Flu impact on February sales negligible, Walgreens reports
DEERFIELD, Ill. — Walgreens’ February sales fell short of analyst projections due to a sharper impact from generic drug introductions. Walgreens on Tuesday reported sales in total comparable stores decreased by 0.6% in February. Generic drug introductions negatively impacted total pharmacy comparable sales, which were flat, by 600 basis points, Walgreens reported.
Prescriptions filled at comparable stores increased by 6.5% in February. Prescriptions filled at comparable stores were positively impacted by 10 basis points due to the higher incidence of flu in this year’s February. However, neither flu shots nor flu incidence had an impact on comparable store sales.
Credit Suisse research analyst Ed Kelly had projected Walgreens would realize growth of 10% in prescriptions filled, fueling a 2% lift in total same-store sales for the month of February, vs. the 6.5% growth in prescriptions filled and a 0.6% drop in total comp sales that Walgreens reported. "We expect script growth to be driven by an estimated 450 basis points positive impact from returning [Express Scripts] customers and 200 basis points of benefit from flu," Kelly shared in a Feb. 26 research note. "[Net] generics/pricing is expected to have a negative 550 basis points impact on dollar comps."
Walgreens did not identify the specific lift in pharmacy same-store sales attributed to returning Express Scripts patients, only noting that the number of Express Scripts patients "continued to increase in February on a flu-adjusted basis." Walgreens reported there was no impact on comparable pharmacy sales or total same-store sales, positive or negative, resulting from the flu in February. And the Chicago retailer reported a negative 600 basis point impact from generic drug introductions.
February sales for Walgreens totaled $5.6 billion, a decrease of 2.2% as compared to the same month in fiscal 2012. However, excluding last year’s February leap day, February sales increased 1.5%, Walgreens reported. Comparable store sales are not impacted by the extra day in February 2012.
February pharmacy sales decreased by 2.1%, but when excluding last February’s leap day pharmacy sales were actually up 2%, Walgreens noted.
Flu shots administered at pharmacies and clinics season-to-date were nearly 7 million versus 5.5 million last year. Pharmacy sales accounted for 61.9% of total sales for the month.
Total front-end sales decreased 3.1% and were flat when excluding the 2012 leap day. "Drug store front-end sales continue to be pressured by a weak consumer, facing headwinds from increased fuel prices and the payroll tax cut," Kelly suggested. Walgreens’ comparable store front-end sales decreased 1.4%, while customer traffic in comparable stores decreased 4.9% and basket size increased 3.5%.
Registrations for Walgreens Balance Rewards loyalty program, which launched in September, totaled nearly 60 million through February.
Walgreens reported total sales for the second quarter of fiscal 2013 ended Feb. 28 totaled $18.6 billion, down 0.1% the second quarter of fiscal 2012. Fiscal 2013 year-to-date sales for the first six months were $36 billion, down 2.3%, while calendar year-to-date sales totaled $11.9 billion, an increase of 2.2%.
Walgreens opened 11 stores during February, including five relocations, and closed one.
FDA accepts application for NSAID painkiller
PHILADELPHIA — The Food and Drug Administration has accepted a regulatory application for a new painkiller from Iroko Pharmaceuticals, the drug maker said Monday.
Iroko is seeking approval for a lower-dose, submicron diclofenac, a non-steroidal anti-inflammatory drug for treating mild to moderate acute pain in adults.
"The FDA’s acceptance of our first [new drug application] filing for lower-dose submicron diclofenac is an important milestone for Iroko," Iroko president and CEO John Vavricka said. "Our goal is to address the significant unmet need in pain management by bringing new options to patients and physicians. We look forward to working closely with the FDA during the review process."
Reports: FDA investigating more than two-dozen compounding pharmacies
NEW YORK — The Food and Drug Administration will inspect about 30 compounding pharmacies that it has deemed "high risk," according to published reports.
Businessweek reported that the FDA started visits to the pharmacies started last month and would continue for the next two months. So far, unsanitary conditions were found at pharmacies in Chicago, Florida, Arkansas and Mississippi.
Regulators have placed greater scrutiny on compounding pharmacies following a nationwide outbreak of fungal meningitis linked to contaminated injectable steroids produced at the New England Compounding Center in Framingham, Mass. So far, the epidemic has sickened 720 people in 20 states, leading to 49 deaths, according to the Centers for Disease Control and Prevention.