CVS Health Clears Low Earnings Bar, Leads S&P 500 On Return To Growth In '25

 CVS Health (CVS) topped fourth-quarter earnings estimates, but still saw profit slide 38% from a year ago. However, the pharmacy chain, which has a new CEO, offered a 2025 outlook that envisions a return to growth. Though the earnings outlook is below what analysts had penciled in, it was strong enough to make CVS stock the No. 1 performing S&P 500 name in Wednesday's early action.

"We have continued to see growth in key areas of our business, including the Pharmacy and Consumer Wellness segment, while we address the industrywide challenges that have impacted our Health Benefits segment," CEO David Joyner said in a statement.

Results: Adjusted earnings per share tumbled 44% to $1.19, but easily beat forecasts of 92 cents. Revenue rose 4.2% to $97.71 billion.

CVS said it completed a three-year store closure plan, but will further optimize its footprint in 2025.

Outlook: CVS Health expects adjusted EPS of $5.75 to $6 a share, up from $5.42 in 2024. The midpoint is just above the FactSet consensus $5.86. However, anther estimate aggregator had a $5.97 consensus.

CVS said that the low end of its EPS outlook would represent about 10% growth vs. 2024, after adjusting for an 18-cent gain related to reserves held for benefit payments.

Revenue should be "at least" $385.9 billion vs. $372.8 billion in 2024 and a FactSet consensus of $385.9 billion.

Political Uncertainty

In December, it seemed like CVS was near the center of a political storm, as Congress nearly advanced legislation to rein in pharmacy benefit managers (PBMs) including CVS Caremark. Bipartisan legislation was introduced to go much further, requiring PBMs divest their pharmacies.

For now, though, aggressive PBM reform may be on the back burner, while other areas of health care like Medicaid are on the hot seat for potential spending cuts.

Republicans are generally seen as supportive of Medicare Advantage, a focus of the CVS health benefits business. One of the outgoing Biden administration's last moves was to propose a bigger-than-expected rate increase for Medicare Advantage in 2026.

CVS Stock

CVS stock leapt 14.4% to 62.87 in early Wednesday stock market action. The move carried CVS past its 200-day moving average, with a clear break above its 10-month trend line.

https://www.investors.com/news/cvs-stock-cvs-health-earnings-q4-2025-outlook/

Staar China sales miss

 

• Net Sales: $313.9 million for fiscal 2024, a decline of 3% compared to $322.4 million in fiscal 2023.

• ICL Sales Outside China: $152 million, with growth of 17% in Q4 and 13% for fiscal 2024.

• ICL Sales in China: $161 million for fiscal 2024, down 13% year over year.

• Net Loss: $20.2 million for fiscal 2024 compared to net income of $21.3 million in fiscal 2023.

• Gross Margin: 76.3% for fiscal 2024, down 210 basis points.

• Cash Equivalents and Investments: $230.5 million at the end of fiscal 2024.

• Accounts Receivable: Approximately $78 million at December 27, 2024, expected to be fully collected in the first half of 2025.

• Adjusted EBITDA Loss: Expected to be approximately $30 million per quarter in the first half of 2025.

• Capital Expenditures: Expected to be approximately $15 million for fiscal 2025.

• .

Positive Points

• Staar Surgical Co (NASDAQ:STAA) reported strong growth in ICL sales outside of China, with a 17% increase in the fourth quarter and 13% for the full year 2024.

• The company achieved a 22% growth in ICL sales in the Americas during the fourth quarter, outpacing the overall refractive market decline.

• Staar Surgical Co (NASDAQ:STAA) saw a 9% growth in ICL sales in EMEA and a 20% growth in APAC (excluding China) in the fourth quarter.

• The company has a strong balance sheet with $230.5 million in cash equivalents and no debt, providing resilience during economic challenges.

• Staar Surgical Co (NASDAQ:STAA) continues to invest in commercial strategies and product pipeline, particularly in markets with potential for double-digit growth.

Negative Points

• The company faced significant challenges in China, with a 13% decline in ICL sales for the full year 2024 due to weak consumer confidence and economic conditions.

• A $27.5 million order to China was shipped but not recognized as revenue due to extended payment terms, impacting fiscal 2024 results.

• Staar Surgical Co (NASDAQ:STAA) anticipates minimal China ICL sales in the first half of 2025 due to elevated inventory levels.

• The company reported a net loss of $20.2 million in fiscal 2024, compared to a net income of $21.3 million in fiscal 2023.

• Gross margin decreased in the fourth quarter due to unrecognized revenue and costs related to manufacturing expansion and temporary facility idling.

Q & A Highlights

Q: Can you explain the significant decline in global units and the impact of pricing during the quarter? A: The decline is primarily due to the fall in China sales, which significantly impacted overall revenue and unit sales. (Patrick Williams, CFO)

Q: What are the assumptions behind the 2025 guidance, especially regarding the expected slowdown in refractive volumes? A: The guidance assumes a challenging year with a 5-10% decline in the Americas' refractive market, flat growth in EMEA and APAC excluding China, and a potential rebound in China in the second half, influenced by government stimulus. (Thomas Frinzi, CEO; Patrick Williams, CFO)

Q: How did the China inventory issues arise, and what measures are being taken to prevent future risks? A: Elevated inventory levels were identified as we exited 2024, leading to reduced shipments in the first half of 2025. The company is focusing on sell-through rather than sell-in to manage inventory levels effectively. (Patrick Williams, CFO)

Q: What is the impact of the new competitor, Ibright, in China, and how does it affect your guidance? A: Ibright's entry is not seen as a major factor in the distributor's actions. The competition validates the market opportunity, but STAAR's established position and relationships in China are expected to mitigate competitive impacts. (Thomas Frinzi, CEO)

Q: How are you addressing the challenges in China, and what is the outlook for the second half of 2025? A: The focus is on managing sell-through and reducing inventory levels. The outlook for the second half depends on consumer confidence and potential government stimulus, with expectations for a rebound in demand. (Thomas Frinzi, CEO; Patrick Williams, CFO)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

https://finance.yahoo.com/news/staar-surgical-co-staa-q4-071303461.html

AbbVie, Xilio to Develop Novel Tumor-Activated Immunotherapies

 

• Collaboration will combine AbbVie’s oncology expertise and Xilio’s proprietary tumor-activation technology to develop novel immunotherapies, including masked T-cell engagers
• Xilio to host investor conference call and webcast today at 8:30 am EST

Under the terms of the agreement, Xilio will receive $52.0 million in total upfront payments, including a $10.0M equity investment, and will be eligible to receive up to approximately $2.1 billion in total contingent payments for option-related fees and milestones plus tiered royalties.

Xilio Investor Conference Call Information

Xilio will host a conference call and webcast today at 8:30 am EST. Viewers can access the webcast by using this link. Listeners who require dial-in access should register here to receive a unique PIN and information to join the call. Listeners are encouraged to join at least 15 minutes prior to the scheduled start time. The webcast will also be accessible under “Events & Presentations” in the Investors & Media section of the Xilio Therapeutics website at https://ir.xiliotx.com. A replay of the webcast will be archived on the website for 30 days following the presentation.

https://www.globenewswire.com/news-release/2025/02/12/3024949/0/en/AbbVie-and-Xilio-Therapeutics-Announce-Collaboration-and-Option-Agreement-to-Develop-Novel-Tumor-Activated-Immunotherapies.html

Tivic Health Acquires Exclusive World Rights to Phase III TLR5 Agonist from Statera Biopharma

 Broad licensing agreement accelerates Tivic’s transformation into a diversified therapeutics company, adds late-stage immunotherapeutic to clinical pipeline. Potential for FDA approval within 24 months.

Under the agreement, Tivic will initially pay Statera $1,200,000 in equity consideration and $300,000 cash to Statera for the use of Entolimod to treat ARS. Tivic can, at its discretion, subsequently add one or more indications, as well as expand its license to include an Entolimod derivative, Entalasta, by exercising the exclusive options granted in the agreement. Tivic has no obligation to exercise such options on any specific timeline or at all; but should it do so, Tivic agrees to fund development of each such indication. Additional future payments will be royalty and milestone-driven, ensuring alignment with the clinical and commercial success of Entolimod and, after exercise of the option granted in the agreement, Entalasta.

Importantly, the structure of the agreement allows Tivic to strategically manage its investment while maximizing potential returns in line with shareholder interests. Select team members of Statera will join Tivic to establish Tivic’s biopharmaceutical capabilities and advance product candidates towards commercialization.

The transaction also includes exclusive rights and options for more than sixty patents and patents pending, associated know-how, and ownership of previously manufactured and tested materials.

Additional information about this news, including an informational PowerPoint presentation, will be available at: https://ir.tivichealth.com

Craft Capital Management LLC acted as the sole and exclusive investment banking firm in the transaction.

https://www.businesswire.com/news/home/20250212860402/en/

Springworks neurofibromatosis drug OKd

 – GOMEKLI is the first and only medicine approved for both adults and children with NF1-PN –

– Approval based on positive data from Phase 2b ReNeu trial, which showed GOMEKLI treatment resulted in robust ORR, deep and durable reductions in tumor volume, and a manageable safety profile –

– SpringWorks granted rare pediatric disease priority review voucher by the FDA –

https://www.globenewswire.com/news-release/2025/02/11/3024643/0/en/SpringWorks-Therapeutics-Announces-FDA-Approval-of-GOMEKLI-mirdametinib-for-the-Treatment-of-Adult-and-Pediatric-Patients-with-NF1-PN.html