Regulatory waiting period for Bristol’s Inhibitex acquisition expires
NEW YORK — The regulatory waiting period standing between Bristol-Myers Squibb and its acquisition of drug maker Inhibitex has expired, giving Bristol the green light to buy the company.
Bristol said Friday that the expiration of the waiting period, mandated by the Hart-Scott-Rodino Antitrust Improvement Act of 1976, would allow it to acquire Inhibitex for $26 per share.
The New York-based drug maker announced its plan to buy Alpharetta, Ga.-based Inhibitex for $2.5 billion early last month. Inhibitex develops drugs for treating hepatitis C, including INX-189, currently in phase-2 trials.
Express Scripts issue, a no-show flu season a drag on Walgreens’ comps
DEERFIELD, Ill. — The impact of the failed Express Scripts negotiations on Walgreens’ sales has been significant to date, as evidenced by Walgreens’ January sales release issued Friday.
Walgreens reported a sales decline of 2.3% for the month of January to $5.8 billion — the first month operating outside of the Express Scripts pharmacy network. A flu season that has yet to materialize also has had a significant impact on comparable sales figures.
Sales in comparable stores were down 4.6%, falling below analyst consensus of down 2.6%.
Pharmacy sales were down 6%, while comparable pharmacy sales decreased 7.9%. Calendar day shifts positively impacted pharmacy sales in comparable stores by 1.3 percentage points. Comparable pharmacy sales were negatively impacted by 2.1 percentage points due to generic drug introductions in the last 12 months, by 2.4 percentage points due to lower incidence of cough, cold and flu and by 10.6 percentage points due to no longer being part of the Express Scripts network as of Jan. 1. Prescriptions filled at comparable stores decreased 8.6% in January.
"This [10.6] data point confirms our view that Walgreens, at least in the near-term, will only be able to retain [approximately] 15% of the Express Scripts business," noted Credit Suisse analyst Ed Kelly in a Friday morning note.
Pharmacy sales accounted for 63.6% of total Walgreens sales for the month.
January hasn’t been a good month for the prescription business overall. According to Credit Suisse research, industry volumes have decelerated in recent months and that trend continued in January, as volumes fell 4.2%. "We attribute most of the weakness to slower pharmacy traffic and normal price elasticity," Kelly wrote. The slower pharmacy traffic can be explained, in part, to the number of people who are not getting sick this year. Flu shots administered at Walgreens pharmacies and Take Care Health clinics season-to-date were 5.5 million versus 6.3 million last year. And sales of over-the-counter cough-cold products across the industry were down 2.7% for the 52 weeks ended Jan. 12, Kelly noted.
According to the Centers for Disease Control and Prevention, 1.4% of patient visits reported through the U.S. Outpatient Influenza-like Illness Surveillance Network were due to influenza-like illness through Jan. 21. This percentage is below the national baseline of 2.4%, the agency reported.
“We expected that January would be a very challenging month on a comparable prescription basis because of the impacts from not being part of the Express Scripts network as of Jan. 1 and the much milder cough, cold and flu season we have been experiencing,” stated Kermit Crawford, president of pharmacy, health and wellness services and solutions.
Walgreens adjusted its annualized prescriptions-filled projections for fiscal 2012 to be around the low end of its previously announced range of 97% to 99% of prescriptions filled versus fiscal 2011.
Also today, Walgreens reported the results of its January promotion of one-year memberships in its Prescription Savings Club. The promotion resulted in a record signup of more than 700,000 new memberships. The program offers savings on more than 8,000 brand name and all generic medications. For more than 400 generic medications, Walgreens offers a three-month supply for less than $1 a week.
“With January now behind us, we are moving forward with relationships with large and small employers, health systems, physician groups and other PBMs who value Walgreens ability to help lower overall health care costs," Crawford said. "As we expect these relationships to grow, and as we move past the impact from this year’s weak flu season, we anticipate an improvement in the coming months in the number of comparable prescriptions filled relative to January’s result.”
Total front-end sales increased 2.7% in January 2012, compared with the same month in 2011, while comparable-store front-end sales increased 1.6%, following a 0.6% increase in December. Customer traffic in comparable stores decreased 0.6% percent while basket size increased 2.2%.
FDA approves Merck diabetes drug
WHITEHOUSE STATION, N.J. — The Food and Drug Administration has approved a drug made by Merck for Type 2 diabetes, the drug maker said Thursday.
Merck announced the approval of Janumet XR (sitagliptin and metformin hydrochloride) extended-release tablets as a once-daily treatment for the disease.
"Janumet XR is a new treatment that adds once-daily convenience to the powerful efficacy of Janumet for patients with Type 2 diabetes," Merck VP diabetes and endocrinology Barry Goldstein said. "This is important because many patients with Type 2 diabetes require treatment with multiple drugs to maintain blood-sugar control, and Janumet XR is a new option to help more patients get to their glucose goals."