Numerous CEOs of major companies are off to Washington today to talk to President Obama and/or John Boehner about averting the fiscal cliff. Those meeting Obama include the leaders of Merck (MRK), Coca-Cola (KO) and Caterpillar (CAT), while those meeting Boehner include the CEOs of Honeywell (HON) and Aetna (AET). Company bosses have also been urging their staff to pressure Washington to reach a deal.
Aetna (AET +1.2%) releases a statement after Coventry Health Care (CVH +0.4%) stockholders voted overwhelmingly in favor of Aetna's proposed acquisition. AET CEO Mark Bertolini noted: “We continue to believe that Coventry will complement Aetna's strategy to expand our core insurance business, increase our presence in the fast-growing Government sector and expand our relationships with providers in local geographies.”
Weight loss drug makers get a lift today after Aetna (AET -0.6%) revises its criteria under which the insurer considers weight reduction medications as "medically necessary" for treatment of obesity. In a Clinical Policy Bulletin revision dated yesterday, AET identified certain medications that have been approved by the FDA for weight reduction which would be covered under its policy: Qsymia, marketed by VIVUS (VVUS +13.2%), Belviq from Arena Pharmaceuticals (ARNA +2.9%), Didrex from Pfizer (PFE +0.1%), Xenical from Roche (RHHBY +0.3) and GlaxoSmithKline's (GSK +0.2%) Alli. Orexigen (OREX +6.5%), although not named in the bulletin, is also higher on the news.
Coventry Health (CVH -0.1%) says it plans to hold a special shareholder meeting to consider and vote on proposal to adopt merging Jaguar Merger Subsidiary into Coventry with Coventry continuing as the surviving corporation. The meeting will be held in Nashville, Tennessee on November 21 at 10 am.
More on Aetna (AET) Q3: EPS benefits from heavy buybacks. Profit +1.8% to $499.2M. Earnings boosted by higher premiums, cost cuts and people continuing to avoid the doctor, with the percentage of premiums spent on medical care 80.7% vs 82.4% in Q2. Hits FY target for about 18.2M members, +149K from Q2. Ups FY operating EPS guidance to $5.10 from $5-$5.10 prior estimate and vs $5.08 consensus.
Around 12M people will buy $55B worth of health coverage in 2014 via the insurance exchanges being created as part of Obamacare, PWC predicts, adding that the figures could rise to 29M people and $205B respectively by 2021. Most of the money will be new, although some will come from other parts of the market, such as from people whose employers had paid for coverage until now.
Three pension funds that are investors in Coventry Healthcare (CVH) have sued to block its $5.6B acquisitions by Aetna (AET). Among other things, the funds argue that Coventry's shareholders are receiving a premium of just 20%, far less than premiums in other similar deals, which are as much as 43%.
Dendreon (DNDN +3.8%) bucks a weak tape today after Aetna (AET -0.4%) indicated on its website that it would pay for additional prostate cancer patients to be treated with Provenge, saying it now considers it to be medically necessary for treatment.
Questcor Pharmaceuticals (QCOR +4.5%) continues to recover from Wednesday's dramatic drop of nearly 50%, as Roth Capital joins the chorus of analysts calling the reaction to the Aetna (AET) situation "overblown." QCOR's conference call yesterday "indicated that a highly-engaged and well-prepared reimbursement practice by QCOR has been successful and likely would continue as most cases are tightly sealed and more difficult for denial by insurers." the firm said in a note to clients.
: The letters in the parentheses are ticker symbols which are in THE TANER DATA (my Instablog) with their security names. yk
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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.