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Express Scripts (NASDAQ:ESRX)
Q4 2017 Earnings Conference Call
Feb. 28, 2018 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Welcome to Express Scripts' Fourth-Quarter and Full-Year 2017 Conference Call. All lines have been placed in a listen-only mode until the question-and-answer session. Today's call is being recorded. If anyone has any objections, you may disconnect.

I'd now like to turn over the call to Ben Bier, vice president, investor relations. Sir, you may begin.

Ben Bier -- Vice President Investor Relations

Thank you and good morning. With me today is Tim Wentworth, president and CEO, and Jim Havel, CFO. Before we begin, I need to read the following safe harbor statement. Statements or comments made on this conference call may be forward-looking statements and may include financial projections or other statements of the company's plans, objectives, expectations, or intentions.

These matters involve certain risks and uncertainties. The company's actual results may differ materially from those projected or suggested in any forward-looking statement due to a variety of factors which are discussed in detail in the company's most recent Form 10-K filed with the Securities and Exchange Commission. We do not undertake any obligation to update or otherwise release publicly any revisions to our forward-looking statements. For clarity purposes, all financial numbers except where indicated that we talk about today will be on an adjusted basis and are attributable to Express Scripts' excluding non-controlling interest representing the share allocated to members of our consolidated affiliates.

Furthermore, we are providing underlying performance of the company's core business excluding the contributions from Coventry and Catamaran, both of which were acquired and are transitioning off the company's book of business, as well as Anthem, to which we refer together as the transitioning clients. This presentation will be posted on our website and includes an appendix with footnotes and the reconciliations of non-GAAP measures to the most directly comparable GAAP measures. The press release is posted on the Investor Relations section of our website at express-scripts.com.At this point, I will turn the call over to Tim.

Tim Wentworth -- Chief Executive Officer and President

Thank you, Ben and good morning, everyone. As I reflect on 2017, I am proud of what we accomplished. First, we refocused on defining and expanding our core. In addition, we leveraged our tremendous assets to deliver strong financial results, a solid operational performance, and innovation for patients and clients to keep them ahead of the curve.

In 2017, we delivered double-digit EPS growth, we achieved a record low drug trend of 1.5%, we realized strong growth in our Accredo Specialty Pharmacy, we entered new into markets by launching new services and expanding our strategic platform with the acquisition of eviCore, the nation's leading medical-benefit manager. We created and launched innovative programs focused on improving health outcomes and lowering costs. We maintained our disciplined approach to cash deployment and cost management, and we began 2018 with a flawless [Inaudible] 1-1 implementation.Now, before we get started with our brief slide presentation, I want to address a few topics that are front and center. First, there is intense interest right now from patients, payers, and policymakers about how to lower drug costs and maintain access.

With the range of policy proposals released in the president's proposed 2019 budget, this need is top of mind for all, and we are contributing to the discussion. In fact, many of the proposals which appeared in the budget were viable cost-saving ideas we advocated for in our policy report released early this month, and this report can be found on our website and was released along with our 2017 drug-trend results. These results clearly demonstrate the power of our innovative solutions in achieving our mission of making medicine more affordable for patients, clients, and our country's taxpayers. We are proud of our long-standing advocacy for solutions that will help control prescription-drug spending but we believe there is more that can and should be done.

Second, I am pleased to announce additional investments in our employees and communities, made possible in part by the passage of tax reform. Tax reform savings generated an opportunity to reward our most valuable asset, our employees, who work hard every day to serve our patients and clients as well as to build strong relationships in our communities and create long-term shareholder value. Non-executive employees will participate in a one-time bonus pool of approximately $20 million, with each eligible employee receiving a bonus ranging from $500 to $2,000 based on tenure, with an average bonus of $1,200. Additionally, approximately $30 million will be donated to benefit two specific initiatives.

First, our employees' children, through creation of an education fund for them which would assist with post-secondary education including vocational education, community colleges, and universities. Second, we will directly invest in our communities through a significant contribution to our charitable foundation. Looking ahead, I am also pleased to reaffirm our 2018 adjusted earnings-per-share, diluted share guidance, of $9.27 to $9.47, which represents growth of 32%, at the midpoint of our guidance.Now, I'll highlight the findings of our 2017 drug-trend report, provide my perspective on why Express Script is the best choice for patients and clients and how we are poised for continued growth in 2019 and beyond. Then I will turn it over to Jim to discuss our financial performance.

In 2017, despite marketplace pressures, our solutions helped employers achieved a record low drug trend of 1.5%. This drug plan consists of the year-over-year change in drug spending net of rebates and includes changes in unit price, drug mix, and utilization. This compares favorably to the 2017 consumer price index of 2.1% and our 2016 drug trend of 3.8%. There are three other achievements of which we are extremely proud for 2017.

First, some might surmise that our low trend means patients are paying more out of pocket, but that's not the case for most of our patients in an employer-provided benefit. In 2017, the average member out-of-pocket cost, which includes deductible and co-pay, for a 30-day prescription was $11.24, a $0.12 increase versus 2016. Second, spending on specialty drugs, which accounted for 41% of total spending, was up 11% in 2017, the lowest increase we've seen. And this spend was driven by 8% higher utilization and 3% change in the average unit cost, driven lower to our safeguard Rx value-base suite of solutions such as our inflammatory-conditions care value program.

And let me point out, our overall 1.5% trend includes spend for specialty drugs. Finally, 44% of our clients spent less per person on prescription drugs in 2017 than in 2016. Let me say that again. These clients had negative drug trend.

Our low 2017 drug trend is a direct result of our clients' willingness to work closely with us to develop and implement solutions that reduce costs while preserving access and enhancing quality. While I'm proud of these findings, we also know that more work needs to be done and we continue working on finding new solutions. In fact, at Express Scripts, we will never sit still or assume our work is done. A core part of our heritage and ability to pursue sustainable results is driven by our relentless focus on innovation to improve care, costs, and access for patients.

Over the years we have developed numerous innovations. These include building the world's largest and most efficient e-commerce home delivery pharmacy, with over 100 million annual prescriptions last year; the industry's only specialist pharmacy model, our Therapeutic Resource Centers, which drive deep clinical specialization across chronic and complex disease states; our Accredo rare disease pharmacy, which is the acknowledged leader in caring for the most complex diseases, achieving patient and provider NPS scores of above 70; and, finally, launching the industry's most innovative approach to value-based contracting, an approach that not only broke the back of the price of costly hepatitis C treatments while ensuring patient access and superior clinical outcomes but also in the case of inflammatory conditions and multiple sclerosis demonstrated that payers can get their money back when drugs don't work. More recently, we are leading the charge on federal approval of biosimilars and are the first PBM to deliver an advanced opioid management program with proven results, developed in conjunction with our clients. We created a new model for groundbreaking gene therapies and are now the innovative leader in helping health plans improve clinical outcomes on their medical spend through our industry-leading benefits manager business, eviCore.

These are just a few of the highlights which our innovative approach has brought to the market and looking forward, we see meaningful opportunities to continue to innovate on a lightweight capital frame in a way that produces meaningful and measurable results for the system. It is this approach, powered by over 27,000 committed employees, which drives our momentum as we move into 2018.Speaking of 2018, we ended the year with strong market momentum and we continue to have success in retaining key clients. We create trusted client relationships by delivering exceptional care to patients while controlling costs, as our drug trend results clearly show. A large part of our success is built on our clients' trust that we will focus 100% of our time on delivering clinical and financial outcomes for their employees and their families.

As a result, we are pleased to be able to provide retention rate guidance for 2019 of 96% to 98%. Interest in our solutions continues into the 2018 selling season and we are seeing strong demand for many of them, including Safeguard Rx, our 90-day supply for chronic medications, exclusive Accredo Specialty Pharmacy, and specifically our advanced opioid solutions. To each of these programs as well as many others, we deliver superior care to patients at an affordable cost. Our newest offering, as I mentioned before, our multiple sclerosis care value program, launched on January 1, 2018.

This program extends our differentiated payment model by shielding payers from costs associated with discontinued therapy and we have already enrolled over 22 million lives. It's the most successful launch to date. In fact, most of our specialty Safeguard solutions have an enrollment of over 20 million lives and we continue to enhance these solutions as we dynamically optimize the care and value we bring to the market. These programs are also driving new sales momentum.

While we do not discuss specific client wins, we are encouraged by our results and the conversations we are having with new clients as well as prospects. As we add up these factors, we are positioned to deliver claims and earnings growth in 2019.With that, I will now turn the call over to Jim to discuss our strong financial performance.

James Havel -- Executive Vice President and Chief Financial Officer

Thanks, Tim, and good morning, everyone. As you saw on our earnings release, we reported strong fourth-quarter and full-year consolidated and core results for 2017. We reported consolidated adjusted fourth-quarter earnings per diluted share of $2.16, which represents a growth of 15% over the fourth quarter of 2016. The increase is driven by 5% growth in adjusted EBITDA, tax planning initiatives, and management of our capital structure.

For the fourth quarter of 2017, our consolidated GAAP earnings per diluted share grew 75%, largely due to the reduction in our deferred-tax liability by $1.4 billion, resulting from federal tax reform enacted in December 2017. For the fourth quarter, we adjudicated 355.8 million adjusted claims, slightly above our guidance range, generating consolidated adjusted EBITDA of $2.1 billion, up 5% over the fourth quarter of 2016. In line with our expectations, our core business adjusted EBITDA also grew 5% during the quarter, growing $1.5 billion over the fourth quarter of 2016. Consolidated adjusted SG&A ramped up in the fourth quarter of 2017 and increased 16% versus the fourth quarter of 2016.

This was a result of increased project spending in the fourth quarter as we focused on enhancing technology capabilities to drive value for patients, clients, and providers. At the same time last year, spending was slow as we worked on our multiyear road map for the company. In the fourth quarter, we generated $1.4 billion of cash flow, which was in line with our expectations but 39% less than the fourth quarter of 2016 due to the timing of receipt of tax benefits and payment of transaction costs and payables. For the full year 2017, we generated $7.10 of consolidated adjusted earnings per diluted share, which represents growth of 11% over the full year 2016.

The increase is driven by the 2% growth in adjusted EBITDA, tax planning initiatives, and management of our capital structure. Consistent with our fourth-quarter results, the full year 2017 GAAP earnings per diluted share of $7.74 increased 44% versus 2016, largely driven by the reduction in our deferred-tax liability from the application of federal tax reform enacted in December 2017. Our consolidated adjusted claims for the year were 1.4 billion, relatively flat compared to prior year and slightly above the midpoint of our guidance range. Our core business adjusted claims were consistent with our expectations, at 1.2 billion.

We generated consolidated adjusted EBITDA of $7.4 billion in 2017, up 2% and slightly above the midpoint of our guidance range. Our core business adjusted EBITDA grew 3% to $4.9 billion, in line with our expectations. The growth in the core business adjusted EBITDA was driven by supply chain management specifically relating to generic procurement sourcing, strong growth in specialty, and clinical up-sells of our new solutions. 2017 consolidated adjusted SG&A increased 2% versus the prior year, in line with our expectations.

Full-year net cash flow from operations was $5.4 billion, an increase of 9% versus 2016. In 2017 we deployed $7.5 billion of cash, including $3.5 billion for strategic acquisitions, $2.9 billion to repurchase common stocks, and $1.1 billion to retire debt. Overall, we delivered on our 2017 expectations and are part of our strong financial performance.Turning now to 2018, our consolidated and core business annual guidance remains unchanged from that we provided in January 2018. We continue to expect to realize core business adjusted EBITDA of $5.325 billion, at the midpoint of the range, up nearly 8% over our core business 2017 adjusted EBITDA , and we expect consolidated adjusted earnings per diluted share to be $9.37, at the midpoint.

The guidance reflects the implications of the tax reform enacted in December 2017. As Tim mentioned, the US Tax Cuts and Jobs Act provides us with an opportunity to share a portion of the tax savings with our staff and the communities in which we operate. We are proud to share the savings provided by the tax reform package to reward our employees for their hard work and dedication to serving our patients and clients. We remain focused on growing our operating cash flow and on our disciplined capital deployment strategies.

In 2018, we expect to generate strong operating cash flow of approximately $5.8 billion to $6.3 billion. Our guidance assumes we will use approximately 25% of our cash flow to repay debt, 8% to 10% toward CAPEX and investments to support our enterprise value initiative, and 40% to 50% allocated to share repurchases. The remainder of our cash flow will follow our usual capital priorities. Additionally, our enterprise value initiative plans for 2018 have not changed.

We expect to invest approximately $140 million in 2018 and realize $65 million to $75 million of savings in 2018, impacting both our core business and transitioning clients' expenses. For the first quarter of 2018, we are forecasting consolidated adjusted earnings per diluted share to be in the range of $1.73 to $1.78 per share. The quarterly trend for our adjusted earnings per diluted share is expected to be similar to what we experienced in 2017. As in previous years, we are expecting a higher earnings ramp in the back half of 2018, as throughout the year we realize higher utilization of our clinical programs, increased penetration of generics across our book of business, and benefits from our supply chain initiatives.Before I turn the call back to the operator for Q&A, let me take a minute to mention our upcoming Investor Day.

As we announced last week, we will be holding an Investor Day on Wednesday, May 2, 2018, in New York City. We hope you'll join members of our leadership team for a deeper dive into our outlook for the future; our strategy for creating value for patients, clients, and shareholders; and why we are best-positioned to take on and tackle the toughest challenges in healthcare. With that, I will turn the call over to the operator for questions. Thank you.

Questions and Answers:

Operator

Thank you. Our first question comes from Lisa Gill with J.P.Morgan. Your line is open.

Lisa Gill -- J.P.Morgan -- Managing Director

Great. Thanks very much for all the commentary. Tim, let's start with the selling season. So, you're talking about retention rate of 96% to 98%, 60% complete.

Is it that you have a lot of the larger accounts -- how do I think about that 60%? Is that based on claims? Is it based on the number of accounts? That's the first question. And then secondly, can you just walk us through what you're seeing in the selling season around cross-sell for eviCore? You talked about the care value around multiple sclerosis but what are you seeing through either the Safeguard programs, Accredo, etc.? Just trying to get a feel for what we could see in 2019 around EBITDA growth related to renewals as well as new businesses.

Tim Wentworth -- Chief Executive Officer and President

Thanks, Lisa, and good morning. First of all, the first part of your question around retention. So, clearly to have the line of sight that we have now is terrific and we worked really hard with our clients over the last several years to develop and put programs in place that have made our clients very sticky to us. It's not that they don't demand competitive offerings.

They do. And we're providing those. And so, at this point, to your point, the large health plans as well as, frankly, the majority of large employers, for 1/1/19 renewals have been secured or we're in a very confident position with them, working through the last points. So we're in great shape on that and that's why we're able to give the guidance a quarter earlier than we would normally.

As it relates to the cross-selling, it's a little early to be cross-selling eviCore. What I'd say is eviCore is performing extraordinarily well on its own, has a very robust pipeline of opportunities, has continued to perform and deliver on its value proposition really well to its clients. The more we've gotten to see their business and understand it, it's a tremendous job they do for their clients. We are, we've had -- and Dave Queller's here today -- we've had, our teams get together to look at our joint clients and things we can do for them particularly quickly but longer term, Dr.

Miller, John Arlotta, and the whole team are plotting a whole series of things that over the next 18 months we're going to be able to roll out. So, while still early, our clients are interested. They're excited. Again, many of them use eviCore already and those that don't are very interested to understand the proposition, particularly with the PBM.

That said, the programs that we more traditionally have been talking with clients about and developing in conjunction with them have come out of the box very strongly this year. And so, as I told you, we launched our MS1 on 1 January, and we already have clients representing 22 million lives and a robust pipeline of additional conversations there. Our opioid program continues to gain significant traction and our longer-term programs continue to as well, as we go out to clients where we may have had to customize those programs for some health plans. We're seeing, again, an amazing amount of additional uptake.

And I would point to something like the cardiovascular care value program. When you see where we've been able to help our clients and take risks on the PSC P9s [ph], there's going to be an opportunity there, for example, for clients to rethink that program and us to rework with them again as the NASH indication comes out over the next 24 months or less. And so, we see, again, an opportunity to dynamically work with a client in all these programs as we bring others in. And finally, because you mentioned it, the Accredo business is performing very, very well and we have had a number of clients already narrow again to exclusive Accredo, not just to our Safeguard programs but also as a stand-alone opportunity.

Lisa Gill -- J.P.Morgan -- Managing Director

That's helpful. And then, Jim, the $20 million, observing that for the bonuses within your current guidance. Can you talk about what you're seeing in the business that gives you the comfort to be able to offset that, one? And two, we heard from others that they need to raise minimum wages. Do you need to go beyond this bonus and the philanthropic side of offering, education, etc.

to your employees or do you not have a lot of minimum wage employees that you would have to raise wages on?

Tim Wentworth -- Chief Executive Officer and President

I'll start off and I'll let Jim jump in. So, a number of things give us the confidence to essentially not change our range or the midpoint of the range of our guidance. First of all, we had strong 1/1, as I mentioned. And so, we were able to bring those resources down to a more normal operating level more quickly, even than we would have anticipated in our more aggressive assumptions.

Secondly, I fundamentally believe and as the emails, I've received from employees already convinced me, that when you treat employees right, they're more productive and I fundamentally believe in the way we think about the world is when you have best employees, you see it in productivity. And so, I fully anticipate that a large part of the investment that we're making in these bonuses will come back in incremental productivity above our plan through our leaders and our employees engaging differently. And as it relates to minimum wage, to your point in your question, that's not something that we have as much exposure to. We don't operate retail stores and so forth, and so, our employees, that's not been an issue.

We pay competitively. We look at our local markets. We're dynamic in that both in terms of benefits and compensation. For example, this year we added paid family leave for both fathers and mothers.

So we're dynamic about that. We didn't need a tax increase to make sure we treat our employees well.

Lisa Gill -- J.P.Morgan -- Managing Director

OK, great.

James Havel -- Executive Vice President and Chief Financial Officer

And, Lisa, let me address your first question about why we didn't change our guidance. Effectively we have a back-door raise here because we aren't going to absorb the $20 million into our numbers and not adjust guidance down at all for that. You said, "Why would you do that?" We're off to a tremendous start. Our 1-1 was executed flawlessly.

It was just as strong and as good as it's ever been, and that allowed us to make some adjustments to our operating structure and operating expenses quite early on in the process. Also, as Tim pointed out, the selling season, the renewal season, in particular, has been outstanding. We have lots of optimism as we look forward where we've got the lives we need, we're going to get the utilization we want. So we really feel that we're well-positioned to do this.

I agree. I echo Tim's comments in terms of the minimum wage comment. I would also tell you that our senior staff when designing this program was very interested in rewarding to the extent we can those folks who've been around and served us for a long time and have stuck with us over the years. And that's why that bonus was based a lot on tenure, and I think that was a really important point that our senior staff wanted to make with our team.

And, again, our folks are experienced, they've been around, they've done great work for us for many years and this is just a real small token of our appreciation for what they do for us.

Lisa Gill -- J.P.Morgan -- Managing Director

OK. Great. Well, keep the momentum going in 2018.

Operator

Our next question comes from John Kreger with William Blair. Your line is open.

John Kreger -- William Blair and Company -- Analyst

Hi. Thanks very much. Tim, could you talk a little bit more about how you're thinking about integrating eviCore with the core PBM business? And what sort of metrics will you be giving us going forward so that we can kind of track the cross-sell opportunity?

Tim Wentworth -- Chief Executive Officer and President

Yeah. So, what I'll tell you is we, I'm not prepared to give you exact metrics yet. I mean, you'll see in our other business operations it's going to be dominated by eviCore, and so, you'll be able to see how, pretty good read-through in terms of how eviCore's performing because of course, UBC is no longer in there. We do have our specialty distribution business in there.

So, that's also there but we're still working through that and our Analyst Day would be a good opportunity for us to probably ground you in how we're thinking about it. It's still too early for me to give you a lot there. As it relates to, though, what we're thinking about what could be done with the combination, again, I don't want to get too far ahead of our skis in terms of the conversations we're having and, frankly, we're talking with clients first to make sure that our thinking is square but we do think that the combination for our health plans and our ASO knowledge, we think, a lot of health plans, ASO clients, we can help our health plans drive that through to their marketplaces by tweaking some of these products a bit. We also think that there's a really interesting network strategy potentially using eviCore's business and so forth.

Steve's here and he's been directly integrating with eviCore, looking at the drug spend on the medical side and other things. Steve, I don't know if there are other things you want to add.

Steve Miller -- Senior Vice President and Chief Medical Officer

The only thing I'd add is when you think about the data that they hold, servicing almost 120 million people and what Express Script holds, this is actually a phenomenal platform for the future to manage across the full spectrum of medical and pharmacy spend. So when you think about solutions that the country's looking for to end fragmentation and to really facilitate better care at a lower cost, we're just very excited. And so, we look at this more as a collaboration than an integration, and collaborating with them, I think we're going to achieve some great things.

John Kreger -- William Blair and Company -- Analyst

Thanks very much. Maybe a quick follow-up on the core PBM business. As you're engaging in some of these earlier renewal discussions, are kind of risk-sharing trend guarantees becoming a bigger thing? I assume that's a pretty significant competitive advantage for you. I'm just curious if it's starting to become part of the renewal package, so to speak.

Tim Wentworth -- Chief Executive Officer and President

It has not as of, sort of as we sit here. We take plenty of risks in terms of our performance and our ability to deliver good financials and so forth, but in terms of the kind of things you're implying, I would not say that's the case today. I would also tell you though that as I look out over the next three years, I think that's a very meaningful opportunity that we see.

John Kreger -- William Blair and Company -- Analyst

Great. Thank you.

Operator

Our next question comes from Erin Wright with Credit Suisse. Your line is open.

Erin Wright -- Credit Suisse -- Analyst

Can you elaborate some more kind of on the opportunity with biosimilars? We've obviously been talking about that for a long time and maybe we're at sort of a next step in sort of that opportunity and maybe some of the nearer-term opportunities and then what you see on sort of the longer term horizon?

Tim Wentworth -- Chief Executive Officer and President

I'll start and then I'll have Everett jump in as well. So, the short answer is, it's frustrating. And we've been very, very vocal about that in terms of the fact that the true biosimilars being held up in courts and it could be as long as until the end of '22, into '23 before we see a meaningful biosimilar in our country. I would point out that they're working really well in other places.

That being said, in the meantime years and leading up into this year, in fact, specialty generics, which are different obviously than biosimilars have become an important dynamic year over year as we work to drive the kind of drug trends that we talked about earlier in our prepared remarks. And so, whether looking backwards, things Gleevec for the treatment of certain types of cancer or looking forward this year, for example, to Copaxone 40 and potentially Tracleer and a couple of other drugs, we see opportunities to meaningfully go at the broadly defined specialty space even as we wait for a true biologic-equivalent to come to market, which we are very excited about. Everett, do you want to add any additional color there?

Everett Neville -- Executive Vice President

I don't have a lot to add, Tim, but certainly, there are some biosimilars coming in the short term. We expect Neulasta probably by the end of the year, early next year. We've seen some in the medical space, that play a little bit in the pharmacy space, but agree that the real products that we're looking forward to, like Humira, may be as late as 2023. They could come earlier, someone [Inaudible] at risk.

Our short-term focus, though, is primarily on the generic products. We have several generic launches every year as we look out to the next three, four years that will be impactful. And then the last thing I would add is that our formation of [Inaudible] Rx was primarily strategically done in order to position ourselves to get the leverage that we believe we'll need to negotiate for biosimilar agreements. We expect the biosimilar agreements to look something like brand agreements and something like generic agreements, so somewhere in between those, and we're positioning and laying our plans to take advantage of that when they happen.

Erin Wright -- Credit Suisse -- Analyst

OK great. And how much is sort of the medical benefit kind of a limitation on that front, versus, like, interchangeability, definitions, and how does kind of maybe eviCore position you in that respect?

Everett Neville -- Executive Vice President

So, the date on the medical side that has certainly been a barrier, given that reimbursement structure, there's not a lot of incentives on the medical side. That is something we're focused on and believe with eviCore we will be able to address more completely in the coming years. We are making some small progress. Some of these products are maybe 10% so far on the pharmacy side.

We can expect to see that slightly grow but again the real payoff for us when we get to the larger products such as Humira, Enbrell, the MS products that appear to be coming sometime around 2022, 2023, 2024.

Erin Wright -- Credit Suisse -- Analyst

Excellent. Thank you.

Operator

Our next question comes from Charles Rhyee with Cowen. Your line is open.

Charles Rhyee -- Cowen and Company -- Managing Director

Hey, thanks for taking the questions. I had a question about -- it looks like the margins obviously were better than I think people were expecting. To a certain extent, you talked about the clinical programs helping to drive that. Can you talk about what the penetration in your client base of these programs are sort of roughly today and where you think they can, sort of where the upper limit on that penetration could be?

Tim Wentworth -- Chief Executive Officer and President

I'll start. I mean, I think it depends on the program, but I would say the Safeguard programs, I think, as I told you, we've got plans with well over 20 million lives in the majority of those programs now actually, I believe, and from the standpoint of room to run, we still believe we have room to run. Again, there a lot of reasons that clients, they do require these programs. A certain level of benefit changes as it relates to narrowing to Accredo, for example, for certain of the programs, or narrowing to certain retailers for diabetes care value program.

And so, we continue to see not a trickle but a good strong stream of continued interest in it and I think we could easily over the next three years see a doubling of these things. Again, the other piece is we've done a great job of driving a technological approach to what we do that's lightweight and it allows us to be far more nimble as we customize these programs, particularly for health plans who really want put their brands on them and go and compete. And I'm in receipt of a -- I'm actually sitting here sharing with my team a brochure from Health Now in upstate New York where they actually published a brochure on the value of integration and they talk all about our programs in there and we're really proud with the fact that we've been able to adapt our programs to go and help them win in their markets and carve back in the people that -- their clients. And so, it really does depend.

I would tell you with Accredo, in the commercial book of business, we've got deep penetration. We're probably north of 70%, maybe as close as 80%, but we probably are not quite half yet in our health plans but I would also tell you if you look at the growth of Accredo this year, both stand-alone health plans and PBM client health plans, that's been the key driver of our growth and continues to be as we look over the next 18 months and look at the number of conversations that we're in. So, plenty of room to run and, again, continued opportunity to build out additional programs as the market evolves.

James Havel -- Executive Vice President and Chief Financial Officer

That last point Tim made is absolutely key. While 2017 was a record year for what we call up-sells, and that's really how we think of these, we're going to see the benefits of those sales into 2018 and beyond certainly, but the thing to remember is these programs are not static. They change. And as the program runs and is successful, it continues to run but then our teams are constantly behind that, generating new programs and new opportunities to benefit the patients.

And so, don't think of it just in terms of a static number of programs and they're going to hit a cap and that's going to be the end of it. This program is going to continue to run for us.

Charles Rhyee -- Cowen and Company -- Managing Director

Just maybe one follow-up related to some of the budget proposals. I think in particular when we look at some of these states looking for waivers to implement some formularies, can you talk about sort of what the opportunity there is for you? Right now it looks like states will try to do it on their own. It's not clear what the language exactly looks like, at least I'm not fully aware of it but if you could help us understand sort of how you're positioning yourselves for this Medicaid opportunity should this be allowed. Thanks.

Tim Wentworth -- Chief Executive Officer and President

Yeah, and what I would tell you is that at least in the initial situation we have clients who compete in Medicaid and who will be helping take advantage of incremental flexibility whether that be on formularies and so forth. I would back up, though. One of the things that I think is important across the regulated programs is we've been advocating for the ability to do value-based contracting and not trip over certain things that today make that harder for a manufacturer to support relative to best price and other things. And so, that's beyond just the state budgets issue.

That's also a Medicare, for our clients that are on Medicare. What I'd broadly say is this. I think in the short term the states have a lot to think through. And, again, we'll support our clients to the extent they compete there.

We haven't been too much of a player on the direct basis for state Medicaid but longer term, the adoption of commercially proven programs and approaches in the regulated marketplace is something that we just broadly advocate both at the state level and at the federal level and we will continue to around formulary management, around retail network management, around utilization management, around dynamic things, taking advantage of opportunities when they arise, not having to have them wait for as long as potentially 18 months. And so, I would say, broadly speaking, we're all for things that allow tighter management. And, frankly, when you look at state budgets across the country, there's no question in my mind that they're going to need the kind of tools that we will provide to our clients that compete in that Medicaid space.

Charles Rhyee -- Cowen and Company -- Managing Director

OK, thanks a lot.

Operator

Our next question comes from Eric Percher with Nephron Research. Your line is open.

Eric Percher -- Nephron Research -- Analyst

Thank you. A question on the cost-reduction program, maybe on the expense side versus the investment side. What are some of the items, Jim, that you're taking on as we progress through the year? Where will we see benefits? And does Anthem taking on some responsibilities in advance of 2020 have a meaningful impact?

James Havel -- Executive Vice President and Chief Financial Officer

Anthem certainly has a meaningful impact. As they run their business and decide that they're going to do function A, B, or C, then we need to be responsive to that certainly. And so, that gives us an opportunity on the expense side to really take out costs. So, for example, if they take a greater role in prior authorizations, for example, then we take less of a role and we can eliminate those costs from our structure.

Similarly, if they choose to take on other things within the terms of the contract, we can certainly adjust to it. So we're constantly looking to compress our operations and our cost structure to make sure it matches up so we can serve the Anthem patients but at the same time anticipate as we get to the end of that contract. At the same time, when you take a look at our business, we also have to make sure that our business is streamlined such that we can be more responsive and most responsive to our patients and our providers, and what they're really looking for there is a digital interface. I mean, they don't really want to spend a lot of time on the telephone talking to us.

They don't want to send us a lot of paperwork. What they really want to do is operate online. So, we need to be completely responsive to that. We need to be even better at EPA.

We need to be even better at managing electronic records. We need to be even better at digital communications and self-service tools. And that's the type of investment, if you will, that we're making, but the benefits from that are going to be absolutely tremendous as we, again, are able to take out some of those touch points because our clients and our providers will get better service, no question about it, but at the same time we're going to be saving some costs associated with it. Does that get to your point, Eric?

Eric Percher -- Nephron Research -- Analyst

Yeah. And relative to what Anthem did, does that mean that in '18 and '19 we'll see them take on responsibilities? The revenue is the revenue and that doesn't change, but some of the costs related to serving and the contractor and moving before we get to 2020?

James Havel -- Executive Vice President and Chief Financial Officer

Not necessarily. We're going to have to be responsive to the services we provide. And so, where contractually we provide the services, then we expect to be paid for those services and that's really how you have to think of it, how you match up. So, this isn't a set fee, if you will, or a set revenue over the period of performance.

For example, you're seeing Anthem pull out of some of the exchanges and some of the lives are going down. And so, naturally the revenues will go down and the costs associated with meeting those revenue requirements will also go down. So, we refer to it as transitioning for a reason. They really are transitioning out.

We have to remain responsive to their needs and their patients' needs in particular, but we will be responsive to that and we'll adjust as we go.

Eric Percher -- Nephron Research -- Analyst

That's helpful. Thank you.

Operator

Our next question comes from Glen Santangelo with Deutsche Bank. Your line is open.

Glen Santangelo -- Deutsche Bank -- Managing Director

Yeah. Thanks and good morning. Hey, Tim, I just wanted to follow up on this year's selling season. I mean, it sounds like the company's having some early success and I'm just kind of curious, could you maybe comment on the CVS-Aetna situation and that dynamic, and is that playing a part at all in the conversations or has your success has been more independent of that then maybe we appreciate? Thanks.

Tim Wentworth -- Chief Executive Officer and President

Yeah. Thanks, Glen. So, what I'd say is it's way too early for CVS-Aetna to have had any real impact. I mean, the wins that we've had were things that we were prospecting a year ago or more.

One of them was, it's now public, it's a state in the Northeast. I don't think that they were all that worried about that. They were looking at who's going to manage their trend better, who's going to give them up a price that's sort of competitive and service that feels durable. And so, I would say in that one, a couple of the other larger wins that we've had, would not have had that as a meaningful dynamic.

Again, what I think a meaningful dynamic is, we're getting results for clients, they're talking about it out. We did, as I've said in earlier calls, revamp significantly our approach to going to the market and selling and winning, and I think that's what's driving it. And so, to the extent that CVS and Aetna is out there, I'm sure it's a conversation point with some of our sales folks, but I will tell you my belief is that we have to focus on our attributes where we can help the client, where we can win -- or help them win -- and the rest takes care of itself.

Glen Santangelo -- Deutsche Bank -- Managing Director

Thanks. And maybe just one follow-up on the 2019 selling season. I mean, as we think about a multiyear road map, in the past you've sort of commented about the total number scripts that were out for rebid for 2018 and 2019 combined. Can you maybe give us an update there and maybe give us a sense for how much of that business may be yours that out for rebid at this point so we have an opportunity to think about how that could play out over the next couple years?

Tim Wentworth -- Chief Executive Officer and President

Yeah, what I would tell you is, as you can imagine, this year you [Inaudible] for 1/1/19, by now what's out there for us is fairly low as far as what's in our range. It wasn't where we started, we started sort of normal but, again, we've been very successful in not only renewing, but in almost every case strategically enlarging our relationship while we renewed, whether that's Accredo or other things. As we look at '19, what I would do is characterize the amount of business to renew out there is on the normal to low normal side. So, again, we do not have a larger than typical bolus that would be up for 1/1/20.

Glen Santangelo -- Deutsche Bank -- Managing Director

OK, thank you.

Operator

Next question comes from Robert Jones with Goldman Sachs. Your line is open.

Robert Jones -- Goldman Sachs -- Analyst

Great. Thanks for taking the questions. Actually, I just wanted to start on mail and specialty revenue, actually seen slight declines there the last two quarters, which, I think, is somewhat surprising, especially, Tim, in light of some of the comments you made about how well Accredo's been performing. And so, just curious if maybe you could spend a little time talking about what you're seeing within mail separately from what you're seeing within the specialty.

And then just any thoughts, again, I know you get this question from time to time, maybe it'll come again at the Analyst Day, any thoughts about breaking out those two buckets just to get a little bit more visibility?

Tim Wentworth -- Chief Executive Officer and President

Yeah. So, let me first say that, to the first part, what you're seeing is combined script [Inaudible]. Specialty is not going down. In fact, we grew our specialty last year faster than the market, both EBITDA and volume, but mail is.

And of course, specialty's such a small percentage of the number that frankly if it was up or down, it wouldn't drive what you'd probably see materially. Mail is down sequentially last two quarters because of the mid-year losses that we had, a couple of whom had fairly high mail penetration. And so, even as we will be implementing more members at mail and putting our omnichannel programs in, you had that headwind in mail, but specialty has grown very, very well. And, again, mail is taking a bit of a breather in terms of growth because we really focused on our 90-day omnichannel programs.

We believe over the longer term those position us very well for patient choice, where the patient will be able to exercise their preference and where the channel will deliver an incredibly strong experience but, again, with those client losses, that was more than we were going to overcome in the short term.

James Havel -- Executive Vice President and Chief Financial Officer

And, Robert, just let me add on in terms of ever breaking that out, as we look at both specialty and mail, those are absolutely embedded in our PBM operations and we don't break them out internally and we're not going to break them out specially or attempt to break them out because there would be way too many estimates and way too many interactions of the rest of the business involved. So, we do describe and release information on the claim volume, but we will not be breaking those out in the future in terms of a segment or other type of operation.

Tim Wentworth -- Chief Executive Officer and President

I will say that at Analyst Day we're going to give you a much deeper look at specialty, and we're still working through sort of how to best be able to demonstrate in a way that you will be able to appreciate sort of our stand-alone -- I say stand-alone, sorry -- Accredo specialty growth and proposition.

Robert Jones -- Goldman Sachs -- Analyst

That's helpful. Definitely look forward to that and, I think, just on the surface seeing the overall revenue number down the two quarters, I think, is what probably stuck out most but I understand that there's some attrition behind the scenes there as well. I guess, just as a follow-up, it sounds like you guys have Everett and Dr. Miller in the room.

So, just going back to some of the biosimilar comments from before and specifically related to the announcement of the JV and purchasing on special drugs at Walgreens, I was just wondering if maybe you could take a step back and give us a sense of what really the play is here with combining the specialty volume with Walgreens. I think from our standpoint we always thought the value really that you guys drive on brands and even biosimilars really at this point has really been through formulary. Just curious if you could elaborate a little bit on the decision to combine your purchasing with Walgreens.

Everett Neville -- Executive Vice President

Sure, this is Everett. I'll take that. A couple of things. We do expect some modest improvement in our purchasing of brands from combining the volumes.

So, that's the near term. The long-term play with biosimilars, as we look out to biosimilars, we think that a large component of that will be brand-like, i.e., formulary-driven, but when you get into multiple biosimilars, which is the likely scenario, four or five manufacturers making a biosimilar, pharmacy-preferred drugs will be a component of that. So there will be some pharmacy decision as far as which products are stocked and carried at pharmacies, and the combined effect of those will be what drives the cost of the biosimilars. Would also point out that Walgreens does have some highly controlled and managed segments that they have that also we would look to coordinate our actions with.

Tim Wentworth -- Chief Executive Officer and President

And Robert, I want to step back for just a quick second because, as you were transitioning your question, you used the word "revenue" rather than "claims," and what I would say, revenue, the other thing I'd point to is that mail, we saw a 200-basis-point increase in generics, which would be driving that revenue down. That's obviously us doing our job and so forth. And so, that would have also attributed to the revenue drop.

Robert Jones -- Goldman Sachs -- Analyst

Appreciate that, Tim. Thanks.

Operator

Next question comes from George Hill with RBC. Your line is open.

George Hill -- RBC Capital Markets -- Managing Director

Good morning, guys. I think a lot of the key topics have been -- I guess I would just talk on when you look at kind of the White House document that came out earlier, the idea of point-of-sale rebates and drawing a more direct line between the cost to the consumer and the cost of the drug and the economics of the drug and the rebate seemed to have some traction at the federal level. Are you seeing any demand for that type of reimbursement change in commercial books whether it be risk or ASO?

Tim Wentworth -- Chief Executive Officer and President

No, I would say not at all. What I would say is it did appear in the in the letter, as you say, and it's obviously been a talk track in Washington that pharma has been putting it forward to draw attention away from their price increases. Yeah, I think there was an article yesterday in Politico that showed that I think, there's an increasing sort of deafness to some of those arguments but doesn't mean that the rebates at point of sale aren't being considered. What I would say is this.

It's really important patients get what they need, can afford it, and stay on it. And I think we all can agree on that. And it's really important to look for ways to ensure that. That's why we are so strong in patient-assistance programs at Accredo and other things, but as we look at the commercial market and the specific thrust of your question, we have simply not seen a material interest at the commercial level or, frankly, the health-plan level.

We do have some, in their particular markets or with specific plan designs, where they prefer to do it, but you've not seen it as a major move yet. You've seen clients talking about co-pay caps and certain other things, but at least at this point, I would tell you the market broadly, in our view, as to what is sort of -- Med D is a popular program, it comes in, it's coming in under its scored budget, and so forth. Keeping the premiums low for all the patients that have been so happy has continued to be the goal of most of the plans. By the way, there's no question for us and I think I've said this before, it doesn't produce an incremental headwind as it relates to our business model.

We've been doing rebates at point of sale since the mid-2000s. We've actually revised that to be an, even more, user-friendly and precise and digital sort of approach for plans. So we're ready to go if it were to go that way, but we do believe it's up to the plan to determine how they want to go out and compete.

George Hill -- RBC Capital Markets -- Managing Director

That's helpful. And maybe a quick housekeeping question for Jim. Jim, just as I look at the transitioning client business in the back half of the year, I guess, is there anything you can tell us about the non-Anthem business as opposed to the Anthem business and how it turns in the back half versus first half?

James Havel -- Executive Vice President and Chief Financial Officer

Yeah, pretty much the non-Anthem business has virtually disappeared when you start 2018. There is a little bit of residual that will flow into the year but, by and large, when you think about the transitioning clients at this point, you almost have to think of clients -- it's almost exclusively Anthem for the rest of 2018 and beyond.

George Hill -- RBC Capital Markets -- Managing Director

OK. I guess all the per-claim metrics in that part of the book probably didn't change much in the back half of the year versus the first half.

James Havel -- Executive Vice President and Chief Financial Officer

That's right.

George Hill -- RBC Capital Markets -- Managing Director

Thank you.

Operator

Next question comes from Ricky Goldwasser with Morgan Stanley. Your line is open.

Ricky Goldwasser -- Morgan Stanley -- Managing Director

Yeah. Good morning. So, CVS-Aetna would likely have to divest some part-D business. Is this an area of interest for you?

Tim Wentworth -- Chief Executive Officer and President

Thanks for the question, Ricky. What I would say is this. We are very proud of the work that we do in our PDP. We think it helps eat our own cooking in terms of all the clients that we help compete in that marketplace in our MAPD products as well as our PDP products.

And we've had a really successful enrollment year this year in that we watched a new line, a value line there and came in at the very high side of our expectations in terms of enrollment growth there, which is a positive. And so, what I would tell you is to the extent that it was a meaningful book of business coming out to the market, as we would look at anything coming out to market in any of the spaces we compete in, we would take a look.

Ricky Goldwasser -- Morgan Stanley -- Managing Director

And when we think about the selling season and retention rate and what it means for next year, within that range of 96% to 98% retention, where do you need to end the year at to see script growth in 2019?

Tim Wentworth -- Chief Executive Officer and President

Well, obviously that's a function the success we have in sales as well as, frankly, how we help our health plans grow their books of business. What I would tell you is this. I think anywhere in that range we have the potential to come in and show claims growth. It's tougher at the bottom but it depends also on a couple of large sales, which I can't sit here and guarantee to you.

But that range gives us room given the sales success we've had so far, in terms of the new markets we've entered, including cash and other things. As you may know now, we're in the pet market and we'll see how that goes. It's kind of a fun place for us to leverage our scale at no capital investment to speak of, but with some great leadership in our company and some possible ideas there. So there are a number ways that we think we can get the claims growth even if we came in at the lower end of that range, which my intention is to not come in at the lower of the range but it's a little early to declare that.

Ricky Goldwasser -- Morgan Stanley -- Managing Director

Thank you.

Operator

Next question comes from Ross Muken with eviCore. Your line is open.

Elizabeth Anderson -- Evercore -- Vice President

Hi, this is Elizabeth Anderson, in for Ross. One thing that caught my interest recently was the new specialty buying group that you announced with WBA. I was wondering if you could give us a little bit more color on the genesis of that and what your goals and you see the competitive advantage of that organization being. Thanks.

Tim Wentworth -- Chief Executive Officer and President

Sure, I'll let Everett take that.

Everett Neville -- Executive Vice President

Yeah. And just to reiterate, I think, not a whole lot more to say about that. It is that just combining of the purchasing for Walgreens' various specialty pharmacy arrangements, as well as ours. We expect some modest improvement in the purchasing side.

It's primarily strategically positioning ourselves for some biosimilar negotiations, which we expect to begin to happen as early as this year and certainly to pick up speed as we head toward 2023.

Elizabeth Anderson -- Evercore -- Vice President

Thanks.

Operator

Next question comes from Brian Tanquilut with Jefferies. Your line is open.

Bryan Ross -- Jefferies -- Analyst

Hey, this is Bryan Ross on for Brian Tanquilut. Just a quick one on the procurement side. I know you've already touched on specialty with ValoremRx, but now that you're part of WBAD, have you started to see a lift in generic purchasing savings this year? How material are these savings and is there any brand to those as we move throughout the year?

Tim Wentworth -- Chief Executive Officer and President

Well, I'll start real quickly and just say we came into this year very strong. Our team, led by Jan Burkett, did an amazing job last year before we entered into the GPO, positioning us very strongly with our generic bid. And so, that carries us into this year with great momentum. And obviously, the GPO gives us opportunity to look at each of these contracts but also go back out and create value which is a bit of a longer-term prospect and I'll let Everett give you sort of the latest on that.

Everett Neville -- Executive Vice President

At this point in time, the WBAD combination has largely optimized the combined contracts. So, we are seeing value from that already. Their process is kind of a continuous negotiation process. So, that's already begun.

We are at the top end of the range of value that we expected for '18. And so, that's coming online, again, as we expected, maybe even a little better. That should continue to grow in the out years.

Bryan Ross -- Jefferies -- Analyst

Thanks, guys.

Operator

Next question comes from Michael Cherny with Bank of America Merrill Lynch. Your line is open.

Michael Cherny -- Bank of America Merrill Lynch -- Analyst

Good morning, guys, and thanks for the question. A lot of topics have been discussed. Just wanted to touch on Inside Rx, another one the programs you've been talking about in terms of driving differentiation and savings. Can you give an update on what type of tax rate you've had, what the interest level is in some of those programs and over time how you see that program evolving?

Tim Wentworth -- Chief Executive Officer and President

Again, I'm going to let Everett, who's sort of really with his team developed it, although my top-line comment would be it's a really good reflection of how the independent model can go and create value. Nobody was giving rebates at the point of sale for these and now they are. I'm not going to suggest that the tail's going to wag the dog but pets could be really interesting there too because they're an under-served folks there. With that, I'm going to pass it over to Everett

Everett Neville -- Executive Vice President

Yeah. So, this time last year we had zero cash claims. We expect in 2018 to be somewhere between 10 million and 20 million cash claims. So the interest is actually pretty significant and we're still in the learning phase, making some decisions on should we expand or deploy our footprint in this space.

Michael Cherny -- Bank of America Merrill Lynch -- Analyst

Thanks.

Tim Wentworth -- Chief Executive Officer and President

With that, operator, we will take one more question, please.

Operator

Thank you. Our last question comes from David Larsen with Leerink. Your line is open.

David Larsen -- Leerink -- Managing Director

Hi. Congrats on a good quarter. Can you maybe talk a bit about co-pay accelerator programs that we've been hearing about where health plans in some cases are not allowing patient-assistance programs to count toward their deductibles? Have you seen this and what role does Express Scripts have in that and what does that do to your earnings, if anything?

Tim Wentworth -- Chief Executive Officer and President

Well, I'll start with letting actually Dr. Miller talk about from the impact on the health plans. What Id' say from an earnings standpoint is, it's non-material to nothing. Our job is to get patients on a drug, help them stay on a drug, and if they're entitled to something, to get it but, Steve, do you want to talk about it more or Brian?

Steve Miller -- Senior Vice President and Chief Medical Officer

To keep a level playing field for their employees, a lot of plans are saying "Why should we not have the co-pay card apply for drugs, but if you go the hospital, you don't get the same type of discount?" So, this is really to treat all employees fairly. So what we do is we accept these co-pay cards to help offset the cost, which actually lowers the total cost for the plan. Therefore, everyone benefits from lower premiums, but the individual patient is still responsible for their share of the co-pay. These things have gotten a lot more talk than they are actually in application but we have the abilities to work with our clients.

We're incredibly flexible in our platform. And so, we can accommodate this as the client needs.

David Larsen -- Leerink -- Managing Director

Just one more follow-up. Any thoughts on Amazon, like, they're a client of yours? When did they sign with you? How long does that contract run through? And have there been any more discussions around what, how maybe you could work with Amazon in the future? Thanks.

Tim Wentworth -- Chief Executive Officer and President

I think it was kind of folks figured out middle last year that we had implemented Amazon, very pleased when they chose us. What I would say as it relates to sort of the contract length and everything else, the only thing I'd say is, it's a normal commercial contract for us. We are performing well to that contract. I would say, I'm not going to talk about any of the conversations we've had other than to say as a client they care a lot about their employees.

They want service to be excellent. They are focused on every dollar that they're spending, just as all of our clients are, and we're having terrific conversations with them and implementing a number of our programs that are going to help their employees get drugs more safely, more cost-effectively and stay on them. And so, they've been a great client in terms of adopting programs and working with us.

David Larsen -- Leerink -- Managing Director

Great. Thanks very much. And then if Part B rolls into Part D, would that be an opportunity for you guys?

Tim Wentworth -- Chief Executive Officer and President

Yeah, we do think so. That's one of the things we've been advocating as it relates to, in Washington D.C., is, again, bringing the disciplined approach that we and our industry, frankly, as well our company would bring to Part B, to Part D and bringing that into the sort management paradigm that would be very positive.

David Larsen -- Leerink -- Managing Director

Great. Thanks very much.

Tim Wentworth -- Chief Executive Officer and President

Well, I appreciate everyone dialing in. That's a good question to end on, because, as you can see, we're excited about our business. We love a model where when we can drive trends down to zero, we actually get paid more for it, and we're aligned with our clients in terms of that, and we are focused on continuing to drive that model and look forward to sharing a lot more with you at our May 2 Analysts Day, so thanks for joining us today.

Operator

Thank you for your participation in today's conference. Please disconnect at this time.

Duration: 65 minutes

Call Participants:

Ben Bier -- Vice President Investor Relations

Tim Wentworth -- Chief Executive Officer and President

James Havel -- Executive Vice President and Chief Financial Officer

Lisa Gill -- J.P.Morgan -- Managing Director

John Kreger -- William Blair and Company -- Analyst

Steve Miller -- Senior Vice President and Chief Medical Officer

Erin Wright -- Credit Suisse -- Analyst

Everett Neville -- Executive Vice President

Charles Rhyee -- Cowen and Company -- Managing Director

Eric Percher -- Nephron Research -- Analyst

Glen Santangelo -- Deutsche Bank -- Managing Director

Robert Jones -- Goldman Sachs -- Analyst

George Hill -- RBC Capital Markets -- Managing Director

Ricky Goldwasser -- Morgan Stanley -- Managing Director

Elizabeth Anderson -- Evercore -- Vice President

Bryan Ross -- Jefferies -- Analyst

Michael Cherny -- Bank of America Merrill Lynch -- Analyst

David Larsen -- Leerink -- Managing Director

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