Horizon Pharma plc (HZNP - Free Report) recently announced that it has entered into a settlement agreement and mutual release with Express Scripts Holding Company (ESRX - Free Report) to settle litigation pending in the Delaware Superior Court, Newcastle County.
In Nov 2015, Express Scripts had filed a suit against Horizon Pharma for violation of contract seeking payment worth $166.2 million in rebates, related to Duexis, Rayos and Vimovo.
According to the settlement agreement, Horizon Pharma will pay $65 million to Express Scripts. The amount will be paid in installments – 50% in the fourth quarter of 2016, and 25% each in the first and second quarters of 2017. In addition, both companies will be released from claims related to the litigation without having to admit to any fault or wrongdoing.
Horizon Pharma stated that the payment will be recorded as a reduction in net sales in the third quarter of 2016.
We remind investors that in Aug 2016, the company announced that it has secured covered status for Duexis and Vimovo with CVS/Caremark. The company was informed that beginning Jan 1, 2017, both Duexis and Vimovo will be removed from the CVS/Caremark exclusion list. The company is currently holding discussions and negotiations with other pharmacy benefit managers and payers to increase patient access to clinically relevant primary care medicines.
In a separate press release, Horizon Pharma announced that it has inked a rebate agreement with Prime Therapeutics. The deal secures formulary status for Horizon Pharma’s primary care medicines. The agreement came into effect on Oct 1, 2016.
Both Horizon Pharma and Express Scripts carry a Zacks Rank #3 (Hold).
Stocks to Consider
A couple of better-ranked stocks in the health care sector include Ariad Pharmaceuticals Inc. and Anika Therapeutics, Inc. (ANIK - Free Report) . All of the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Ariad has posted a positive earnings surprise twice in the last four quarters with an average beat to 153.54%. The company’s share price has surged 122.2% year to date.
Anika Therapeutics’ earnings estimates for 2016 and 2017 were up a respective 9.5% and 11.5% over the last 60 days. The company’s earnings have beaten estimates in each of the last four quarters with an average beat of 42.19%. Its share price has jumped 25.7% year to date.
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