Express Scripts Shares Fall After Full-Year Forecast Is Cut

Apr 30, 2014 4:14 pm ET

(Updates with closing shares in the second paragraph.)

April 30 (Bloomberg) -- Express Scripts Holding Co., a pharmacy benefit manager that handles more than 1 billion prescriptions a year, fell the most since 2012 after the company cut its full-year forecast and said it received subpoenas regarding its relationships with drugmakers.

Express Scripts declined 6.2 percent to $66.58 at the close in New York, the biggest single-day drop since Nov. 6, 2012. Shares of the St. Louis-based company have gained 12 percent in the past 12 months.

Full-year earnings are now expected to be $4.82 to $4.94 a share, excluding one-time items, the company said in a statement yesterday, compared with a previous outlook of $4.88 to $5.00. Express Scripts also said it received subpoenas regarding investigations into its contracts and relationships with drug companies including Pfizer Inc., AstraZeneca Plc and Biogen Idec Inc.

Express Scripts disclosed the February, March and April requests for information from three different agencies in a U.S. regulatory filing. The company manages drug benefits for insurers, employers and government health plans and sell medicines through its mail-order pharmacy, servicing as a middlemen between patients and drugmakers.

Express Scripts said it is cooperating with the investigations and isn’t able to predict the timing or eventual results of the inquiries.

Requests for Information

The U.S. Department of Justice from the District of Rhode Island in February asked Express Scripts for information about its contractual arrangements with Pfizer, Bayer EMD Serono and Biogen regarding the drugs Betaseron, Rebif and Avonex.

A month later, the Attorney General of New Jersey asked for information on its arrangements with AstraZeneca regarding Nexium. Earlier this month, the U.S. Labor Department’s Employee Benefits Security Administration queried the company about its client relationships from 2009 to the present.

The New Jersey and Labor Department requests also covered the actions of Medco Health Solutions Inc., which Express Scripts bought in 2012.

First-quarter profit of 99 cents a share missed the $1.01 average of 24 analysts’ estimates compiled by Bloomberg. The earnings were lower than forecast because of a decrease in prescription drug volume during the quarter’s severe winter weather, later-than-expected enrollment in public health-care exchanges and fewer new patients, Express Scripts said yesterday.

Net income fell to $328.3 million, or 42 cents a share, from $373 million, or 45 cents, a year earlier, the company said.