Wed, Sep. 2, 1:29 PM
- Forbes Contributor Bruce Japsen reports that the American Hospital Association (AHA) is urging the U.S. Justice Department to closely scrutinize Aetna's (AET +1.1%) proposed $37B takeout of Humana (HUM +0.4%). The hospital lobby says the deal would give Aetna too much power to raise prices of Medicare Advantage plans, the privately run portion of the Medicare program that has seen spectacular growth over the past few years.
- Humana is the second largest insurer of Medicare Advantage while Aetna is the fourth largest. Almost one third of Medicare beneficiaries (~17M Americans) participate in Medicare Advantage.
- AHA SVP and General Counsel Melinda Hatton says, "The deal will not just eliminate current competition between Humana and Aetna, it will eliminate future competition between them. It may create monopsony and enable the merged firm to exploit small, relatively powerless providers. Second, the merger may create downstream market power which could offset the desirable effects of countervailing power and premiums to consumers. Finally, the merger might create countervailing power but the merged firm might exercise it in anti-competitive ways, harming consumers or small providers."
- It's doubtful, though, that the AHA's posturing will scupper the deal.
Tue, Aug. 25, 5:35 PM
- investors should stick with "market darlings" - the 25 stocks that had performed the best during the six months before a market pullback - according to the analyst team at RBC.
- The firm notes that although many recent winners are leading the market lower, the extent of the underperformance is just 1%; it also says investing in the group following sharp market pullbacks is a winning strategy over the ensuing week, month and six months.
- RBC's 25 market darlings are AET, ALTR, AMZN, AIZ, CVC, CI, CAG, EA, EQIX, EXPE, GME, GOOGL, HAS, HCA, MNST, NFLX, NKE, PRGO, REGN, SBUX, TSO, TWC, TSS, UA, UHS
Tue, Aug. 4, 10:32 AM
- Aetna (AET +0.65%) Q2 results: Revenues: $15,240.9M (+5.0%); Health care costs: $10,496.3M (+1.8%); Current & future benefits: $539.2M (+2.6%); SG&A: $2,801.8M (+7.7%); Net Income: $731.8M (+33.3%); EPS: $2.08 (+36.8%).
- Membership (000s): Medical: Commercial: 19,798 (+1.5%); Medicare Advantage: 1,233 (+10.8%); Medicare Supplement: 507 (+16.8%); Medicaid: 2,137 (+4.0%); Total Medical Membership: 23,675 (+2.5%); Total Dental Membership: 14,623 (+1.3%); Pharmacy Benefit Management: Commercial: 10,645 (-1.8%); Medicare Prescription Drug Plan (stand-alone): 1,433 (-10.9%); Medicare Advantage Prescription Drug Plan: 854 (+16.2%); Medicaid: 2,439 (+15.9%); Total Pharmacy Benefit Management Services: 15,371 (+0.5%).
- 2015 Guidance: Operating Earnings Per Share: atleast $7.40 from $7.20 - 7.40.
Tue, Aug. 4, 6:02 AM
Mon, Aug. 3, 5:30 PM
- ABMD, ADM, AET, AFSI, ALE, ALLT, ALR, AME, ANIP, ARCC, BLMN, BPI, BZH, CAS, CBT, CHD, CHTR, CIE, COH, CRCM, CRTO, CVS, DWRE, EIGI, ELOS, EMR, ETR, EXH, EXLP, EXPD, FRM, FUN, GEO, GLDD, GLT, H, HAR, HCN, HCP, HEP, HNT, HW, HYH, IIVI, INCY, K, KLIC, LPX, LRN, LXP, MDC, MGM, MLM, MNK, MNTA, MOS, MPW, NAO, NCLH, NGLS, NRG, [[NTi]], NWN, NYLD, ODP, OZM, PH, REGN, RHP, RRD, SABR, SCOR, SGNT, SMG, SNI, SRE, STE, STWD, TDG, TGH, TICC, TIME, UNT, USAK, VMC, VSH, VTG, WLK, WNR, WPC, WRES, ZTS
Thu, Jul. 30, 1:37 PM
- Unsurprisingly, Express Scripts (ESRX -0.6%) takes a dim view of the proposed price of the cholesterol-lowering PCSK9 inhibitor Praluent (alirocumab). Last Friday, co-developers Sanofi (SNY +1.6%) and Regeneron Pharmaceuticals (REGN +0.4%) announced that the wholesale acquisition cost (WAC) of the once-every-two-week injection will be $40 per day or $14,600 per year. This is several orders of magnitude above the cost of statins, which average $2 - 3 per day.
- WAC is the average price that wholesalers and distributors pay for the drug. Patients will, of course, pay quite a bit more.
- Pharmacy benefit managers, still feeling the pinch from Gilead's (GILD +1.8%) HCV meds Sovaldi and Harvoni, will likely ratchet up their opposition as Praluent's U.S. launch commences.
- Related tickers: (AET +0.9%)(CTRX)(CNC +0.9%)(CI -0.7%)(HUM)(MRK +0.3%)(OCR +0.4%)(UNH -0.7%)(CVS -0.5%)
Fri, Jul. 24, 6:15 AM
- Anthem (NYSE:ANTM) has agreed to buy Cigna (NYSE:CI) in a deal valued at $54.2B, wrapping up a year of negotiations and creating the largest health insurer in the U.S.
- Cigna shareholders will get $103.40 per share in cash and 0.5152 Anthem shares.
- The deal comes three weeks after Aetna (NYSE:AET) struck a deal to buy Humana (NYSE:HUM) for $37B and is part of an industry-wide consolidation following the roll-out of Obamacare.
Fri, Jul. 10, 2:45 AM
- Aetna (NYSE:AET) is lining up a $16.2B bridge loan to fund its acquisition of Humana (NYSE:HUM) - the first multibillion M&A loan of 2H15 and the second-largest acquisition bridge loan so far this year.
- On July 3, Aetna said it would buy Humana for $37B in the insurance industry's largest-ever acquisition.
- In the past two weeks, Anthem has also offered to buy Cigna to create the largest insurer in the country, toppling UnitedHealth.
Wed, Jul. 8, 6:19 AM| Wed, Jul. 8, 6:19 AM | Comment!
Tue, Jul. 7, 10:50 AM
- Edwards Lifesciences (EW -0.8%) upgraded to Overweight from Equal Weight with a $168 (17% upside) price target (up from $135) by Morgan Stanley.
- HealthSouth (HLS -0.7%) upgraded to Market Outperform from Market Perform with a price target of $54 (15% upside) by JMP Securities.
- AstraZeneca (AZN -0.6%) upgraded to Buy from Hold with an $81 (25% upside) price target by Berenberg.
- Humana downgraded to Hold from Buy by Argus Research.
- Intuitive Surgical (ISRG -1.1%) downgraded to Underweight from Equal Weight by Morgan Stanley. Price target lowered to $500 (6% upside) from $560.
- Aegerion Pharmaceuticals (AEGR -0.5%) downgraded to Sell from Neutral by Guggenheim Securities.
- Centene (CNC -3.3%) downgraded to Equal Weight from Overweight by Barclays. Price target lowered to $81 (20% upside) from $88.
- Raptor Pharmaceutical (RPTP -1.8%) downgraded to Underperform from Perform with an $8 (40% downside risk) price target by Oppenheimer.
- Aetna (AET -3.5%) downgraded to Market Perform from Outperform by FBR Capital Markets. Price target lowered to $120 (6% upside) from $130.
- Baxter International (BAX -2.3%) downgraded to Neutral from Buy by Bank of America. Price target lowered to $40 (8% upside) from $78.
Tue, Jul. 7, 3:56 AM
- Aetna (NYSE:AET) shares tumbled over 6% yesterday, after Humana (NYSE:HUM) (which recently agreed to be acquired by the former for $37B) prompted investor concerns by lowering its forecasts for the year.
- Stating inpatient hospital admissions were not performing in line with what it had expected, the company slashed its anticipated 2015 operating profits by more than 8%.
- "If you take the downgrade of their earnings and roll that through, that makes what Aetna paid pretty expensive," said Tareo Capital's Joel Emery.
- Previously: Humana and Aetna to host conference call this am to discuss merger; Humana lowers 2015 EPS guidance (Jul. 06 2015)
Mon, Jul. 6, 12:21 PM
- Aetna's (AET -5.7%) conference call this morning about its takeover of Humana (HUM +2.7%) apparently failed to excite investors. Shares are down on 4x higher volume.
- The market may perceive some antitrust risk in the deal. Humana is trading at $192 despite Aetna's bid of $230.
- Previously: Confirmed: Aetna to acquire Humana for $37B (July 3)
Mon, Jul. 6, 9:10 AM
Mon, Jul. 6, 8:07 AM
- In light of its merger with Aetna (NYSE:AET) Humana (NYSE:HUM) updates its Q2 and full-year 2015 guidance. For Q2, it expects non-GAAP EPS of $1.60 - 1.65 compared to its previous expectation of GAAP EPS of $2.78 - 2.83. The reduction is due to the elimination of its anticipated pretax gain from the sale of its Concentra business.
- For 2015, non-GAAP EPS is now projected to be $7.75 versus the previous range of $8.50 - 9.00.
- It target for 2016 Medicare pre-tax margin of 4.5 - 5% remains unchanged.
- The companies will host a conference call this morning at 8:30 am ET to discuss the merger.
Fri, Jul. 3, 2:51 AM
- After weeks of frenzied health insurer merger talks, Aetna (NYSE:AET) says it will buy Humana (NYSE:HUM) for about $37B, or about $230 per share.
- The deal will see Humana shareholders receive $125 in cash and 0.8375 Aetna shares for each share held, representing a premium of 23% from July 2's close.
- Following the merger, Aetna shareholders will own about 74% of the combined company.
- Previously: WSJ: Aetna very close to Humana buyout deal (Jul. 02 2015)
Thu, Jul. 2, 8:49 PM
- Aetna (AET -2.7%) is again close to a deal to buy Humana (HUM -2.9%) and it could be sealed as soon as tonight and announced this week, The Wall Street Journal reports.
- The deal -- another huge one in a big year for M&A -- would place Aetna near the top of Medicare business amid continuing industry consolidation.
- Humana shares have declined over the past two weeks, but are still up 5% from the end of May when it discussed selling itself. Aetna shares are up 8.9% over that time period.
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Aetna Inc. is a health care benefit company, which offers traditional and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioral health, group life and disability plans.
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