More Videos
- The Emails Fly On GM, Ford CEO's Corporate Jets
- Merck Offering To Help Patients—Or Itself?
- GM, Ford & Chrysler CEOs Take Their Medicine
- Daschle's Dollars From Lawyers, Not Pharma
- AstraZeneca Provides Zest and Zeal For OSI Pharmaceuticals
- Novo Nordisk "Raises" Price On Treating Diabetes
- Carl Icahn: Can He Come To Amylin's Rescue?
- Merck Rolls The Dice On Januvia
- Merck's Marketing Challenge: Gardasil For Guys
- Pharma And The Financial Crisis
- Pops & Drops: Hewlett-Packard, JP Morgan & Air Wagoner
- Mad Money Green Week: Owens Corning
- Fast & Furious: It's All About Soup
- Web Extra: The Trade on Walmart and RIMM
- Chartology: Grossly Oversold and Favoring the Upside
- The "Armageddon" Gameplan
- What's Next for Citigroup?
- What to Expect From a Geithner-led Treasury
- Value Trading Opportunity of a Lifetime?
- HP Earnings: How Much Will "Hurt" From Economy?
- Obama Warns On Economy: Works On Stimulus Plan
- Citigroup's Ills May Signal Market Isn't Near Bottom
- US Inflation Bonds Hit by Deflation, May Recover
- Pros Say: Market Will Drop 5-10% — Ford Will Boom
- Bonds Drop on Profit-Taking, Geithner Move
- Jack Welch on Detroit: Let Them Go Bankrupt
- Bank Shareholders Face 'the Unthinkable': El-Erian
- Heinz Profit Rises, Thanks to Hedging
Text Size 
 |
AP |
] are trimming their loses and heading back into positive territory at this writing.That turnaround could be from the dissemination of a research note from Wachovia biotech analyst George Farmer. He writes that Medicare could soon announce that it may reconsider its recent decision to curtail how much it will pay for Amgen's anemia drugs in cancer patients (also known as reimbursement levels).
Aranesp and Epogen make up about half of Amgen's revenue and nearly as much of its bottom line. The anemia drugs from AMGN and Johnson & Johnson [JNJ
Loading...
()
] represent the largest single drug-class spend by Medicare. And the budget-conscious program is looking for areas to save money, especially in the wake of reports that overuse of the drugs could be putting patients' lives at risk.
You may recall, Congress recently passed an unprecedented resolution urging Medicare to revisit its decision. While Amgen and JNJ certainly lobbied for it, analysts say it was cancer doctors, specifically the American Society of Clinical Oncology (ASCO) that wielded the most influence on this on Capitol Hill. A spokesman for Medicare told CNBC a couple of weeks ago that the agency would take the resolution under consideration, but many analysts did not think the bill would ultimately change anything.
Well, this morning Farmer is telling clients that Medicare "is heavily considering the possibility of reconsidering the…reimbursement in oncology settings. An announcement regarding such could occur within the next couple of weeks, which we believe should be a short-term positive for the stock." But he also cautions that the "process could take months to complete" because Medicare will probably send the issue to an advisory committee and that a reversal by Medicare is still not a certainty because it's never done it before. Nonetheless, he's raising his 12-month "valuation range" to between $56-$60 from $54-$58. Wachovia maintains a market in AMGN.
Besides Medicare, we are also waiting for the FDA to weigh in on potentially placing new limits on the use of the anemia drugs in cancer patients.
Questions? Comments?
Del.icio.us
Digg It
Data is a real-time snapshot *Data is delayed at least 15 minutes