Wednesday's Top Health Care Stories: Aerie, Insys, and Owens & Minor

Here’s why you need to watch Aerie, Insys, and Owens & Minor this Wednesday morning.

Jun 25, 2014 at 9:09AM


Let's take a look at three stocks -- Aerie Pharmaceuticals (NASDAQ:AERI), Insys Therapeutics (NASDAQ:INSY), and Owens & Minor (NYSE:OMI) -- which could all loom large in health care headlines this Wednesday morning.

Aerie soars on positive Roclatan data
Shares of Aerie Pharmaceuticals are up 35% in pre-market trading this morning, after the company announced positive phase 2b trial results for its experimental glaucoma drug, Roclatan. Roclatan, a once-daily eyedrop, is a combination of Aerie's Rhopressa (a phase 3 triple-action glaucoma drug candidate) and latanoprost (a widely prescribed glaucoma drug).

Roclatan achieved its primary endpoint of statistically significant superiority over each of its components by the 29th day of the trial on a group of 297 patients. Mean diurnal intraocular pressures (a benchmark for glaucoma treatments) dropped 34% compared to the latanoprost cohort, and the efficacy of Roclatan topped latanoprost across each evaluated time point. Based on this positive data, Aerie intends to initiate a phase 3 trial immediately.

Aerie does not have any marketed products. The company has not issued peak sales estimates for Roclatan or Rhopressa yet, but analysts at Canaccord Genuity expect peak sales of $600 million for both drugs if approved.

Aerie went public last October for an IPO price of $10 per share. The stock has more than doubled since then.

Insys climbs on new orphan drug designation
Shares of Insys are up more than 5% in pre-market trading, after the FDA granted an orphan drug designation to pharmaceutical cannabidiol (CBD), a cannabis-based treatment for Lennox-Gastaut syndrome, a rare type of pediatric-onset epilepsy.

An orphan drug designation will grant CBD seven years of market exclusivity and a variety of financial benefits if approved. Insys expects to submit an Investigational New Drug Application (IND) for CBD in the second half of 2014.

Insys has two market-approved cannabinoid-based drugs -- Subsys (Fentanyl Sublingual Spray) for breakthrough cancer pain in opioid-tolerant patients, and generic Marinol for chemotherapy-induced nausea and vomiting. 96% of Insys' revenue of $99.3 million in 2013 came from Subsys sales.

However, investors should remember that shares of Insys crashed last month after being hit by a double whammy of weak earnings and fraud allegations. Prosecutors in Detroit charged Dr. Gavin Awerbuch -- who was responsible for 20.3% of all Subsys prescriptions to Medicare beneficiaries between 2009 to 2014 -- with intentionally over-prescribing the drug.

Despite that setback, shares of Insys are up more than 250% over the past year. Insys' closely watched peer in cannabis-based treatments, GW Pharmaceuticals, has climbed more than 900%.

Owens & Minor to buy Medical Action Industries
Owens & Minor just announced that it will acquire custom procedure tray producer Medical Action Industries (NASDAQ:MDCI) for $13.80 per share in cash. The deal values Medical Action Industries at $208 million including the assumption of debt, and is expected to close in the fourth quarter of the year. Shares of Owens & Minor are unchanged, but shares of Medical Action Industries have soared 94% on the news in pre-market trading.

Owens & Minor and Medical Action Industries already have a close working relationship, considering that nearly 45% of Medical Action's annual sales of $288 million are made to Owens & Minor.

Owens & Minor expects the acquisition to become accretive to non-GAAP earnings per share by 2015, and estimates annual pre-tax cost synergies of $10 million to $12 million by 2016. The overall impact to Owens & Minor's non-GAAP earnings in 2014 is not expected to be significant and mostly restricted to the fourth quarter of the year.

Leaked: This coming blockbuster will make every biotech jealous
The best biotech investors consistently reap gigantic profits by recognizing true potential earlier and more accurately than anyone else. Let me cut right to the chase. There is a product in development that will revolutionize not how we treat a common chronic illness, but potentially the entire health industry. Analysts are already licking their chops at the sales potential. In order to outsmart Wall Street and realize multi-bagger returns you will need The Motley Fool’s new free report on the dream-team responsible for this game-changing blockbuster. CLICK HERE NOW.


Leo Sun has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers