Yahoo Finance’s Anjalee Khemlani joins the Live show to break down the decline in stock for CVS following first-quarter earnings and discuss the leading health solutions company’s recent acquisitions.
Video Transcript
JULIE HYMAN: We've got more earnings to talk about. CVS out with a beat on the top and bottom line, but the stock is slipping on a cloudy earnings outlook as it ponies up the cash for major acquisitions.
Yahoo Finance's Anjalee Khemlani is here with the details. Hi, Anj.
ANJALEE KHEMLANI: Hey. Yeah, that's right. So CVS, as we know, making big moves recently and specifically talking about those acquisitions, Signify and Oak Street Health. Those are the two that came in in the first quarter. Specifically Oak Street Health coming in earlier than expected. That was supposed to close later this year. So that is where part of the hit is coming from as well as its long-term care that it was set to unload or said that it wanted to unload late last year. So that's sort of the negative part of it.
Now also on the positive side, we see that the revenues are up 11% quarter over quarter, and we've seen a reorganization of the company. It's quite interesting how they're going to be folding in these two new acquisitions. So we know CVS with the MinuteClinic as well as the pharmacy, but it's all going to be shifting now.
So MinuteClinic gets swooped over into a new category called health-care services. That is going to include Signify, Oak Street, as well as what the PBM service, which is previously Caremark. That's an interesting combination. The insurance side with legacy Aetna as well as their Medicare Advantage, and then pharmacy and wellness will include the traditional pharmacy and the storefront as well as their infusion-therapy service.
So a lot of changes there on how going to be reporting. A lot more heads of state, if you will, coming into the fold for the company. So going to be interesting to see how the rest of the year pans out on that.
BRAD SMITH: While we've got you here with us, also in the health space right now, Eli Lilly seeing some promising results of its experimental drug for Alzheimer's.
ANJALEE KHEMLANI: Yes.
BRAD SMITH: What do we know about this so far?
ANJALEE KHEMLANI: So what we know so far is that it did do a better job in terms of the results that they saw from the clinical trials in comparison to Biogen, which we know is also pursuing in this space. Now, the difference is, though, is that while their numbers were a little bit higher-- I believe it's 29% more effective-- they do have some concerns over the brain swelling of two patients. Two patients died in this trial and the third one, potentially from the same cause. So there's still some deep dive that needs to be done. The results are just coming from the press release. They have not yet been peer reviewed. So that's where some concern comes from.
But again, Lilly entering the space where we know Biogen already is, and it could really create some competition from the market right now.
JULIE HYMAN: Yeah, definitely, which hopefully in the end will be good for people who need treatment--
ANJALEE KHEMLANI: Absolutely.
JULIE HYMAN: --for this serious disease. So thank you so much.
