The early introduction of several top-selling generic medicines and a steady increase in prescription mail orders helped to fuel Medco Health's third-quarter earnings, which rose 16 percent over last year.
The Franklin Lakes-based company, one of the nation's leading pharmacy benefit managers, said the number of generic prescriptions it filled hit a record 60.3 percent as a result of the earlier-than-expected release of generic versions of the cholesterol-fighting drug Zocor and the anti-depressant Zoloft.
Executives expect the momentum will continue through the end of the year. During a conference call with Wall Street analysts yesterday, Medco Chief Financial Officer JoAnn Reed increased full-year earnings guidance.
Reed said she expects 2007 profit to fall within the range of $3.55 to $3.60 per share, up from an earlier estimate of $3.50 to $3.55. The revised earnings for next year are expected to fall between $4.29 and $4.41 per share.
Wall Street applauded the company's results. Shares rose in heavier-than-usual trading.
The generic version of the blood pressure medicine Toprol XL and a growing number of generics purchased through the Medicare Part D prescription plan also helped to lift Medco's overall generic dispensing rate. The dispensing rate essentially reflects the percentage of total prescriptions filled by a lower-costing generic medicine.
The company's quarterly revenues were bolstered by increases in the number of mail orders Medco received for prescription drugs. The volume of mail orders increased 5.4 percent, to 23.5 million.
Accredo Health Group, the company's specialty pharmaceutical business, also saw third-quarter revenue surge, to nearly $1.5 billion, up 11 percent from $1.35 billion for the same period last year.
For the quarter, Medco's earnings reached $214.7 million, or 78 cents a share, compared with $185.8 million, or 62 cents a share, the company said yesterday. Revenue was $10.9 billion, a 4.4 increase over the previous third quarter, when the company's revenue reached $10.4 billion.
In a conference call with analysts, Chief Executive David Snow said he expected the integration of PolyMedica, a former partner Medco acquired in August for $1.5 billion, to unfold smoothly -- and quickly. The acquisition is expected to help Medco build more business in the care of diabetic patients
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