Xerox To Book $385M Charge Over Failure To Complete Medicaid Payment Systems In Calif., Mont.
In other health industry news, Johnson & Johnson beat third-quarter profit forecasts, Centene's proposed acquisition of Health Net gets some support and GHO Capital Partners will buy a specialist testing company, DNA Diagnostics Center.
The Associated Press:
Xerox Books $385M Charge Over State Medicaid Contracts
Xerox will book a pre-tax charge of around $385 million in the third quarter, after the business services and copier company announced that it will not complete the implementation of new Medicaid payment systems for Montana and California. The Norwalk, Connecticut, company said Tuesday that it will still process Medicaid claims in those states using existing systems to avoid interrupting any services. (10/13)
J&J Beats Profit Forecasts Even As Drug Sales Lag Estimates
Johnson & Johnson beat analysts’ estimates for third-quarter profit as a lower tax rate helped the world’s biggest maker of health-care products overcome slightly weaker-than-projected sales for key drugs such as Remicade. J&J has been investing heavily in building up its pharmaceutical business as other products, such as medical devices, face pressure to compete on price to retain customers. The company fell short in the third quarter on several of its top drugs. Arthritis treatment Remicade had revenue of $1.61 billion, compared with expectations for $1.68 billion of sales, while blood thinner Xarelto’s $461 million in sales missed the $468.5 million average projection. Psoriasis drug Stelara was an exception, bringing in $613 million, more than the $586.5 million average estimate. (Koons, 10/13)
The Wall Street Journal:
Centene Says Glass Lewis, ISS Back Health Net Acquisition
St. Louis-based Centene, a Medicaid-focused health insurer, is looking for the deal to boost its presence in California and other western states, while allowing for $150 million a year in synergies in the second year after closing. Health Net shareholders will receive 0.622 shares of Centene and $28.25 in cash for each share held. (Minaya, 10/13)
GHO Capital Buys DNA Diagnostics Center For $118M
GHO Capital Partners, a London-based investor in health-care assets, is buying specialist testing company DNA Diagnostics Center Inc. of the U.S. for 104 million euros ($118 million), according to a statement from the company. DDC, based in Fairfield, Ohio, makes DNA tests for paternity, immigration, veterinary and forensic cases, among others. GHO Capital plans to help the company, which employs 245 people, mostly based in the U.S., “grow enormously” in Europe, Mortimer said. No further details of the deal were disclosed. (Torsoli, 10/13)