The Zacks Analyst Blog Highlights:Roche, Aetna, WellCare Health Plans,
Coventry Health Care and Humana
CHICAGO, Jan. 25, 2013
CHICAGO, Jan. 25, 2013 /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 Roche (OTC:RHHBY), Aetna Inc.
(NYSE:AET), WellCare Health Plans, Inc. (NYSE:WCG), Coventry Health Care,
Inc., (NYSE:CVH) and Humana Inc. (NYSE:HUM).
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from the Pros newsletter: http://at.zacks.com/?id=5513
Here are highlights from Thursday's Analyst Blog:
Label Expansion for Roche's Avastin
The US Food and Drug Administration (FDA) recently approved Roche's
(OTC:RHHBY) Avastin (bevacizumab) in combination with fluoropyrimidine-based
irinotecan or oxaliplatin chemotherapy for treating patients suffering from
metastatic colorectal cancer (mCRC).
Patients suffering from mCRC and initially treated with Avastin along with an
irinotecan or oxaliplatin containing chemotherapy may now continue to receive
Avastin plus a different irinotecan or oxaliplatin containing chemotherapy if
the cancer worsens (second-line treatment).
We note that the FDA's approval was based on encouraging results from a phase
III study (ML18147). Results from the study showed that patients continuing
with an Avastin-based regimen, even after the worsening of their cancer,
survived longer than those who underwent chemotherapy alone. The risk of death
for patients who received Avastin plus standard chemotherapy as both the
first- and second-line treatment of mCRC, was 19% lower in comparison to
patients receiving chemotherapy alone.
Notably, this is Roche's third approval for Avastin as a treatment of mCRC.
The drug is already approved by the FDA for treating patients suffering from
mCRC in combination with intravenous 5FU-based chemotherapy. Roche has also
gained approval for Avastin for treating patients whose cancer worsened after
Aetna Sheds Medicare Unit
U.S. health insurer Aetna Inc. (NYSE:AET) announced divestment of its medicare
subsidiary, Missouri Care, Inc. to WellCare Health Plans, Inc. (NYSE:WCG) for
an undisclosed amount.
Missouri Care has been operating in Missouri for more than 15 years and serves
more than 100,000 members. The sell-off is seen as being related to Aetna's
Coventry Health Care, Inc.
)acquisition due to be completed in the middle of the year.
Upon acquisition Aetna will operate Coventry's Missouri Medicaid plan called
Health Care USA. If Aetna had continued to operate Missouri Care, the
combined population served by both the units would cross the permissible
limits granted by the state's Medicaid contracts. Thus, this step had been
taken by Aetna to comply with the state's rules which limit the number of
members served by an insurer.
The deal is a net positive for Aetna since in exchange of foregoing 100,000,
members served by Missouri Care, Aetna will gain access to 250,000 members
served by Health Care USA.
On the other hand, WellCare will gain Missouri Care's extensive provider
network of more than 50 hospitals and 9,500 physicians.
WellCare already has an active presence in Missouri serving 3,000 Medicare
Advantage members and 13,000 Medicare Prescription Drug Plan members.
Moreover, for smooth transition of the acquisition Missouri Care's CEO Pamela
Johnson and employees at the Missouri Care business are set to join WellCare.
Another insurer Humana Inc. (NYSE:HUM) also sells Medicaid plans in Missouri.
Aetna is looking forward to completing the $7.3 billion Coventry acquisition
successfully. The transaction holds compelling strategic benefits for Aetna
and will provide it with direct access to two of the most exciting business
lines: Government programs and Commercial insured business.
We expect to get more color on the transaction during fourth quarter earnings
scheduled to release on Jan. 31, 2013. The Zacks Consensus Estimate for the
fourth quarter earnings is 96 cents per share, a penny lower than earnings of
97 cents reported in the year-ago quarter.
Aetna currently retains a Zacks Rank #3 (Hold).
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