What’s ahead for Centene: Wells Fargo

Centene (CNC +12.4%) is riding high after Joe Biden’s performance on Super Tuesday sets him up as the betting favorite to take on Donald Trump in the fall.

Wells Fargo is looking beyond the political drama to weigh in on a couple of other developments to watch with Centene. First, WF warns that a rate cut in New York could cut into Centene’s CNC earnings by $150M. “The rate cut would be retroactive to January 1 and about half of the $200 million is tied to CNC’s quality bonus, as the state is proposing ending the quality bonus program. While not yet finalized, CNC has already started to identify offsets ($50 million identified thus far in corporate) and develop initiatives to mitigate the impact,” updates the firm.

Wells also has its eyes on the coronavirus outbreak in the U.S. The analysts team says that while the potential impact from COVID-19 on Centene remains uncertain, it reminds that a large portion of CNC’s membership (~94%) is likely young enough to be considered in the lower risk categories or COVID-19.

Wells Fargo keeps an Outperform rating on Centene after factoring in the latest developments.

https://seekingalpha.com/news/3548670-wells-fargo-stays-positive-on-centene

Ocular Therapeutix up 31% on Dextenza ramp, encouraging data on eye implant

Ocular Therapeutix (OCUL +30.7%) jumps on almost an 8x surge in volume in reaction to preliminary Q4 results, Q1 guidance and interim data from a Phase 1 clinical trial evaluating eye implant OTX-TKI in patients with wet age-related macular degeneration.

Gross product revenue in Q4 was $2.3M (+172% sequentially), including $1.6M in Dextenza (dexamethasone ophthalmic implant) sales (+433% sequentially).

Q1 guidance calls for Dextenza sales of $2.4M – 2.6M, a bit conservative considering the 50% increase in Key Account Managers in November 2019.

Preliminary data from the early-stage study showed a favorable safety profile and a decreases in intraretinal and/or subretinal fluid in some participants who received the higher dose.

https://seekingalpha.com/news/3548608-ocular-therapeutix-up-31-on-dextenza-ramp-encouraging-data-on-eye-implant

First coronavirus case at EU council before ministers’ emergency meetings

A first case of coronavirus has been detected among staff at the Council of the European Union, a spokesman said on Wednesday, as ministers of the bloc’s 27 member states were to hold emergency meetings there.
The spokesman of the Council, which hosts ministerial meetings and EU summits and has a staff of 3,000, said the person, from the information security unit, was infected in Belgium.
EU home affairs ministers will gather in the Council building in Brussels later on Wednesday for an extraordinary meeting on the migration crisis at borders with Turkey.
On Friday, EU health ministers are expected to hold emergency talks in the same building on the response to the coronavirus outbreak.
The spokesman said these meetings would still go ahead, as there were no health risks for attendees. “There should be no disruption to the work of our institutions,” he said, adding that was in line with World Health Organization (WHO) protocols.
Earlier on Wednesday, another EU body, the European Defense Agency (EDA), reported a case of coronavirus among its staff.
The official had recently traveled to northern Italy.

An EU official said the two infected individuals had met in recent days, without giving further details.
“The staff member tested positive and is currently at home in self-isolation since symptoms appeared on Saturday evening. The individual has reported very light symptoms and not returned to the Agency since,” EDA said in a statement.
https://www.reuters.com/article/us-healthcare-coronavirus-eu/first-coronavirus-case-at-eu-council-before-ministers-emergency-meetings-idUSKBN20R1ZW

Italy readies draconian new measures to try to contain coronavirus

Italy prepared new emergency measures on Wednesday to try to slow the spread of coronavirus in Europe’s worst hit country, including the possible closure of all schools, universities, cinemas, theaters and most public events.

Seventy-nine people had died of the new coronavirus in Italy as of Tuesday, with more than 2,500 confirmed cases since the outbreak surfaced 13 days ago.
A draft decree seen by Reuters spelled out the draconian steps, ordering “the suspension of events of any nature… that entail the concentration of people and do not allow for a safety distance of at least one meter (yard) to be respected.”
The decree orders the closure of cinemas and theaters, and tells Italians not to shake hands or hug each other.
A government source said schools and universities will also be closed nationwide from Thursday, though this was not in the decree seen by Reuters, and the education minister said the decision had not yet been finalised.
The measures are expected to be formally announced by Prime Minister Giuseppe Conte after a meeting with regional governors later on Wednesday.
Only schools and universities in the northern regions most heavily affected by the epidemic have been closed so far. The extension of the shutdown will last at least until mid-March, the government source said.
In another sign of alarm, the sports minister said the government was likely to order all top flight Serie A soccer matches be played behind closed doors until the outbreak eases.
So far, games have been canceled in the northern regions but gone ahead over the rest of the country.
The virus outbreak remains centered on the wealthy and populous region of Lombardy around Milan and the neighboring regions of Veneto and Emilia Romagna, but cases are spreading around the whole of the Italian peninsula and Sicily.

ROME, SICILY CASES

On Wednesday, Rome’s Spallanzani infections diseases hospital said it had 20 coronavirus patients, while others were being treated at home in and around Italy’s capital and largest city.

The southern island of Sicily reported 18 cases.
The daily nationwide update will be provided by the Civil Protection Agency at around 1700 GMT.
Emilia Romagna’s regional government said on Wednesday two of its members had tested positive and Industry Minister Stefano Patuanelli said he was in self-imposed isolation after coming into contact with a patient, though he himself had tested negative.
The outbreak has heavily disrupted daily life in the north, with cinemas and museums closed in some regions and many events canceled including fashion shows and trade fairs.
The national health institute has instructed Italians to wash their hands frequently and avoid crowded places.
On Wednesday, the government issued a directive instructing public sector managers to reorganize offices to enable staff to work from home.
Italy’s chronically weak economic growth looks sure to suffer, with the tourist sector taking a huge hit from a wave of cancellations by holidaymakers.

Industry lobby Confindustria said the country was in recession, forecasting a fall in gross domestic product in both the first and second quarters of this year.
Confturismo, the tourist industry’s confederation, said on Wednesday the sector was “on its knees.”
It forecast a drop of some 32 million in the number of Italian and foreign tourists in March-to-May, with a loss to the industry of some 7.4 billion euros ($8.23 billion).
https://www.reuters.com/article/us-health-coronavirus-italy/italy-readies-draconian-new-measures-to-try-to-contain-coronavirus-idUSKBN20R23R

Labcorp, Quest Diagnostics must “step up” amid coronavirus outbreak: Gottlieb

Laboratory Corp of America Holding (LH.N) and Quest Diagnostics Inc (DGX.N) should conduct tests for coronavirus in the country, former Food & Drug Administration commissioner Scott Gottlieb tweeted bit.ly/2PMXwWn on Wednesday.
Gottlieb, who is part of Pfizer Inc’s (PFE.N) board, said high complexity labs that perform national testing have the same ability to validate tests as academic and hospital labs that are stepping up to increase testing capacity.
“LabCorp, Quest, others; need to get in the game.”
U.S. Food and Drug Administration Commissioner Stephen Hahn told Congress on Tuesday that testing kits should be available by the end of the week that would give labs the capacity to perform about 1 million coronavirus tests.
In addition to tests distributed by the U.S. Centers for Disease Control and Prevention (CDC) to public health labs, tests are being made by commercial test maker Integrated DNA Technologies, an FDA spokeswoman told Reuters.
The FDA is working with other commercial and academic laboratories to provide even more testing capacity, spokeswoman Stephanie Caccomo said.
Labcorp and Quest Diagnostics did not immediately respond to a request for comment.

The latest data lists 108 confirmed and presumed cases and nine deaths in the United States so far from the outbreak.
Last month, Labcorp said it had started developing its own test for the coronavirus and had engaged with U.S. health agency to make the test available to commercial labs.
https://www.reuters.com/article/us-health-coronavirus-usa-labs/former-fda-chief-tells-labcorp-quest-diagnostics-to-step-up-amid-coronavirus-outbreak-idUSKBN20R2AR

New York reports more cases of new coronavirus, state now has six

The number of people ill with the new coronavirus has risen to six in New York state, Governor Andrew Cuomo said on Wednesday.

New York’s Yeshiva University said one of its students had tested positive for COVID-19, and it was canceling all classes on Wednesday at one of its four New York City campuses as a “precautionary step” while it worked with authorities on how to best prepare and keep its students safe.
On Tuesday, officials said a man in his 50s who lives in a New York City suburb and works at a Manhattan law firm tested positive for the virus, the second identified case in the state. Health authorities said one of his children was a student at Yeshiva.

The man has severe pneumonia and is hospitalized, officials said. The patient had not traveled to countries hardest hit in the coronavirus outbreak, which began in China in December and is now present in nearly 80 countries and territories, killing more than 3,000 people.
Of the six cases of people with coronavirus in New York, only one is hospitalized, Cuomo said at a news conference.
The four new cases include three family members of the hospitalized man, New York Mayor Bill De Blasio said in a statement. The fourth was a neighbor, according to media reports.
“There are going to be many, many people who test positive. By definition, the more you test, the more people you will find who test positive,” Cuomo said.
New York wants to get the state’s capacity for testing for the virus to up to 1,000 a day, he said.
“The people who we are most concerned about, who are most vulnerable are senior citizens, people with immune comprised situations. What we’re worried about: nursing home setting, senior care setting. That’s what we’ve seen in other places and that’s where the situation is most problematic.”
At least one school in the Bronx neighborhood of New York City closed on Tuesday. The SAR Academy and SAR High School remained closed on Wednesday, but online classes were taking place, according to a man with a child at the school.

A synagogue in New Rochelle, New York, where the family of the hospitalized man lives said on Tuesday it was halting “all services immediately and for the foreseeable future.”
The latest data from the U.S. Centers for Disease Control and Prevention (CDC) listed 108 confirmed and presumed cases in the United States. That tally consists of 60 reported by public health authorities in 12 states plus 48 among people repatriated from abroad, most of them from an outbreak aboard the Diamond Princess cruise liner in Japan.
Nine people have died in the Seattle area, health officials said. Washington state in the Pacific Northwest has the largest concentration of coronavirus cases detected to date in the United States with 27 people infected as of Tuesday.
https://www.reuters.com/article/us-health-coronavirus-usa/new-york-reports-more-cases-of-new-coronavirus-state-now-has-six-idUSKBN20R28H

No U.S. airline bailouts needed over coronavirus-hit demand: business group

The head of the U.S. Chamber of Commerce said on Wednesday that the government will not need to bail out U.S. airlines in the wake of sagging travel demand due to concerns over the coronavirus.
“We don’t need any bailouts here,” U.S. Chamber Chief Executive Tom Donohue said at a news conference with travel leaders aimed at reassuring Americans to keep traveling. “Bottom line is we’re going to run just like business as usual – with a little higher heartbeat and get it done.”
Roger Dow, who heads the U.S. Travel Association, told the same news conference he considers a bailout unnecessary, but suggested the government could take steps to boost demand for travel.
Travel industry officials said the government could reinstate some tax incentives to encourage business travel and spend additional funds to promote U.S. travel destinations.
The chief executives of American Airlines (AAL.O), United Airlines (UAL.O), Southwest Airlines Co (LUV.N) and other major airlines are meeting at the White House with Vice President Mike Pence on Wednesday to discuss the coronavirus outbreak and the business outlook for the industry. Many businesses have restricted employee travel and numerous business meetings and conferences have been canceled in recent weeks.

Since the virus surfaced in China late last year, it has continued to spread in South Korea, Japan, Europe, Iran and the United States, and several countries reported their first confirmed cases, taking the total to some 80 nations hit with the flu-like illness that can lead to pneumonia.
The U.S. Federal Reserve cut interest rates on Tuesday in an emergency move to try to prevent a global recession and the World Bank announced $12 billion to help countries fight the coronavirus, which has taken a heavy toll on air travel, tourism and other industries, threatening global economic growth prospects.
https://www.reuters.com/article/us-health-coronavirus-usa-airlines/no-u-s-airline-bailouts-needed-over-coronavirus-hit-demand-u-s-business-group-says-idUSKBN20R2HF?il=0