BioScrip Beats in Q3

BioScrip, Inc. (BIOS - Analyst Report) reported third-quarter earnings of 14 cents per share, beating the Zacks Consensus Estimate of 10 cents. The company reported earnings of 6 cents in the year-ago period. Although earnings were better than expected, revenues declined 7.2% to $333.5 million. While the specialty business contributed $279 million to revenues, the pharmacy benefit management (PBM) business posted revenues of $54.5 million.
 
The decline in revenues was mainly due to the elimination of the Medicare Competitive Acquisition Program and the termination of the United Health Group organ transplant and HIV/AIDS contracts. This was partially offset by increased sales of higher margin infusion therapies and other specialty sales.
 
The company reported a sequential growth of 3% in specialty sales with several therapeutic areas like iron overload, multiple sclerosis (MS), oncology and infusion therapies recording double digit growth from the year-ago period. The oral oncology business should continue witnessing strong growth going forward.
 
Meanwhile, the company is working on growing its higher margin infusion business. Management reported that BioScrip currently has infusion capabilities in 23 markets. During the quarter, BioScrip also increased its sales force from 15 to 24 and added four new infusion sales representatives in October. The expansion of the higher margin infusion business should not only drive revenues, it should also help drive top-line growth.
 
Gross profit improved to $41.5 million mainly due to an improved product mix thanks to the elimination of lower margin business and improved supply chain programs. Operating profit improved to $6.7 million due to the improved product and therapy mix, which was partially offset by bad debt expense returning to normal levels. Meanwhile, cash collections from some states remained slow due to the slowing economy.
 
The company continued to make progress with its system implementation program. BioScrip now has 15 stores operating on the new platform and the company is looking to add six more stores by year end. BioScrip expects all its stores as well as mail operations to be operational by the end of the second quarter of 2010.
 
BioScrip, Inc. is a specialty pharmaceutical healthcare organization that partners with patients, physicians, healthcare payers and pharmaceutical manufacturers to provide access to medications and management solutions to optimize outcomes for chronic and other complex health care conditions. The company’s main competitors include CVS Caremark (CVS - Analyst Report), Express Scripts (ESRX - Analyst Report), MedcoHealth Solutions (MHS - Analyst Report) and Walgreen Co. (WAG - Analyst Report).

Email	Print	Share	RSS	Rate Pos	Rate Neg	Comment