FBR Analyst Comments on Skirmish Between Express Scripts (ESRX) and Horizon Pharma (HZNP)

FBR Capital analyst Steven Halper doesn't think Express Scripts' (NASDAQ: ESRX) skirmish with Horizon Pharma (NASDAQ: HZNP) will be an issue for the company, and he said operations may benefit if manufacturers move away from working with smaller specialty companies.

Earlier Express Scripts removed specialty pharmacy Linden Care from its network, calling it a captive pharmacy of Horizon. Horizon Pharma responded by calling its actions "profit driven."

"Yesterday, several news outlets reported that Express Scripts terminated its relationship with Linden Care, a specialty pharmacy company with ties to Horizon Pharma. Express Scripts and other pharmacy benefit managers (PBMs) have recently removed other specialty pharmacies from their network with potential conflicts of interest (i.e. Valeant/Philidor). In response, Horizon attacked ESRX and pharmacy benefit managers, with arguments that, in our view, are not new at all," said Halper.

"We continue to believe that specialty pharmacy serves an important role in the pharmaceutical supply chain as they help patients deal with complex drugs and help payers manage drug costs. Specialty pharmacy operations of both Express Scripts and CVS Health (NYSE: CVS) should benefit, if manufacturers move away from working with smaller specialty companies. While not always the most transparent business model, PBMs continue to drive competition among drug manufacturers, which ultimately benefit patients, payers and employers," added the analyst.

For an analyst ratings summary and ratings history on Express Scripts click here. For more ratings news on Express Scripts click here.

Shares of Express Scripts closed at $88.53 yesterday.

You May Also Be Interested In

• Morgan Stanley Upgrades QIAGEN NV (QIA:GR) (QGEN) to Overweight
• Jefferies Starts UzNIF (UZNF:LI) at Buy
• UBS Starts Compass Gas e Energia SA (PASS3:BZ) at Buy