Medicare's Doc Fix | Market Checkup, 3/27/14 | The Motley Fool

TL;DR

Carrick is a big winner following clinical trial success, while Exelixis and Inmed are the big losers this week. Baxter breaks up into two businesses, and there is uncertainty surrounding copay assistance for Affordable Care Act patients.

Transcript

hi fools welcome to Market checkup the motley fools Healthcare focused investing show I'm David Williamson and I'm joined by Michael Douglas thanks for being here Michael happy to be here and we have a jam-pack show for you we're going to go over some recent winners and losers uh we have a big is Pharma breaking itself apart uh and we have of cours... Read More

Key Insights

• ⏮️ Carrick's rebound after clinical trial success showcases the potential for a stock resurgence even after previous setbacks.
• ✳️ Exelixis and Inmed's setbacks highlight the risks associated with clinical trials and the impact on stock prices.
• 👻 Baxter's decision to break up allows investors to choose between the riskier pharma business and the more stable Medtech division.
• 🤨 The uncertainty surrounding copay assistance for ACA patients raises questions about compliance with federal regulations and the impact on patients and pharma companies.

Questions & Answers

Q: Why is Carrick experiencing a huge rebound?

Carrick's success in its clinical trial for xerenex, a drug used to treat end-stage renal disease, has boosted its stock price and potential for FDA approval. This is a major win for the company after previous setbacks.

Q: What caused Exelixis and Inmed to experience setbacks?

Exelixis faced disappointment in its prostate cancer trial, with an independent reviewer determining that the trial should continue instead of being stopped due to overwhelming efficacy. Inmed released mixed Phase 2 data for erase, a drug for lung infections, missing its primary endpoint but succeeding in the secondary endpoint.

Q: Why is Baxter breaking up into two businesses?

Baxter's decision to break up into separate businesses is aimed at unlocking value and focusing on the growth potential of each division. The move is seen as a smart decision, as pharma businesses are riskier and may not align with the core Medtech business.

Q: Why is there uncertainty surrounding copay assistance for Affordable Care Act patients?

Some pharma companies, such as MK and GSK, have stopped copay assistance for ACA patients due to concerns about violating federal anti-kickback legislation. However, other companies and the Pharma industry trade group believe it is still permissible. The government's stance on the matter is unclear.

Summary & Key Takeaways

• Carrick is experiencing a huge rebound after the success of its clinical trial for xerenex, a drug used to treat end-stage renal disease.

• Exelixis and Inmed are both facing setbacks with trial disappointments, causing their stock prices to plummet.

• Baxter is breaking up into two businesses, focusing on Medtech and Pharma separately.

• There is uncertainty surrounding copay assistance for Affordable Care Act patients, with some companies stopping the practice due to fears of legal issues.