Healthcare Business Recap: Herbalife, Allergan and More

Shares of Smith & Nephew (NYSE:SNN) rise sharply as its first quarter trading profit, boosted by knee replacements and wound care, of $252 million compared to $241 million year-to-year becomes known. Earnings per share of $0.195 were in-line, and exclude restructuring and acquisition costs. In addition, revenue increased from $1.06 billion to $1.08 billion, which was also in-line with estimates.

Health Net (NYSE:HNT) shares fall over the cliff, following the firm’s first quarter results released early Thursday. Improved premiums revenue and a higher Medicaid enrollment were outweighed by a last-moment jump in commercial claims. In response, Health Net had to lower its full-year estimate for earnings, which now represents a range between $2.35 and $2.50, much below the previous forecast $3.30 to $3.40.

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Genomma Lab announces that it won’t acquire household cleaning products supplier Prestige Brands (NYSE:PBH),causing the latter’s shares to trade considerably lower. The would-be buyer explained that Prestige was demanding a higher purchase price before discussions could be continued.

CEO Michael Johnson of Herbalife (NYSE:HLF) is currently the highest paid of any of his peers, thanks to a shareholder return that is up 870 percent over the past three years. Research GMI reports that Johnson received total compensation of $89.4 million in 2011, which included a profit of $77 million from options.

Wednesday’s first quarter miss by Allergan (NYSE:AGN) triggered a 6 percent selloff, which the company says was overdone. Shares were up 1 percent on Thursday, perhaps assisted by comment by Susquehanna, that AGN ‘adequately explained its shortcomings and expects to see growth accelerate through the remainder of the year’. Adding to that, Jefferies considers that the valuation is still relatively high, and that shares are trading at approximately 20 times estimates, compared to peers at 12 times.

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