生命科學(xué)與診斷：管理團(tuán)隊的首要問題

1、Credit Suisse8 March 2019 Americas/United StatesEquity ResearchHealthcare Technology & DistributionLife Science Tools &DiagnosticsResearch Analysts Erin Wilson Wright212 538 4080Charles Lederer, CPA212 538 1822Katie Tryhane212 325 2713 George Engroff212 325 2289SECTOR REVIEWTop questions for managem

2、ent teamsWith several investor and industry conferences approaching, we have compiled a list of relevant questions and topics of discussion for respective management teams across our diverse coverage universe of Life Science Tools and Diagnostics companies, with an emphasis on the following subsecto

3、rs: PBMs/Pharmacies, Distributors, Contract Services Organizations, Clinical Laboratories, Animal Health, Dental, HCIT, Life Sciences, among others. Please reach out to our team for copies of our latest models or other requests in preparation for your meetings.IPBMs/ PharmaciesDentalICVS HealthCVSDe

4、ntsply SironaXRAYWalgreens Boots AllianceWBAAlign TechnologyALGNDiplomat PharmacyDPLODanaherDHRHenry ScheinHSIGDistributorsPatterson CompaniesPDCOAmerisourceBergenABCCardinal HealthCAHAnimal HealthIMcKessonMCKZoetisZTSOwens & MinorOMIIDEXX LaboratoriesIDXXElanco Animal HealthELANCROs /Clinical Labor

5、atoriesPhibro Animal HealthPAHCIQVIA HoldingsIQVAratana TherapeuticsPETXICON PLCICLRPetmed ExpressPETSPRA Health SciencesPRAHSyneos HealthSYNHInformation Technology & ServicesIMedpaceMEDPHMS HoldingsHMSCharles River LaboratoriesCRLPremierPINCLabCorpLHQuest Diagnostics*DGXLife Sciences / OtherIFulgen

6、t GeneticsFLGTLantheus HoldingsLNTHFiqure 1: Life Science Tools & Diaanostics Coverage UniverseSource: Credit Suisse*Covered by AJ RiceLinks to recent industry research:Generic Pricing Monitor: Cautiously optimistic or January deflation trendDental Update: Dental QTD InsightsAnimal Tracks: VMX Live-

7、Takeaways from Maraqemert MeetirqsDrue Trend Update: January prescription sales reboundState of the CRO Industry: Biotech Furdirg Analysis MixedDrug Trend Update: January prescriptions drop on tough compDISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICAT

8、IONS, LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYSTS. US Disclosure: CreditDiplomat Pharmacy (DPLO)GeneralImpetus for the recent 10-K and earnings delay? What has changed in terms of your outlook for the Specialty and PBM unit?More specifically, you recently withdrew your preliminary 2019

9、 guidance (announced in Jan). Can you further elaborate on the rationale? Why didnt you provide an updated range or any commentary to think about the extent of performance degradation in January? Specialty vs. PBM?Can you share your thoughts on the Trump Administrations blueprint and initiatives rel

10、ating to branded drug prices? You mentioned the EBITDA guide incorporates a moderated inflation assumption, but can you help us understand the impact of a lowered assumption and the exposure to lower than expected inflation in 2018/2019?How should we think about evolving rebate paradigms? A larger c

11、ompetitor announced it will launch a more transparent model in 2019 utilizing net cost pricing, do you plan on providing further transparency or adapting your model in any way to remain competitive? What exposure do you have in terms of the amount of rebates you retain?What are some of the relevant

12、risks associated with CMSs CY20 proposal for Medicare Advantage & Part D drug pricing disclosed in December? Can you also speak to potential implications from moving drugs from Part B to D, as well as the International Pricing Index (IPI) proposal for Medicare Part B?Can you speak to the potential s

13、hift to a point of sale (POS) rebate model and the implications for DPLO? What about a net price model?With Brian Griffin now onboard as CEO, how has the longer-term corporate strategy changed, if at all, specifically as it relates to your PBM strategy?Specialty SegmentYou recently announced increas

14、ingly aggressive member channel management techniques implemented by larger integrated competitors, which has contributed to a weaker January experience in Specialty. Can you provide an update on how this is progressing and help us think about the implications for the remainder of the year? What sor

15、t of measure can you take to mitigate this issue? What has changed?Oncology has certainly been a bright spot as your growth in this therapeutic category continues its rapid trajectory. Can you update us on what specifically you are doing in Oncology to establish strong physician relationships and ac

16、cess to LDDs?You previously estimated 50% of revenues are from drugs on limited distribution agreements, and 10-20% of the specialty drugs in the market are currently on limited distribution. Have these percentages changed meaningfully? Where does the company see the number trending over the next se

17、veral years? Are there any differences in the margin profiles of drugs that are distributed via LD agreements versus non-LD?Can you speak to the biosimilar opportunity and when you expect it to meaningfully manifest? What could change your outlook? Can you also talk about the puts and takes from a t

18、opline and margin perspective on increased utilization? Do you anticipate any benefit in 2019?The specialty pharmacy segment margin has been sequentially declining over the course of 2018. Do you expect this trend to continue, and what do you view as a stable or normalized margin?You announced the i

19、ntention to implement a new specialty platform (ScriptMed). How will the platform drive efficiency and what are the financial implications for DPLO?Acknowledging it is still early days, how has your new patient mobile app for specialty pharmacy patients been rolling out? What feedback are you gettin

20、g from current users? Are there any relevant metrics that youre tracking?CastiaRxIn January, you announced senior management shifts for the CastiaRx segment. Can you provide an update on your search for a head of the PBM business?You recently announced that you have lost another customer (unknown co

21、ntribution), following a customer loss announced on your 3Q call ($200 million in PBM revenues in 2019). Can you speak to the magnitude of the impact and why each of these customers have chosen to change providers as well as potential remediation measures you have underway to prevent further custome

22、r losses? How should we think about the profit implications / mix?What visibility do you have on customer losses and do you expect any more churn anticipated this year? Can you also speak to the selling season traction, seasonal contract dynamics, and potential offsetting factor?Can you speak to how

23、 we should think about the profitability for the PBM? Remind us of your key profit drivers across this segment. Can you provide color on your targeted LT profit profile for CastiaRx?DPLO has previously spoken to adding PBM-like services for managed care customers (e.g. formulary management, prior au

24、thorization management). How well are you able to support these services? How do the recent PBM acquisitions fit with this strategy?You spoke to beginning the process of moving PBM patients on LDDs to Diplomat specialty during your 2Q call. Can you further characterize the cross-selling opportunitie

25、s with CastiaRx and the legacy Specialty business? What sort of opportunity exists there within the current customer base?Can you speak to how the RFP process is progressing and you conversations with health plans? How is CastiaRxs specialty-focused strategy resonating?From a pharma manufacturer per

26、spective, do you envision any conflicts of interest in access to LDDs or other relationships with now an in-house PBM offering?Can you speak to the different types of models and pricing structures (e.g. traditional, fee for service, etc.) you currently utilize with customers and the traction for eac

27、h? Exposure to government vs. commercial?How is the competitive landscape shaping up for middle-market PBMs in light of pending major vertical mergers?Capital DeploymentIs deleveraging still the greatest priority? How should we think about debt pay down over the balance of the year and in 2019, and

28、what is your timeframe to get to the net leverage target of 2-3x?Outside of deleveraging, can you provide an update on capital deployment priorities? When should we expect DPLO to re-engage in M&A and what does the M&A pipeline look like? Future PBM deals?DistributorsAmerisourceBergen (ABC)GeneralHo

29、w do you view the recent HHS proposal to remove safe harbors for rebates, and how could this impact you, either directly or indirectly?Visibility on the generic pricing environment?How should we think about the potential implications of Part B drugs becoming Part D, and other concepts such as specia

30、lty step therapy across your specialty business?Could you provide an update on your efforts to implement differential pricing strategies across varying product types?You mentioned that your assumption for brand price inflation is MSD. How should we be thinking about the branded inflation environment

31、 for the year?While you say that we shouldn*t expect the New York Opioid expense to be a recurring one, should we think about New York as a proxy for potential impact from opioids in other states? What is embedded in guidance as it relates to opioids? Visibility?Can you give us an update on your rel

32、ationship with WBA and what a potential more formal alignment would add for you? Where would there be potential dis-synergies (i.e. independent pharmacy relationships)?What derivative impact are you expecting from the WBA/RAD store purchase transaction, if any? Will the increased purchasing volume h

33、ave an impact on your distribution economics?With the WBA/RAD store purchase transaction and as that volume transitions to ABC, what would be the impact on your working capital?Amazon has formally entered the Healthcare Supply Chain Services continuum with its recent purchase of P川Pack. What are you

34、r thoughts on how Amazon will impact the industry, and more specifically, what impact do you see for ABC? Update on current supply relationship with ABC?As it relates to your diversification strategy, what are your strategic focuses in expanding either your current offerings (e.g. MWI, World Courier

35、) or into other service offerings? Do you expect these efforts to be organic or inorganic? Can you speak to the role ABC would like to take in managing clients access and net price?What percent of revenues and operating profits now stem from businesses outside of core distribution and are supply cha

36、in business models evolving? Where does this metric go over the next 3-5 years?Pharmaceutical SegmentAre you concerned at all around a potential irrational sell-side environment, given recent contract re-pricing commentary from Cardinal Health?In regards to PharMEDium and potential future revenue ru

37、n rates, has underlying industry growth remained robust for these products and services while youve been out of the market? And do you think youre still maintaining good relationships with customers during the extended closure? How big of a headwind is PharMEDium to the Pharma EBIT in 2H CY19? Growt

38、h expectations for the remainder of the year?Update on your commitment to PharMEDium? Consulting firms opinion? Can you remind us of the inherent synergies with your base business?Could you provide color on how PharMEDium DOJ discussions are going?Can you comment on the state of contract renewals an

39、d current conversations you are having with customers? Any major contracts up near term?We have heard now for some time from a number of industry constituents about the ongoing move away from contracts that depend, to some degree, on drug price inflation as an essential component of the overall comp

40、ensation picture. What is the split of the overall gross profits you generate from drug distribution that comes from fixed contracts versus variable? Is it correct to assume you are pursuing a strategy to change that mix towards 100% FFS over time?Seeing as FFS agreements can be based on the total p

41、harmaceutical spend managed for a manufacturer, profitability of these contracts still depend, to a degree, on inflation even as you move away from contracts more directly tied to the metric. When we think about the relative importance of some branded inflation compared to what you are able to gener

42、ate on generic drugs, how would you help us frame those two buckets in terms of their importance to gross profit?Can you provide your view on recent announcements by manufacturers to resume price increases? Do you view this trend will continue? To what extent do you view these actions will drive bra

43、nded price inflation lower? What are the implications?How do you compare capital efficiency of your generic sourcing capability relative to those of your competitor? (i.e. WBAD vs. Red Oak and ClarusONE)What kind of impact has ESRXs entrance into WBAD had on your gross margin? Are you realizing the

44、full benefit of WBAD, or do you view there is room for improvement as it relates to generic purchasing? What more can you do with WBAD?How is the HD Smith (HDS) integration progressing? What core customer groups did HDS add, and can you characterize and quantify expected cost synergies overtime?Can

45、you speak to your strategy and longer term potential in specialty, which you define as the distribution of oncology and physician-administered drugs? Biosimilar opportunity?Other SegmentCan you provide an update on the Lash Consulting, and the progress on Fusion implementation? What factors are driv

46、ing implementation costs higher than anticipated, and why is the account migration taking longer than expected?Can you speak to the longer term potential of Lash Consulting in terms of strategic positioning, topline growth, and profit trajectory? Can you also touch on the reception of Fusion impleme

47、ntation, and how you expect that to drive growth, if at all?In Animal Health (MWI), are you seeing any changes in the demand trends for the companion and production animal markets? Update on your expanded relationship with Mars?What are the implications, in your view, of the Henry Schein spin and me

48、rger with Vets First Choice?Does your guidance reflect any meaningful changes to Animal Health vendor contracts?Update on World Courier growth, profit prospects?Cardinal Health (CAH)Pharmaceutical distributionWhen do you think we can expect a return to profit growth in the core pharma segment?You ar

49、e forecasting a meaningful ramp in profit growth in 2H19. Can you explain the primary drivers?Can you speak to the factors that are negatively impacting profit trends over the next fiscal year? How big of an impact is the Optum repricing as well as other contract repricing across the market, particu

50、larly as you expect to see a larger portion of contracts enter the repricing process in FY19 than in typical years?With the CVS contract coming up at the end of June, can you provide an update on how those conversations are going? What sort of derivative impact may you see from its acquisition of Ae

51、tna?Can you speak to the generic deflation environment? Would you characterize it as stable? To what extent is generic deflation a headwind to profit growth in FY19? Implications of Scott Gottliebs resignation?How would you characterize a steady state rate of generic deflation where regulatory barri

52、ers such as FDA backlog approval are not influencing buy side pricing dynamics? Would you say high single-digit or even low double-digit deflation is sustainable or will enough manufacturers drop out of the market at those rates?What opportunities do you see to further leverage your Red Oak sourcing

53、 JV with CVS? What are some other ways that you can add value to your strategic partner besides generic purchasing? Do you anticipate any major changes to the relationship when it comes up for renewal in 2019?Can you speak to your exposure to brand drug price inflation and the implications of a lowe

54、r than expected inflation environment? What is modeled into expectations?With the ongoing move away from contracts that depend on drug price inflation as an essential component of the overall compensation, can you give us an idea of the split of the overall gross profits you generate from drug distr

55、ibution that comes from fixed contracts versus variable? Are you pursuing any corporate strategy to change that mix going forward?Can you provide an update on your discussions with manufacturers and pharmacies as it relates how you would be compensated in a world with meaningfully lower drug prices

56、or the elimination of rebates? How quickly would you be able to adjust relevant contracts?What would be the implications for CAH if all rebates move to the point-of-sale (POS)?MedicalYouve recently announced that you are conducting a full strategic review of your portfolio. Can you provide an update

57、 on your thoughts for the Medical business and commitment thereon?Weve seen a close competitor in the medical-surgical distribution space recently face significant pressure (OMI). Can you speak to underlying medical distribution growth you competitive positioning in the market?Can you speak to your

58、global efforts that led to the large inventory write-off at Cordis? What are you doing to prevent similar write-offs in the future?Can you talk about Cordis initiatives under Pat Holt (new head of Cordis) and Jon Giacomin (Medical segment CEO)? What types of changes are you expecting, and how much p

59、rogress have you made thus far? Can you help us understand your trajectory toward profitable growth by the end of FY19? What is your LT vision?What is the latest on the integration of the Medtronic Patient Recovery business? How is it tracking, and what products/markets have performed differently fr

60、om your expectations?Can you provide an update on continued supply disruptions for exam gloves, and when do you expect this to subside? Can you speak to fundamental demand trends and key drivers across your medical business?Youve spoken to commodity pressures impacting the Medical segment margins in