5 Can't-Miss Health-Care Events This Week

Earnings are once again going to steal the spotlight this week, with four of the five can't-miss stories in the health-care sector revolving around earnings reports. There is, however, one FDA ruling scheduled for the end of the week that could be of interest, so let's start with that.

Dynavax Technologies (NASDAQ: DVAX  ) is expected to face the FDA firing squad on or before Feb. 24 for its hepatitis-B vaccine, Hepislav. Dynavax shares were massacred shortly after the FDA panel released its findings on Hepislav, not because of the data -- panel members voted 13-1 in favor of recommending the drug based on efficacy -- but because of an 8-5 vote, with one abstention, that there wasn't enough safety data available to determine that the drug was safe, given a few cases where Hepislav caused rare autoimmune diseases. Although the FDA is under no obligation to side with the panel, it often serves as a good indicator of what to expect. I'd be shocked with an FDA approval next week, but I do expect that, at some point over the next 12-18 months, Dynavax will gain approval for Hepislav.

On the earnings front, we have a fantastic mix of biotech, medical devices, nutritional products, and a health-benefits solution provider this week.

My personal No. 1 biotech to watch in 2013, Exelixis (NASDAQ: EXEL  ) , is scheduled to report fourth-quarter results on Thursday, and it probably won't include any major surprises. What I'll be looking for, however, is the company's updated 2013 sales forecast now that Cometriq, its metastatic medullary thyroid cancer drug, is available in the United States. I'd keep your eye on Exelixis' cash balance, but I don't think it'll dip all too much. Cometriq's sales forecast could be the factor that causes this company to move up or down in a big way.

Medical-device giant Medtronic (NYSE: MDT  ) is slated to report its third-quarter results on Tuesday, with the expectation that revenue will advance 3% to $4.03 billion and EPS will jump to $0.91 from $0.84 in the year-ago period. For me and investors, this will give us a better look -- especially with regard to guidance -- at how the medical-device excise tax is affecting Medtronic's bottom line. Another key point will be how, if at all, St. Jude Medical's lead safety issues with regard to defibrillators are affecting Medtronic's cardiovascular device line. Medtronic is never a report to miss, so keep your eye on this one.

Highly embattled nutritional-products supplier Herbalife (NYSE: HLF  ) is also slated to report its fourth-quarter results on Tuesday. Wall Street's expectations are for 19% sales growth to $1.05 billion and for EPS to expand to $1.03 from $0.86 in the previous year. Normally these results wouldn't take center stage, but with activist investors Bill Ackman, who has a gigantic short position, and Carl Icahn, who has disclosed a very sizable long position, involved, the implications of this report are enormous. Herbalife's business has always concerned me from a customer loyalty aspect, and I'm avoiding the stock at the moment, but that won't keep me from thoroughly examining its fourth-quarter results and 2013 forecast.

Last, but certainly not least, health-benefits provider Express Scripts (NASDAQ: ESRX  ) has said "no" to taking the day off on Monday and is expected to report its fourth-quarter results on that date. These results will include Express Scripts' figures since the resolution of its spat with Walgreen in September. Another key point worth watching is how the company is advancing with regard to synergies associated with its gigantic Medco Health Solutions purchase. A few months ago, the companies looked ahead of schedule with their integration but then appeared to take a step back in the third quarter, when low utilization rates and in-member attrition sacked revenue growth. This synergy will be the key to driving growth going forward and is a point worth keying in on.

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  • Report this Comment On February 18, 2013, at 3:05 AM, jrainspe wrote:

    Another case of basing an opinion on only the barest of facts and history of action by the FDA.

    The FDA literally designed the second of the Phase 3 trials. Do you really think they want to admit to the world that they did not design the test well enough to properly measure the 'safety' of a drug at that level in the approval process?

    Also, one influential member of that committee is on the payroll of a company with a competing drug. Since he couldn't attack the obvious efficacy of the drug, he attacked the only factor left. It was unfortunate that there was a safety incident in the earlier trials that was later proven to be unrelated to Heplisav, but that was enough ammunition to run a smear campaign as is obvious from reading the minutes of the meeting.

  • Report this Comment On February 19, 2013, at 9:11 AM, billcatedit wrote:

    Your statement ' given a few cases where Hepislav caused rare autoimmune diseases' is inaccurate. Briefing documents posted by the FDA did not show a link between the TLR-9 agonist and an autoimmune response.

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