CVS’ Ryan delivers upbeat message at JPMorgan conference
WOONSOCKET, R.I. Tom Ryan, CVS chairman, president and chief executive officer of CVS/Caremark had an upbeat message for attendees of the JPMorgan Healthcare Conference in San Francisco this week.
During the presentation, which was webcast, Ryan discussed factors impacting December sales, provided an update on its merger with Caremark and stressed the importance of its MinuteClinic business, an operator of in-store health clinics.
CVS recently reported that December same-store sales increased 1.8 percent. Pharmacy same-store sales rose 2.4 percent, and were negatively impacted by about 470 basis points due to recent generic introductions. Front-end same-store sales rose 0.6 percent.
“The flu season and the cough/cold season was significantly less. In fact, the season was the weakest it has been in nine years,” said Ryan. “This does impact front store sales and, obviously, pharmacy sales.”
Ryan added that CVS did see “some evidence” of a cautious consumer in its front store business; however, he reminded investors that front-end discretionary merchandise, such as seasonal items and small appliances, account for a small percentage operating profits.
“We are not totally recession-resistant but it impacts us less than most other retailers … 3 percent of our overall operating profit is in front-end discretionary items so if there’s a risk in the economy it is really not that bad. If we lose 25 percent of that operating profit it is less than one penny a share,” said Ryan.
With regard to its Caremark merger, Ryan said the company has “made tremendous progress” and should generate synergies of at least $660 million in 2008. He also told investors that the company is working with major clients on piloting new services and products to be rolled out in 2008 and beyond.
It is certain that the company’s MinuteClinic business will remain an important player in the business going forward. Today, there are more than 460 clinics. Ryan noted that, while the company is in investment mode today, the in-store clinic business is expected to turn profitable in 2009.
Ryan also said he sees further opportunities within the specialty pharmacy market.
“We have some unique opportunities around specialty growth drivers. If you look at Caremark’s book of business overall we only have 60 percent penetration in specialty of existing lives so we have enormous opportunity,” said Ryan.
Gardasil vaccine recipients report extreme pain, fainting
MELBOURNE CITY, Australia New reports have shown that the Gardasil vaccine, which is given in three doses to females between the ages of 9 and 26 to prevent against a sexually transmitted virus that causes cervical and vaginal cancer, has been causing extreme pain and also has made girls faints, according to reports from Australia.
Officials at Merck, which makes the vaccine, attributes it partly to the virus-like particles in the shot. Studies showed more reports of pain from Gardasil than from placebo shots, and patients reported more pain when given shots with more of the particles. While many say the pain is short-lived, some say driving or sleeping on the injected arm is uncomfortable for up to a day after.
U.S. health officials have noticed a rise in reports of vaccine-associated fainting in girls. From 2002-04 there were about 50 reports of fainting; from 2005 until last July, there were about 230. About 180 of those cases followed a shot of Gardasil, which came on to the market in 2006.
Pfizer, Taisho announce partnership to develop schizophrenia treatment
NEW YORK & TOKYO Pfizer and Taisho Pharmaceuticals have signed a definitive agreement to replace their letter of intent for the worldwide (excluding Japan) collaboration to research, develop and commercialize TS-032, a drug candidate for schizophrenia, as well as other central nervous system disorders that is currently in preclinical development.
Under the agreement, Taisho will receive an initial payment of $22 million from Pfizer. The company will also receive milestone payments related to progress of development, as well as royalties and milestone payments tied to sales if TS-032 is approved by regulatory authorities and launched.
“We are pleased to partner with Taisho in this important area of research. Schizophrenia is among the most chronic and disabling of mental health conditions and there still remains a significant need for novel treatment advances with improved efficacy and fewer side effects,” said Martin Mackay, president of Pfizer Global Research and Development. “Pfizer has a long-standing strength in developing and commercializing medications for the treatment of psychiatric illnesses, including Zoloft, Xanax and Geodon. This agreement highlights our commitment to pursue opportunities that align strategically with our key development priorities and strengthen our pipeline.”