Latest news with #SriparnaRoy
Yahoo
2 days ago
- Business
- Yahoo
UnitedHealth signals prolonged pain with new, far lower profit forecast, shares fall
By Sriparna Roy and Sneha S K (Reuters) -UnitedHealth Group provided a full-year profit forecast on Tuesday after suspending its prior outlook in May, revealing billions of additional costs the company will face in the upcoming quarters. The health insurer projected full-year adjusted earnings per share of at least $16, well short of analysts' already diminished estimates, while second-quarter profit also missed Wall Street expectations. "While the $16 EPS floor was lower than expected, it does give investors/analysts a base to model off of, and potentially sets up UNH to return to the 'beat and raise' cadence that its investors had become accustomed to," said James Harlow, senior vice president at Novare Capital Management. Company executives attributed the shortfall to higher medical costs than it had expected and other poor planning. It now sees medical costs for the year coming in $6.5 billion higher than initially projected. "We significantly underestimated the accelerating medical trend and did not modify benefits or plan offerings sufficiently to offset the pressures we are now experiencing," said Tim Noel, the new CEO of the company's UnitedHealthcare health insurance unit. UnitedHealth shares were down nearly 5% on Tuesday. They have fallen more than 40% this year. UnitedHealth and other insurers have been hit hard this year by elevated medical costs. The company's underperformance led to the abrupt departure of CEO Andrew Witty in May. Stephen Hemsley, who returned as chief executive, is under pressure to regain investor trust as the company faces financial struggles and reputational damage that surfaced after the then-CEO of its health insurance unit was gunned down on a New York City street in December. "This is a challenging year for our enterprise. But I feel strongly we can overcome these challenges, as we have done before," Hemsley said in a call to discuss the results and forecast. Underperformance of its Optum pharmacy benefit manager, which also provides financial consultation and other services, added to issues the company must address. Optum's quarterly revenue fell 7%, hurt by legacy customer contract revisions. The company said the unit's 2025 profit will be $6.6 billion below its own expectations. "There are areas that we have under-invested, and they include areas of Optum insight," Hemsley said, adding that there was a need for stable leadership and a product offerings upgrade. The company in December had forecast 2025 adjusted profit of $29.50 to $30.00 per share before pulling that, nearly double its new view. UnitedHealth posted an adjusted profit of $27.66 per share in 2024. Medical cost trends in its Medicare Advantage plans for older adults are now expected to run at about 7.5% in 2025, exceeding prior company expectations of just over 5%. The company anticipates these trends to continue to accelerate to nearly 10% next year. UnitedHealth has a strong balance sheet, which will likely help the company to repair its problems, said Bill Smead, chief investment officer at Smead Capital Management. UnitedHealth's adjusted second-quarter profit of $4.08 per share missed analysts' estimates by 40 cents. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 days ago
- Business
- Yahoo
UnitedHealth investors may seek roadmap on costs as Hemsley takes center stage
By Sriparna Roy (Reuters) -UnitedHealth's newly returned CEO, Stephen Hemsley, will likely face investor scrutiny over the largest U.S. health insurance and services company's efforts to rein in the elevated medical costs behind the withdrawal of its annual forecast. Hemsley returned to the role in May following the abrupt departure of then-CEO Andrew Witty, who stepped down amid rising operational and financial pressures. The company's decision in May to withdraw its 2025 earnings forecast due to soaring medical costs and Medicare-related challenges sent its shares tumbling. So far this year, UnitedHealth's stock has plunged more than 40%, dragging down the broader managed care sector with it. "Investors will be looking for confidence that he (Hemsley) has got a handle on things and that he understands where things may have gone wrong and how they are going to correct it," said James Harlow, senior vice president at Novare Capital Management, which owns 46,333 shares of the healthcare company. Hemsley, who ran the company from 2006 to 2017, has promised to rebuild trust, telling shareholders last month that regaining their confidence is a top priority. The pressure is compounded by a federal investigation into UnitedHealth's Medicare billing practices. The company recently confirmed it was cooperating with both criminal and civil inquiries from the U.S. Department of Justice. These regulatory woes have only added to the uncertainty facing the insurer. Wall Street analysts have lowered expectations throughout this month. Analysts expect a profit of $4.48 per share for the second quarter, according to data compiled by LSEG. That compares with expectations of $5.70 per share in May, when the company suspended its annual profit forecast. UnitedHealth plans to establish "a prudent 2025 earnings outlook and offer initial perspectives for 2026," the company had said in June. "Ultimately, on Tuesday, what we'd expect is more clarity on the way would expect a strategy, a roadmap laid out," said Sahil Bhatia, managing director of life sciences at Manning & Napier. "I think one of the big issues over the last few months has been just the we would expect more consistent execution going forward after laying out that roadmap," Bhatia said. At least two investors said they anticipate UnitedHealth will reset its 2025 profit forecast in the range of $18 to $20 per share, far below the company's previous outlook of $26 to $26.50. This might be conservative but is an appropriate start for Hemsley's first call, said Jeff Jonas, portfolio manager at Gabelli Funds. UnitedHealth has previously built a reputation to guide conservatively and raise its outlook as the year progresses. But this time, investors warn, withholding guidance altogether would be damaging. "If they continue to not give an EPS outlook for 2025, that will be damaging," Harlow added. Apart from financial turbulence, the company has also faced reputational challenges. It has moved to ease prior authorization requirements after a public outcry following the killing of a UnitedHealth executive last December. The Optum unit, once a growth driver for UnitedHealth, has also emerged as a key area of concern. Last quarter, the company flagged "unanticipated changes" in its Optum business that impacted planned 2025 reimbursements. "Among all the overhangs, Optum Health remains the biggest concern," said Deutsche Bank analyst George Hill. UnitedHealth has also grappled with the fallout from a major cyberattack last year that disrupted claims processing across its Change Healthcare unit.
Japan Today
17-07-2025
- Health
- Japan Today
Global childhood vaccination shows slight improvement but challenges remain
A little girl reacts after receiving an oral vaccine during a vaccination drive for diphtheria, influenza, tetanus and pneumococcus in Lima, Peru November 7, 2020. REUTERS/Sebastian Castaneda/File Photo By Sriparna Roy A million more children completed the critical three-dose vaccination against diseases like diphtheria, tetanus and whooping cough in 2024 compared to the previous year, according to new data released by the World Health Organization. Despite the progress, drastic changes in funding, growing global conflicts, and rising vaccine misinformation threaten to further stall or even reverse progress which poses a threat. "We've hit this very stubborn glass ceiling, and breaking through that glass to protect more children against vaccine-preventable diseases is becoming more difficult," WHO's director of the Department of Immunization, Vaccines and Biologicals, Kate O'Brien, told reporters. In 2024, 89% of infants globally, about 115 million, received at least one dose of the DTP vaccine, and roughly 109 million completed all three doses of the staple shot that protects against diphtheria, tetanus and pertussis, also known as whooping cough, according to the new national immunization coverage data released on Tuesday by the WHO and UNICEF. But, nearly 20 million infants missed at least one dose of DTP-containing vaccine, which includes 14.3 million "zero-dose" children who never received a single dose of any vaccine. This is 4 million more than the target for the year needed to stay on track with Immunization Agenda 2030 goals, the report added. The world is currently off track for the goal, which has been to halve the number of zero-dose children and achieve at least 90% global immunization coverage. Data shows a quarter of the world's infants live in just 26 countries affected by fragility, conflict, or humanitarian crises, yet make up half of all unvaccinated children globally. In half of these countries the number of unvaccinated children has expanded rapidly from 3.6 million in 2019 to 5.4 million in 2024. "We're starting to see the emerging signs of slippage, and in other countries, stalling of vaccine coverage," said O'Brien. Despite the challenges, countries have been able to scale up vaccines for diseases such as HPV, meningitis, pneumococcal disease, polio, and rotavirus. In 2024, 31% of eligible adolescent girls globally received at least one dose of the HPV vaccine. While this is far from the 90% coverage target by 2030, it represents a substantial increase from the 17% coverage in 2019. Global coverage against measles also improved, but the overall coverage rate is far below the 95% needed in every community to prevent outbreaks. "The good news is that we have managed to reach more children with life-saving vaccines. But millions of children remain without protection against preventable diseases, and that should worry us all," said UNICEF Executive Director Catherine Russell. © Thomson Reuters 2025.
Yahoo
16-06-2025
- Business
- Yahoo
US pharma bets big on China to snap up potential blockbuster drugs
By Sriparna Roy and Sneha S K (Reuters) -U.S. drugmakers are licensing molecules from China for potential new medicines at an accelerating pace, according to new data, betting they can turn upfront payments of as little as $80 million into multibillion-dollar treatments. Through June, U.S. drugmakers have signed 14 deals potentially worth $18.3 billion to license drugs from China-based companies. That compares with just two such deals in the year-earlier period, according to data from GlobalData provided exclusively to Reuters. That increased pace is expected to continue as U.S. drugmakers look to rebuild pipelines of future products to replace $200 billion worth of medicines that will lose patent protection by the end of the decade, analysts, investors, a banker and a drug company executive told Reuters. "They are finding very high-quality assets coming out of China and at prices that are much more affordable relative to perhaps the equivalent type of product that they might find in the United States," said Mizuho analyst Graig Suvannavejh. The total cost of licensing agreements, including low upfront payments and subsequent larger payouts, averaged $84.8 billion in the U.S., compared with $31.3 billion in China over the past five years, according to GlobalData. A licensing agreement grants a company the rights to develop, manufacture, and commercialize another company's pharmaceutical products or technologies in exchange for future target-based, or "milestone", payments while mitigating development risks. China's share of global drug development is now nearly 30%, while the U.S. share of the world's research and development has slipped 1% to about 48%, according to pharmaceutical data provider Citeline's report in March. Chinese companies have licensed experimental drugs to U.S. drugmakers that could be used for obesity, heart disease and cancer, reflecting abundant Chinese government investment in pharmaceutical and biotech research and development. While small molecules, like oral drugs, have been the most commonly licensed, there has been a notable shift toward novel treatments such as targeted cancer therapies and first-in-class medicines, Jefferies analysts said in a note in May. "Chinese biotechs are moving up the value chain by the day. They are... challenging their Western peers," said Macquarie Capital analyst Tony Ren. The growth is happening even as the U.S. and China have wrangled over tariffs and U.S. President Donald Trump pushes a made in America agenda. That has cut into traditional mergers and acquisitions, which are down 20%, with only 50 such transactions so far this year, according to data from database. Roughly a third of the assets that large pharmaceutical companies licensed in 2024 were from China, said Brian Gleason, head of biotech investment banking at Raymond James, who estimated such licensing deals would increase to between 40% and 50%. "I think it's only accelerating," Gleason said. The Trump administration is currently doing a national security investigation as it weighs if it will impose tariffs on the pharmaceutical sector. But one healthcare analyst said licensing deals should continue because the yet to be marketed products are not impacted by tariffs. "The law that gives the president the right to impose tariffs applies to goods. It explicitly excludes intellectual property," said Tim Opler, managing director in Stifel's global healthcare group. In May, Pfizer spent $1.25 billion upfront for the right to license an experimental cancer drug from China's 3SBio. That is the largest such deal this year and could be worth up to $6 billion in payments to 3SBio if the drug is successful. Regeneron Pharmaceuticals in June paid $80 million upfront in a potential $2 billion deal for an experimental obesity drug from China's Hansoh Pharmaceuticals. 'WAKEUP CALL' By licensing a drug in development, U.S. and European drugmakers get very quick access to a molecule which would take them longer and cost more to discover or design themselves, analysts say. U.S.-based drug developer Nuvation Bio bought AnHeart Therapeutics in 2024, gaining access to the China-based company's experimental cancer drug taletrectinib, which received U.S. approval last week. "We consider our presence in China not only a great avenue for R&D, but we also view it as an inside track on obtaining further assets to grow our company further and find new and better therapies to offer patients," Nuvation CEO David Hung told Reuters. What makes China attractive, said EY analyst Arda Ural, "a fraction of the cost and then multiples of time." Analysts have pointed to large drugmakers strategically securing rights to drugs at lower cost and running efficient early-stage trials in China to obtain important data, paving the way for global trials and potential earlier market entry. "It's a little bit of a wakeup call to our industry," said Chen Yu, Managing Partner at U.S.-based healthcare investment firm TCGX.
Yahoo
16-06-2025
- Business
- Yahoo
US pharma bets big on China to snap up potential blockbuster drugs
By Sriparna Roy and Sneha S K (Reuters) -U.S. drugmakers are licensing molecules from China for potential new medicines at an accelerating pace, according to new data, betting they can turn upfront payments of as little as $80 million into multibillion-dollar treatments. Through June, U.S. drugmakers have signed 14 deals potentially worth $18.3 billion to license drugs from China-based companies. That compares with just two such deals in the year-earlier period, according to data from GlobalData provided exclusively to Reuters. That increased pace is expected to continue as U.S. drugmakers look to rebuild pipelines of future products to replace $200 billion worth of medicines that will lose patent protection by the end of the decade, analysts, investors, a banker and a drug company executive told Reuters. "They are finding very high-quality assets coming out of China and at prices that are much more affordable relative to perhaps the equivalent type of product that they might find in the United States," said Mizuho analyst Graig Suvannavejh. The total cost of licensing agreements, including low upfront payments and subsequent larger payouts, averaged $84.8 billion in the U.S., compared with $31.3 billion in China over the past five years, according to GlobalData. A licensing agreement grants a company the rights to develop, manufacture, and commercialize another company's pharmaceutical products or technologies in exchange for future target-based, or "milestone", payments while mitigating development risks. China's share of global drug development is now nearly 30%, while the U.S. share of the world's research and development has slipped 1% to about 48%, according to pharmaceutical data provider Citeline's report in March. Chinese companies have licensed experimental drugs to U.S. drugmakers that could be used for obesity, heart disease and cancer, reflecting abundant Chinese government investment in pharmaceutical and biotech research and development. While small molecules, like oral drugs, have been the most commonly licensed, there has been a notable shift toward novel treatments such as targeted cancer therapies and first-in-class medicines, Jefferies analysts said in a note in May. "Chinese biotechs are moving up the value chain by the day. They are... challenging their Western peers," said Macquarie Capital analyst Tony Ren. The growth is happening even as the U.S. and China have wrangled over tariffs and U.S. President Donald Trump pushes a made in America agenda. That has cut into traditional mergers and acquisitions, which are down 20%, with only 50 such transactions so far this year, according to data from database. Roughly a third of the assets that large pharmaceutical companies licensed in 2024 were from China, said Brian Gleason, head of biotech investment banking at Raymond James, who estimated such licensing deals would increase to between 40% and 50%. "I think it's only accelerating," Gleason said. The Trump administration is currently doing a national security investigation as it weighs if it will impose tariffs on the pharmaceutical sector. But one healthcare analyst said licensing deals should continue because the yet to be marketed products are not impacted by tariffs. "The law that gives the president the right to impose tariffs applies to goods. It explicitly excludes intellectual property," said Tim Opler, managing director in Stifel's global healthcare group. In May, Pfizer spent $1.25 billion upfront for the right to license an experimental cancer drug from China's 3SBio. That is the largest such deal this year and could be worth up to $6 billion in payments to 3SBio if the drug is successful. Regeneron Pharmaceuticals in June paid $80 million upfront in a potential $2 billion deal for an experimental obesity drug from China's Hansoh Pharmaceuticals. 'WAKEUP CALL' By licensing a drug in development, U.S. and European drugmakers get very quick access to a molecule which would take them longer and cost more to discover or design themselves, analysts say. U.S.-based drug developer Nuvation Bio bought AnHeart Therapeutics in 2024, gaining access to the China-based company's experimental cancer drug taletrectinib, which received U.S. approval last week. "We consider our presence in China not only a great avenue for R&D, but we also view it as an inside track on obtaining further assets to grow our company further and find new and better therapies to offer patients," Nuvation CEO David Hung told Reuters. What makes China attractive, said EY analyst Arda Ural, "a fraction of the cost and then multiples of time." Analysts have pointed to large drugmakers strategically securing rights to drugs at lower cost and running efficient early-stage trials in China to obtain important data, paving the way for global trials and potential earlier market entry. "It's a little bit of a wakeup call to our industry," said Chen Yu, Managing Partner at U.S.-based healthcare investment firm TCGX.
