The latest health-care implosion has been that of Biogen (NASDAQ:BIIB) and partner Elan (NYSE:ELN), whose Tysabri treatment for multiple sclerosis is under scrutiny for a possible link with a rare, and often fatal, central nervous system disease. Yet all is not negative on this front, as seen with the results from prescription company Express Scripts (NASDAQ:ESRX).
On its earnings news, released Wednesday, Express Scripts' stock rose 9% to $84.50 and is up another 2% today so far.
Net income for the fourth quarter was $80.9 million, or $1.07 a share, which was up from $67.4 million, or $0.86 a share, for the same period a year ago. Revenues rose 13% to $3.9 billion from $3.5 billion, accompanying the 24% increase in EPS.
Express Scripts is one of the largest pharmacy benefit managers (PBMs) in the U.S. It provides services such as claims processing, mail services, benefit design consultation, and disease management. Clients include managed-care organizations, insurance carriers, third-party administrators, government-sponsored benefit plans, employers, and union-sponsored benefit plans.
As the company noted in the press release about its fourth-quarter results, the growth came from the "acquisition of CuraScript, increased use of prescription drugs and drug price inflation."
Express Scripts sees continued strength, expecting EPS of $1.07 or higher for the first quarter. Wall Street has been forecasting $1.04. Moreover, in the fourth quarter, the company spent $176.1 million -- the bulk of its operating cash flow -- to repurchase 2.4 million of its shares.
In hindsight, it looks like Express Scripts' $335 million purchase of CuraScript was quite prescient. CuraScript is a leader in specialty pharmacy services, dealing with complex therapies for oncology, rheumatoid arthritis, and others -- a submarket experiencing strong growth. In fact, one of Express Scripts' competitors, Medco Health Solutions (NYSE:MHS), recently shelled out a hefty $2.2 billion for Accredo Health (NASDAQ:ACDO), a specialty pharmacy provider.
By being ahead of time, Express Scripts was able to snag an acquisition that is expected to provide 20% to 25% top-line growth for several years. As for Medco, it had to pay up handsomely and will likely need to wait at least a year to get results.
Fool contributor Tom Taulli does not own shares mentioned in this article.
