Bristol-Myers Squibb and Quest Diagnostics Facing Healthcare Hurdles
Lawsuits and the sluggish economy continue to affect the healthcare industry significantly this year. Here is a look at two companies dealing with those drivers:
Bristol-Myers Squibb (NYSE:BMY): Current Price $34.30
After one patient died from liver disease and several others were hospitalized during a trial for the company’s hepatitis C treatment last August, four trial subjects filed personal injury claims against Bristol-Myers Squibb and 10 more are preparing to file. Even though the pharmaceutical manufacturer halted the study immediately and took a $1.8 billion charge that quarter, the company now faces requests for medical costs and damages that surpass $500 million.
Bristol-Myers Squibb is scheduled to begin discussing claims settlements on Wednesday, according to The Wall Street Journal.
In addition to the financial strains the botched trial brought, the company suffered a setback in its drug pipeline and Bristol will have to start its efforts to enter the $5 billion global market for hepatitis C treatments anew. The often-fatal liver disease is the leading cause of liver transplants in the United States, where approximately 3.2 million people suffer from the affliction…
Quest Diagnostics (NYSE:DGX): Current Price $59.82
Quest Diagnostics’ said Wednesday that its fourth quarter results, scheduled to be released on January 23, will be affected by both economic pressures and lingering damages caused by Superstorm Sandy, which hit the east coast at the end of October.
Americans are using fewer of Quest’s medical services as the weak economy has forced consumers to cut back and prompted the government and insurers to reduce payments to laboratories, Reuters reported. As a result, the company has decided to sell its diagnostic products business and take a charge of $89.5 million, or 56 cents per share, to write off its value and that of its OralDNA products unit, which was sold in December.
The widespread power outages and disrupted transportation caused by Superstorm Sandy is also expected to bring down the company’s results. Quest announced that the damages lowered fourth-quarter earnings by 6 cents per share and its fourth-quarter revenue by $21 million. However, even before the storm hit, the diagnostic company had dropped its outlook for 2012 in response to the sluggish economy.
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