Neurocrine Drifting, But The Total Package Is Still Appealing

Although Neurocrine Biosciences (NBIX) has a strong primary commercial asset in Ingrezza, a slower-building but still promising secondary asset partnered to AbbVie (ABBV) in Orlissa, and an improved pipeline, the reality is that the shares of biotechs in Neurocrine’s stage of life can flounder or drift for stretches of time. In the absence of new clinical data to get excited about, investors will instead fixate on short-term details or just get bored and move on, and I think that explains at least some of Neurocrine’s lackluster recent performance.

All in all, though, I still like this stock. I believe Ingrezza still has upside, and while Orlissa is taking longer to build than most investors would like, it’s still a good opportunity. Beyond that, opicapone may still be an underrated opportunity, and likewise with NBI-74788, and Neurocrine has some early-stage assets worth watching now, including its second VMAT-2 compound and its Voyager (VYGR) partnership.

Read more here:
Neurocrine Drifting, But The Total Package Is Still Appealing

The Motley Fool: Can Express Scripts Holding Co. Beat Expectations Again?

Pharmacy benefit management company, or PBM, Express Scripts (NASDAQ: ESRX  ) has done quite well for investors in the past, but Wall Street is less confident about the future. Analysts are skeptical that, with the large advances already made in the shift to generics, Express Scripts can leverage formulary design, producer discounts, mail delivery and other drivers to continue generating double-digit free cash flow growth.

That skepticism could work in investors' favor, though, as Express Scripts looks like one of the relatively few meaningfully undervalued large health care companies.

Read more here:
Can Express Scripts Holding Co. Beat Expectations Again?

Investopedia: Walgreen Hopes That It Can Buy Growth

Walgreen (NYSE:WAG) management cannot be faulted for being passive in response to the challenges it is facing in producing growth. With an arguably saturated U.S. market, ongoing challenges from the likes of Walmart (NYSE:WMT) and Target (NYSE:TGT), further penetration from mail-order pharmacies and its ongoing dispute with Express Scripts (Nasdaq:ESRX), the company had to do something. The question remains, though, whether paying up for KKR's British-based Alliance Boots is the long-term solution to what ails Walgreen.

Please follow this link for more:
http://stocks.investopedia.com/stock-analysis/2012/Walgreen-Hopes-That-It-Can-Buy-Growth-WAG-RAD-ESRX-CVS-TGT-WMT0625.aspx

Investopedia: What Is Walgreen's Next Trick?

Irrelevance is an intractable opponent. If your grandparents grew up in a major city, talk to them about what the neighborhoods used to look like. Chances are there were certain staples like a neighborhood butcher shop, a neighborhood bakery, a neighborhood dry goods store and a local bar (or three). A lot of this has frankly disappeared over the years, and Walgreen (NYSE:WAG) needs to be creative and aggressive if it is going to stay relevant in a landscape where the core drug business is increasingly moving out of drugstores. (For more on retail stores, read The 4 R's Of Investing In Retail.)

An Okay End to the Fiscal Year  
Walgreen's fiscal fourth quarter results were solid but a bit confusing, as a lower tax rate and share count did help boost reported earnings per share. Sales rose more than 6% on better than 4% comps, putting Walgreen ahead of other drugstore rivals CVS Caremark (NYSE:CVS) and Rite Aid (NYSE:RAD) in terms of sales momentum. Drug sales were up about a percentage point less than overall sales, but the comp sales were similar, and prescription drugs are still about two-thirds of the sales base.


Click the link for the full piece:
http://stocks.investopedia.com/stock-analysis/2011/What-Is-Walgreens-Next-Trick-WAG-CVS-RAD-ESRX-MHS-WMT-TGT0929.aspx

Investopedia: Teva And Mylan Show Some Value Remains in Generics

Generic drug company stocks have been all over the map this year, with companies like Teva (Nasdaq:TEVA) struggling, companies like Watson (NYSE:WPI), and the likes of Mylan (NYSE:MYL) and Impax (Nasdaq:IPXL) falling somewhere in between. While the sector is still broadly benefiting from popular branded drugs going off patent, pressures from large buyers like AmerisourceBergen (NYSE:ABC) and Cardinal Health (NYSE:CAH) and declining patient-doctor visits are making for a more challenging operating environment. 

Mylan - Good Here, Not So Good Over There  
Mylan reported 15% revenue growth (10% in constant currency), with North American sales rising over 27%. Asia-Pacific sales also grew by 17%, but Europe was flat as reported and down double-digits on a constant currency basis due in part to government-mandated price cuts in many European markets. 


Continue to the full story via this link:
http://stocks.investopedia.com/stock-analysis/2011/Teva-And-Mylan-Show-Some-Value-Remains-In-Generics-TEVA-MYL-WPI-IPXL-HSP-ESRX-MHS0804.aspx

Investopedia: MHS-ESRX Merger Will Force Intersting Choice In Washington

When Express Scripts (Nasdaq:ESRX) announced its intention to acquire Medco Health Solutions (NYSE:MHS) last week, it lit the fuse on what is likely to become one of the most far-reaching (if not most interesting) developments in health care in some time. At a bare minimum, this deal is going to force the current U.S. administration to make some very interesting choices when it comes to market competition and health care costs. 

The Deal  
To offer a quick review, Express Scripts is proposing to acquire its larger rival (in terms of prescription share) for total consideration of $71.36 at the time of the announcement. This consideration will be broken up between $28.80 in cash and 0.81 shares of Express Scripts. Assuming the deal goes through, it will deliver Medco shareholders a 28% premium to its pre-deal price and Medco shareholders will hold about 41% of the new company. 


To read more, click below:
MHS-ESRX Merger Will Force Interesting Choice In Washington (ESRX, MHS, ABC, CAH, TEVA, UNH, WAG, CVS)

Investopedia: Will Patience Pay For Walgreen Shareholders?

There is a lot about Walgreen (NYSE:WAG) that would seem to make it a no-brainer for long-term investors. It is the second-largest drug retailer in the country, and people always need drugs, right? Moreover, a Walgreen is within a short drive or walk for a rather large percentage of the country so there is a definite convenience aspect as well. On top of that, the company has generated fairly solid returns on capital and would seem to be transitioning to a point where its capital base is not so demanding on cash flow. 

A Second Quarter Bedeviled By Expectations  
If an investor did not know the expectations around Walgreen going into the earnings report, the 7% drop in the stock on Tuesday would not make all that much sense. After all, revenue did rise almost 9% this quarter and that beat the average estimate. Within those numbers, total comps rose more than 4%, with pharmacy comps up just slightly less than that. 


The problems, such as they are, came in the income statement. Gross margin actually declined a bit (five basis points), and that is a much-watched detail with this company. So, backsliding here is not great news. Operating income was a bit better though, as the company controlled the SG&A line and operating income grew a bit more than 11%. The company also picked up a penny from share buybacks, though, and that is how the company met the EPS target for the quarter. (For more, see The Bottom Line On Margins.)

To continue, please click this link:
http://stocks.investopedia.com/stock-analysis/2011/Will-Patience-Pay-For-Walgreen-Shareholders-WAG-CVS-WMT-TGT-ESRX-MHS-CHSI0323.aspx

Investopedia: Medco Looks To Stay In The Pink

Medco Health Solutions (NYSE:MHS) is part of the oddball contingent of the healthcare spectrum. While many investors reflexively think of healthcare as a sector with high margins and proprietary products, the pharmacy benefit management space is the opposite - a low-margin business that relies on contracts and scale rather than innovative new products. Nevertheless, Medco has carved out a sizable market presence and delivered solid returns on capital, even if some investors are still quite worried about upcoming contract expirations.

The Quarter That Was
Medco delivered a solid end to the year. Revenue climbed more than 11% this quarter, surpassing even the high end of the analyst range of estimates. Revenue was boosted by 21% growth in the specialty pharmacy business and solid prescription volume growth of 7.4%.

Looking at some additional details, the company's mail-order value grew by 7.3%, with generic mail-orders up over 15%. With this quarter, generic penetration exceeded 72%, while mail penetration more or less stayed put around 34%.

Please continue on:
http://stocks.investopedia.com/stock-analysis/2011/Medco-Looks-To-Stay-In-The-Pink-MHS-UNH-WLP-ESRX-CVS-WMT-TEVA0224.aspx

A No-Brainer For CVS

On the last day of the year, CVS Caremark (NYSE: CVS) announced that they are effectively buying the Medicare Part D business of Universal American Financial (NYSE: UAM) for $1.25 billion in cash. With this deal, CVS will more than double the size of its Medicare Part D business - from 1.2 million covered lives to 3.1 million covered lives.

In actual fact, the deal is a little more complicated that prior paragraph suggests. CVS is actually buying all of UAM, for roughly $12.80 to $13.00 per share in cash, but also simultaneously giving each UAM shareholder a share in the "NewCo" that will be created to continue UAM's current Medicare Advantage and other insurance businesses. So, at the end of it all, each UAM shareholder walks away with about $13 a share and shares in a UAM that will no longer have this Part D business.

For CVS this looks like a no-brainer type of deal. CVS is paying less than $660 per covered life. To put that in scale, the average senior citizen pays about $2,800 for prescription drugs each year and a year's prescription for a common drug like Pfizer's (NYSE: PFE) Lipitor or Merck's (NYSE: MRK) Fosamax is about $900.

Now, it is absolutely true that pharmacy benefits companies like CVS, Express Scripts (Nasdaq: ESRX), and MedcoHealth (NYSE: MHS) make only tiny margins on their drug businesses, but there are significant advantages to scale in the business. Moreover, Medicare Part D isn't exactly like "regular" PBM operations, so CVS is no doubt looking at this deal as a way of expanding a more protected and potentially more lucrative niche at a time when the standard PBM business is not doing as well.

This looks like a reasonable deal for UAM, though I think the surviving company is going to have a hard time getting much attention or much analyst/institutional investor love. In point of fact, I would not be surprised to see another company (say, maybe, Coventry (NYSE: CVH)?) come in and acquire what's left of this business after the CVS transaction. That leverage and scale I mentioned goes both ways, and I think UAM's Medicare Advantage business is not going to be all that appealing on its own - at least not in the form of a publicly-traded company.