The Zacks Analyst Blog Highlights: Walgreen, Omnicare, Medivation, PharMerica and National Healthcare
CHICAGO, Oct. 5, 2012 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Walgreen Co. (NYSE:WAG), Omnicare Inc. (NYSE:OCR), Medivation (Nasdaq:MDVN), PharMerica Corporation (NYSE:PMC) and National Healthcare Corp. (AMEX:NHC).
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Here are highlights from Thursday's Analyst Blog:
Lower September Sales for Walgreen's
Drug retailer Walgreen Co. (NYSE:WAG) posted dismal sales results for the month of September 2012, recording a decline of 7.8% year over year to $5.48 billion.
Total front-end sales slipped 0.4%, while comparable store front-end sales were down 1.5%. Customer traffic in comparable stores fell 2.3% but basket size increased 0.8% year over year. Simultaneously, the number of prescriptions filled by patients reduced drastically.
Prescriptions filled at comparable stores of Walgreen decreased 10.3% [day-fall adjusted (DFA) 6.8%] for the month even with a 0.1 percentage point of positive impact due to higher incidence of 'flu in the month. Fewer 'flu shots in the month negatively impacted prescriptions filled by 0.4 percentage point. Additionally, one extra Saturday and Sunday in the month with one less Thursday and Friday, led to a negative impact of 3.5 percentage points on Walgreen's prescriptions filled.
Total sales in comparable stores decreased 11.1% in September. The decline was attributable to a decrease of 5.3 percentage points due to generic drug introductions during the last 12 months as well as the negative impact of 2.2 percentage points due to calendar day shifts. All these led to a 12.3% decline in Walgreen's total pharmacy sales which made up the lion's share (63.7%) of Walgreen's total sales in September.
Moreover, there was a 16.1% decline in comparable store pharmacy sales, 8.4 percentage points of which were due to the introduction of generic drugs in the last one year and a 3.5 percentage point impact from calendar day shifts. Flu shots administered at pharmacies and clinics season-to-date were 1.5 million down 16.7% year over year.
At the end of September, 2012, excluding the recent acquisition of USA Drug chain, Walgreen operated 8,400 locations in 50 states, the District of Columbia, Puerto Rico and Guam which includes 7,944 drugstores (167 more compared to the year-ago period). The company also operates infusion and respiratory service facilities, specialty pharmacies and mail service facilities.
Omnicare Inks Distribution Deal
Advanced Care Scripts (ACS), a part of Omnicare Inc.'s (NYSE:OCR) Specialty Care Group, has been recently included in the limited distribution network for Medivation (Nasdaq:MDVN) and Astellas Pharma's Xtandi (enzalutamide).
On August 31, 2012, the U.S. Food and Drug Administration (FDA) had approved Xtandi for the treatment of metastatic castration-resistant prostate cancer in patients who have earlier received chemotherapy.
The addition to the limited distribution agreement for Xtandi will enable ACS to provide access and reimbursement support to patients and physicians. ACS will also provide access to the drug to entitled patients who do not have insurance.
Omnicare's Specialty Care Group has witnessed solid growth with market share gains for specialty drugs. Revenues from the Specialty Care Group surged 25.7% year over year to $330.1 million in the most recent quarter. The Specialty Care Group continues to be the company's revenue driver. Extending into specialty-focused platforms and additional disease states such as oncology will allow Omnicare to accelerate growth for its Specialty Care Group in the years ahead.
Omnicare is a market leading provider of long-term care pharmacy services and health care environment for individuals directly and indirectly, through subsidiaries, across North America. It competes with PharMerica Corporation (NYSE:PMC) and National Healthcare Corp. (AMEX:NHC) in certain niche segments.
Omnicare currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. The company's performance in the most recent quarter negated external pricing pressure and reimbursement cuts. Omnicare has shown significant improvement in margins, attributable to new generics introductions and cost containment efforts.
Moreover, generic launches in the next few quarters present a major opportunity due to Omnicare's direct access to manufacturers and current greater exposure to the institutional pharmacy channel than in the past couple of years. However, the company continues to rely on Medicare and Medicaid programs for a major share of its revenues.
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