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Thursday, November 7, 2019

Teva up 4% premarket as turnaround advances, guidance raised

Teva Pharmaceutical Industries (NYSE:TEVAQ3 results:
Revenues: $4,264M (-5.9%).
Key product sales: Copaxone: $397M (-33.9%); Generics: $2,224B (-1.8%).
Net loss: ($314M) (-15.0%); non-GAAP net income: $637M (-8.2%); loss/share: ($0.29) (-7.4%); non-GAAP EPS: $0.58 (-14.7%).
Cash flow ops: $325M (-22.8%).
2019 guidance: Revenues: $17.2B – 17.4B from $17.0B – 17.4B; operating income: $4.0B – 4.2B from $3.8B – 4.2B; EBITDA: $4.5B – 4.8B from $4.4B – 4.8B; EPS: $2.30 – 2.50 from $2.20 – 2.50; free cash flow: $1.7B – 2.0B from $1.6B – 2.0B.
Eli Kalif appointed EVP and Chief Financial Officer effective December 22. He joins the firm from Flex Ltd where he was SVP Finance Global Operations, Components & Services.
Shares up 4% premarket on increased volume.

Earnings before Thursday’s open

ABC,  CAH,  CLVS,  NHI,  PCRXTEVA,  XRAYZTS

China set to ban vaping in public

A week after banning online sales of e-cigarettes, China outlined plans to prohibit vaping in public places to stem a “distinct increase” in activity among teenagers.
The stance would put China squarely with countries that have outlawed e-cigarettes outright, including India, Brazil and Singapore.
Already the world’s largest tobacco market, China’s e-cig market size rose from $451M in 2016 to $718M in 2018, according to estimates from L.E.K. Consulting.
Related stocks: Altria (NYSE:MO), Philip Morris (NYSE:PM), British American Tobacco (NYSE:BTI), Vector Group (NYSE:VGR), Imperial Brands (OTCQX:IMBBY) and privately-owned Juul (JUUL).

Restricting flavored tobacco could curb youth use

Policies that restrict flavored tobacco access can reduce teen use in as little as six months, a study in Massachusetts suggests.
Researchers compared two towns 30 miles apart and found that after one community passed a restrictive policy in 2016, flavored tobacco availability and use dropped the next year. There was little change in the other community, according to the results in the American Journal of Preventive Medicine.
“Given recent nationwide increases in youth tobacco use, largely driven by youth e-cigarette use, and the recent emergence of lung disease linked to e-cigarette use and vaping, it is critically important to implement and evaluate strategies to curb youth use,” said lead study author Melody Kingsley of the Massachusetts Department of Public Health in Boston.
Public health experts are trying to find the best tactics to slow youth use of all types of tobacco products, including bans on flavors, which tend to appeal to kids.
“The majority of youth who use tobacco begin with flavored products, which are available in thousands of flavors with youth appeal,” Kingsley told Reuters Health by email. “To date, a few studies have found that flavored tobacco restriction policies reduce sales and availability of flavored tobacco, but to our knowledge, no prior evidence exists on the short-term impact.”
The two towns in the study were Lowell, where a such a policy took effect in October 2016, and Malden, a town without a policy. The two communities have similar demographics, retailer characteristics and point-of-sale tobacco policies.
The researchers analyzed the inventories of tobacco stores and surveyed more than 500 high school students in both places. About six months later, they surveyed students again and measured inventories of flavored cigars, cigarillos, hookah, smokeless tobacco and e-cigarettes.
The researchers found that availability of flavored tobacco products plummeted in Lowell, from 77% of retailers to 7%. No changes occurred in Malden.

Among teen current- and ever-users of tobacco products, use of both flavored and non-flavored tobacco decreased in Lowell – by 5.7% for flavored tobacco and 6.2% for non-flavored tobacco – while it increased slightly in Malden.
“Even though the flavored tobacco restriction did not directly impact availability of non-flavored tobacco, these findings may be due in part to changes in social norms around use of all tobacco products,” Kingsley said. “It is encouraging to see that these changes can happen very quickly after policy implementation.”
Her team is interested in the long-term impact of these policies, including the age when teens start using tobacco. Some Massachusetts towns have also started to include menthol in their list of banned products, since the marketing of menthol-flavored tobacco has historically targeted people of color, low-income communities and LGBTQ individuals, she said.
“We expect that flavored tobacco restrictions that include menthol will have an even greater impact on youth tobacco use,” she said.
Researchers also want to know other factors that may influence policy, such as enforcement. Retail compliance in this case was high, and Massachusetts is known for strict tobacco enforcement and education efforts, said Melissa Harrell of the University of Texas School of Public Health in Austin, who wasn’t involved in the study.

“Some of the results are a bit ‘perplexing’ to me,” she told Reuters Health by email. “Lowell consistently showed reductions in tobacco use across almost every measure.”
These may not be due to the ban alone, particularly in such a short period, Harrell noted. Other efforts around the same time, such as news coverage or education programs at the schools, could have influenced the changes, she said, which is an important area for future research.
SOURCE: bit.ly/2BZYuHA American Journal of Preventive Medicine, online October 24, 2019.

ObsEva IVF nolasiban drug flops in key European trial

Swiss-listed drugmaker ObsEva said on Thursday it is abandoning the current program for its drug prospect nolasiban after the agent aimed at boosting pregnancy following in-vitro fertilization (IVF) failed a late-stage study in Europe.
Nolasiban did not meet the primary endpoint of an increase in ongoing pregnancy at 10 weeks, with 39.1% of women who got the placebo experiencing an ongoing pregnancy, compared with 40.5% of women who got nolasiban, the company said in a statement.
This proposed use of nolasiban, an oral oxytocin receptor antagonist licensed from Merck KGaA to help women getting IVF therapy, had been a central part of ObsEva’s plans. The trial failure leaves the company with drug candidates for endometriosis and potentially dangerous pre-term labor.


“We are extremely disappointed with these unexpected results, not in the least for the millions of women hoping to have a baby through IVF,” said Ernest Loumaye, a gynaecologist and former Serono drug developer who founded ObsEva.
“We have decided to discontinue the current nolasiban IVF program and will explore potential repositioning of the product candidate.”
ObsEva added a share listing in Switzerland last year, in addition to trading on the Nasdaq in the United States starting in 2017. The shares are down 36% this year.

Teva Pharmaceutical Q3 2019 Earnings Preview

Teva Pharmaceutical (NYSE:TEVA) is scheduled to announce Q3 earnings results on Thursday, November 7th, before market open.
The consensus EPS Estimate is $0.59 (-13.2% Y/Y) and the consensus Revenue Estimate is $4.23B (-6.6% Y/Y).
Over the last 2 years, TEVA has beaten EPS estimates 75% of the time and has beaten revenue estimates 50% of the time.
Over the last 3 months, EPS estimates have seen 10 upward revisions and 5 downward. Revenue estimates have seen 6 upward revisions and 9 downward.

Wednesday, November 6, 2019

Humana expects 17% bump in Medicare Advantage enrollment in 2019

Humana beat earnings estimates for the third quarter of 2019 thanks in part to growth in its Medicare Advantage business, generating $16.2 billion in revenue.
The insurer, which released its third-quarter results Monday, said the earnings growth was fueled due to a massive boost in Medicare Advantage membership. As a result, Humana has increased its 2019 earnings per share guidance to $17.75 on an adjusted basis, representing 22% growth this year.
“We are seeing a number of positive outcomes as a result of our discipline and focus in these areas including improvements in quality as reflected in our strong Star scores and CMS program audit results, and the experience of our members, with increased net promoter scores,” said Humana President and CEO Bruce Broussard.
Humana is expected to increase its full-year individual Medicare Advantage membership by 530,000 members in 2019, a 17% bump. The company added that 92% of its Medicare Advantage members are enrolled in a 4-star or higher contract for 2020, including 1.3 million customers in a 4.5-star contract.
Humana’s $16.2 billion in revenue is a slight increase from $14 billion in the third quarter of 2018. Humana reported that it generated $8.8 billion in pre-tax income, a slight decline from $9 billion in the third quarter of 2018. Revenues for Humana’s government business that includes Medicare Advantage and the Affordable Care Act was $14 billion in the third quarter, up from $12 billion in the 2018 third quarter.
However, the company’s revenue for its commercial and specialty segment segment that includes employer group insurance and specialty insurance benefits was slightly down. The insurer earned $1.88 billion in the third quarter of 2019 compared to $1.89 billion in the third quarter of 2018.
Broussard told analysts during an investor call that the insurer’s group business “is not something to be proud of.” He added that the insurer is working to improve that in the short term.
Humana is also “always in discussions” on how to expand its partnership with Walmart, which has a tie-in for a cheap Medicare Part D plan, said Broussard. But Broussard said the retail giant, which has been making more overtures into healthcare, is very focused on commercial and associate healthcare as opposed to Humana’s narrow focus on senior care.
“We are a little more narrow in our approach,” he said.
Broussard told analysts during an investor call that a potential headwind for 2020 could be the resumption of the Affordable Care Act’s health insurance tax, which has been delayed in 2019. While there is bipartisan support to either delay or repeal the tax, so far no moves have been made in Congress, and that has the industry worried.
“I think the industry is wrestling with how does it get through the legislative process,” Broussard said. “All the confusion in Washington right now it is hard to predict how this will get going through.”