Biotech stocks typically rule the roost on our weekly list of the three humongous health-care stocks. Not this week, though. Here are the top health-care winners over the past few days -- sans biotech.
O Canada
Endo Health Solutions (ENDP) looked to the north for an acquisition. And its shares headed north as well, jumping 37% for the week.
The specialty health-care solutions provider announced plans to buy Canadian firm Paladin Labs for $1.6 billion. Paladin is a specialty pharmaceuticals company with products that treat several indications, including ADHD, pain, urology, and allergy. Endo's offer represented a 20% premium to the Paladin's closing price on Nov. 4 on the Toronto Stock Exchange.
Endo's deal pleased several analysts. Jason Gerberry with Leerink Swann gave the buyout a thumbs-up. So did Ken Cacciatore at Cowen, which upgraded Endo from underperform to market perform. Third-quarter earnings didn't hurt, either. Endo beat analysts' expectations on revenue and earnings.
Surprise performance
Institutional pharmacy services provider PharMerica (PMC) has had quite an up-and-down year in 2013. It's now clearly on an upswing after announcing third quarter results. Shares soared 31% for the week.
PharMerica's third-quarter performance caught analysts by surprise. The company reported adjusted earnings of $0.49 per share, nearly 50% higher than the $0.33 per share expected by Wall Street. Revenue came in at $436.8 million. The average analysts' estimate for the top line was $401.7 million.
Adding icing to the cake, PharMerica raised its full-year earnings guidance for 2013 to a range between $1.71 and $1.76 per share. That's a nice bump from the previous guidance of $1.55 to $1.60 per share.
Growing the family
Almost Family (AFAM) is growing its family. The home health services provider announced on Tuesday that it is buying SunCrest HealthCare for $75.5 million. Shares climbed 27% for the week.
The acquisition of SunCrest is the largest ever for Almost Family. It adds another $150 million annually to Almost Family's revenue and expands the company's reach to 240 branches across 14 states. The combined company should generate yearly revenue close to $500 million.
Along with the buyout news, Almost Family reported its third-quarter results. While the company continues to face challenges in the home health market, it grew revenue by nearly 6% year-over-year. Earnings from continuing operations declined from $0.45 per share in the third quarter of 2012 to $0.24 per share in the last quarter. However, $0.05 per share of that drop was due to transaction-related costs.
Honorable mention
Normally, a stock that gained over 20% in the week would have made our top three. That wasn't the case this week because of the exceptionally strong performance by Endo, PharMerica, and Almost Family. However, Keryx Biopharmaceuticals (KERX) deserves an honorable mention. Keryx's shares jumped 22% this week.
The story for Keryx focused on great news from a mid-stage study of Zerenex in treating patients with non-dialysis dependent chronic kidney disease, or NDD-CKD, with elevated serum phosphorus and iron deficiency anemia. NDD-CKD represents a significantly larger market than the dialysis CKD indication for which Zerenex is currently seeking approval. I suspect that Keryx, while not quite making the top three list this week, could be the biggest winner out of all of these stocks over the long run.
