|Healthcare review: BioReference Laboratories, Orexigen, Durata Therapeutics, CVS Caremark, Echo Therapeutics|
|By Staff and Wire Reports|
|Wednesday, 27 November 2013 15:49|
BioReference Laboratories ($BRLI) plunges after providing Q4 and FY13 guidance. "Despite continued strong volume growth, the Company believes there is an ongoing recalibration of reimbursement for the industry, which has resulted in substantial downward pressure from many payers regarding reimbursement," the company says, adding that it has "had to negotiate contract modifications to reimbursement rates, conditions of payment and / or eligibility with dozens of health plans representing a substantial numbers of lives nationwide."Q4 patient volume seen at +15% Y/Y. Q4 revenue per patient for non-genetic test seen -4% versus Q3.Q4 outlook: $0.40/share on revenue of $192M.FY outlook: $1.65/share.
JPMorgan maintains an Overweight rating and $12 price target on Orexigen ($OREX) following the company's positive Contrave announcement earlier in the week. In a note dated November 25th, analyst Cory Kasimov commented, "While details are expectedly sparse at this point, the press release notes that the interim analysis 'clearly achieved' its goal in ruling out excessive CV risk associated with the product. With an imminent NDA resubmission anticipated, we believe Contrave is well on its way to being approved in the US by mid 2014 and potentially in Europe later that year. In our opinion, [this] development should finally trigger a substantial narrowing of the still meaningful valuation gap that exists between OREX and the other two pure play obesity companies, Arena ($ARNA +0.6%) and Vivus ($VVUS -0.4%)."
Durata Therapeutics ($DRTX) rallies on more than twice its 10-day average volume. The FDA has accepted the Dalvance NDA for priority review. Action date is May 26 of next year. The company is looking for an ABSSSI indication based on data from DISCOVER 1 & 2.
CVS Caremark ($CVS) beefs up its specialty pharmacy offerings, agreeing to buy specialty infusion services and enteral nutrition business Coram, LLC from Apria Healthcare for about $2.1B.Coram is expected to generate about $1.4B in revenue in the first year following the deal's close (expected in Q1), but to have a negligible impact on CVS' overall 2014 results. The purchase is expected to add $0.03-$0.05 to EPS in 2015.
Echo Therapeutics ($ECTE) is trading down significantly in early action on the heels of Tuesday's ~70% rally. Noble Financial has downgraded the shares to Hold from Buy, while maintaining a $5 price target. Analyst Nathan Cali commented that recent movement in the shares warranted the call. The analyst is waiting for further color on the advancement of Symphony in the U.S. and EU. Cali notes that he needs clarity on the risk of whether the device proposes errors from concomitant drug interaction with the firm's sensor [as] three subjects in the trial were excluded from the results due to concomitant interference with the device.