conference Call
Surmodics will host a webcast at 4 p.m. CT (5 p.m. ET) today to discuss third quarter results. To access the webcast, go to the investor relations portion of the Company’s website at https://surmodics.gcs-web.com and click on the webcast icon. The webcast will be archived on the Company’s website for 90 days. A replay of the third quarter conference call will be available by dialing 888-203-1112 and entering conference call ID passcode 6653187. The audio replay will be available beginning at 7 p.m. CT on Wednesday, July 31, 2019, until 7 p.m. CT on Wednesday, August 7, 2019.
Higher medical costs take shine off Cigna second-quarter profit beat
Health insurer Cigna Corp raised its 2019 profit forecast on Thursday, helped by last year’s acquisition of pharmacy benefit manager Express Scripts, but medical costs in the second quarter were higher than expected and its shares fell slightly.
As health insurers face regulatory uncertainty amid political efforts to lower U.S. healthcare costs ahead of the 2020 presidential election, Cigna is hoping the $52 billion acquisition will help rein in its own costs.
In the quarter, however, Cigna’s medical care ratio – the percentage of premiums paid out for medical services – was 81.6%, above the 80.2% estimated analysts, according to Refinitiv data.
The company did report higher-than-expected earnings.
Bernstein analyst Lance Wilkes said that was mostly due to the pharmacy benefits business, while investors were likely focusing on the insurance side. “The higher valuation health insurance unit has some questions from medical costs and membership growth rate,” Wilkes said.
Medical costs have been an issue for the sector, with rivals like Centene Corp and Anthem Inc also missing expectations.
Cigna Chief Executive David Cordani said in an interview that the company’s costs are growing within expectations, and that several factors influenced the ratio.
He cited lowered premium rates in its individual insurance business, the suspension of an industry-wide insurance fee and higher costs from Express Scripts drug plans.
“Costs relative to any industry measure are extremely positive,” Cordani said.
As the 2020 presidential campaign heats up among potential Democratic challengers to U.S. President Donald Trump, proposals by some candidates for Medicare-For-All programs that would eliminate private insurance has cast a pall of uncertainty over the sector.
Republican Senator Charles Grassley and Democrat Ron Wyden are also pushing legislation that aims to cut $100 billion in costs to government healthcare programs.
Cordani said Cigna is engaged in Washington policy discussions and that it backs aspects of that bill, such as preventing patients from receiving surprising medical bills.
Cigna earned $4.19 per share excluding items for the quarter, beating Wall Street estimates of $3.74, according to Refinitiv IBES.
Cigna now expects 2019 adjusted income of $16.60 to $16.90 per share, up from its prior view of $16.25 to $16.65.
Adjusted revenue from the health services unit, which now includes Express Scripts pharmacy benefits, rose to $23.54 billion from $1.11 billion last year.
However, Cigna said earnings were lower than comparable results from Express Scripts’ second quarter in 2018.
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