90% of Horizon's Net Rev comes from this CVS news (not good)
"Shares of specialty drugmaker Horizon Pharma (NASDAQ:HZNP) were down 30% on the stock market today after two major pharmacy benefit managers removed its drugs from their formularies.
Horizon disclosed in an SEC filing that Express Scripts (NASDAQ:ESRX) and Caremark, CVS' (NYSE:CVS) PBM division, are removing its drugs Duexis and Vimovo from their formularies as of August and will place the drugs on their exclusion lists at the start of next year.
Horizon said this could hit 20% to 30% of the sales of the two drugs, which account for more 90% of Horizon's net revenue.
The filing didn't give the PBMs' reasons, but the moves might have to do with the fact that both drugs, which treat arthritis pain and ulcers, are combinations of drugs that can be found separately elsewhere. Horizon has achieved booming sales growth through a combination of aggressive marketing and price increases, leading to a strong IBD Composite Rating of 89. But PBMs are always looking for ways to cut costs for their health-insurer customers.
Horizon said the move shouldn't affect 2014 financials, which call for a near-quadrupling of sales due to volume growth as well as recent acquisitions. Horizon acquired Vimovo from AstraZeneca (NYSE:AZN) last November and bought Vidara Therapeutics earlier this year.
The company said it would not provide 2015 guidance until the fourth quarter, and in the meantime will "accelerate our patient and physician focused commercial model to focus prescriptions through other channels such as our Prescriptions Made Easy ("PME") program, continue working with many of the more than 60 other PBMs and evaluate price increases."