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The Zacks Analyst Blog Highlights: Humana, Novo Nordisk, Merck, Bristol-Myers and Sanofi

Zacks Equity Research

For Immediate Release

Chicago, IL – November 30, 2012 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Humana Inc. (HUM), Novo Nordisk (NVO), Merck (MRK), Bristol-Myers’ (BMY) and Sanofi (SNY).

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Here are highlights from Thursday’s Analyst Blog:

Humana Upgraded to Neutral

We have upgraded our recommendation on Humana Inc. (HUM) to ‘Neutral’ from ‘Underperform’ on the back enhanced membership, earnings and Medicare coverage driven by strategic acquisitions and alliances.  Improved 2012 earnings guidance also provides optimism. Strong financials and sturdy ratings are the other positives.

Humana’s third-quarter 2012 operating earnings per share outperformed the Zacks Consensus Estimate by nearly 18%. The company expects to deliver earnings in the range of $7.25–$7.35 per share in 2012. It raised the expectation from $6.90–$7.10 per share guided earlier mainly due to favorable development in the prior-year medical claims reserve and enhanced results in the stand-alone prescription drug plan business.

Humana has maintained a strong cash and short-term investment position over the past several years. The company has been utilizing its excess cash to repurchase shares, pay dividends or for other corporate purposes.

Additionally, with the acquisition of Arcadian, SeniorBridge, Concentra and MD Care, Humana has increased its focus on its core business as a health care provider, expanded its Medicare coverage, enhanced the quality of its healthcare services, expanded its provider network in various regions and reduced its exposure to health care overhaul regulations. The deal to buy Metropolitan Health, announced in November 2012, will add 35 state-of-the-art primary care medical centers to Humana’s primary care network.



Novo Reports Positive Victoza Data


Novo Nordisk (NVO) recently announced data from the post-hoc analysis of two phase III b studies on Victoza (liraglutide) in patients suffering from type II diabetes. While one study evaluated patients treated with Victoza versus those treated with Merck’s (MRK) Januvia, the other evaluated patients on Victoza versus those on Bristol-Myers’ (BMY) Byetta.

Results from the studies showed that a higher number of patients achieved the study target (HbA1c<7%) for the first time at each time point (12, 20 and 26 weeks of treatment) on being treated with Victoza (once daily) versus Januvia (once daily) or Byetta (twice daily).

Novo Nordisk also reported data from another post-hoc analysis in type II diabetes patients. The results from the analysis showed that a higher proportion of patients on Victoza and metformin, with baseline HbA1c less than 8.0%, achieved HbA1c targets than those on Januvia and Byetta.

We note that Victoza is a once-daily human glucagon-like peptide-1 (GLP-1) analogue approved for improving blood sugar (glucose) levels in adult type II diabetes patients along with lifestyle management. The drug is approved and launched in more than 50 countries including the US.

We note that the GLP-1 market is getting pretty crowded. Existing companies in this market include Merck, Bristol-Myers and Sanofi (SNY), among others.


Our Recommendation

We are encouraged by the performance of Victoza in the US and Europe since launch. Victoza revenues were up 74% year over year in the first nine months of 2012.

We have an Outperform recommendation on Novo Nordisk. The stock carries a Zacks #1 Rank (Strong Buy rating) in the short term.

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Read the analyst report on HUM

Read the analyst report on NVO

Read the analyst report on MRK

Read the analyst report on BMY

Read the analyst report on SNY

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