Three key milestones show Rite Aid’s continued progress
Rite Aid reported its second quarter 2014 earnings Thursday, posting its fourth-consecutive profitable quarter, its passing the 1,000 mark in the number of stores it has converted to the Wellness format and more than 930,000 members of Wellness65+, the latest extension to its Wellness+ loyalty care program, aimed at seniors.
In other words, the country’s third-largest drug store chain has once again shown it’s on a roll. In light of the latest earnings, the company raised its guidance for fiscal year 2014, expecting a profit of between $182 million and $268 million. The chain’s performance has pushed its stock price to a one-year high; it closed at $4.83 on the New York Stock Exchange Monday, up by 3.43%.
While those factors that are within Rite Aid’s control — such as its highly successful loyalty card and store conversion programs — continue to hold promise and benefit the company’s earnings, there are still headwinds resulting from factors outside its control. Among these, the company cited reimbursement rate pressure, pharmaceutical cost increases and lower benefit from new generics. In a conference call with financial analysts Thursday morning, chairman and CEO John Standley said generic drug costs had been higher and would likely put pressure on guidance over the next two quarters. In his presentation at the National Association of Chain Drug Stores’ Total Store Expo last month, IMS Health VP industry relations Doug Long cited rising generics costs as a concern as well.
Nevertheless, it’s a testament to Rite Aid’s resilience as a company that it still expects to make a profit at the end of the year. Last month, even Jim Cramer of CNBC’s "Mad Money" proclaimed, "The group is strong. Rite Aid is back!" Of course, DSN has been saying that for a while.
FDA to take ‘tailored policy’ to mobile medical app regulation
SILVER SPRING, Md. — The Food and Drug Administration will not enforce regulatory requirements for most mobile medical apps because they "post minimal risk to consumers," the agency said Monday.
The FDA announced the issuance of guidance on the apps, saying it would adopt a "tailored policy" toward regulation, focusing its regulatory oversight on those apps that present greater risk if they do not work as intended.
"Some mobile apps carry minimal risks to consumers or patients, but others can carry significant risks if they do not operate correctly," FDA Center for Devices and Radiological Health director Jeffrey Shuren said. "The FDA’s tailored policy protects patients while encouraging innovation."
As examples, the FDA cited apps that can allow doctors to diagnose patients with potentially life-threatening conditions outside traditional healthcare settings, as well as helping consumers manage health and wellness, including some that can diagnose abnormal heart rhythms, allow smartphones to function as mobile ultrasound devices or function as the "central command" for a diabetic patient’s glucose meter.
As such, the FDA said it would focus on apps that are intended for use as accessories for regulated medical devices or that transform smartphones and other mobile devices into medical devices. Mobile apps subject to FDA review would undergo the same regulatory processes as other medical devices.
"We have worked hard to strike the right balance, reviewing only the mobile apps that have the potential to harm consumers if they do not function properly," Shuren said. "Our mobile medical app policy provides app developers with the clarity needed to support the continued development of these important products."
FDA approves Perrigo angina pectoris drug
ALLEGAN, Mich. — The Food and Drug Administration has approved a drug made by Perrigo Co. for treating heart disease, the company said Monday.
The FDA approved Perrigo’s nitroglycerin lingual spray in the 400-mcg-per-spray strength. The drug is used to relieve attacks of or prevent angina pectoris due to coronary artery disease.
The drug is a generic version of Arbor Pharmaceuticals’ Nitrolingual Pumpspray, which has sales of about $65 million, according to Perrigo. As the first company to win approval for the generic version, Perrigo has 180 days in which to compete exclusively against Arbor.