Tenet Healthcare Corp. (see story, page TK), which owns three Orange County hospitals, should get a bump this year from increased Medicaid enrollment fueled by healthcare reform, according to one analyst.
Ana Gupte of Boston-based Leerink Swann LLC examined data from the U.S. Department of Health and Human Services showing that Medicaid enrollment reached 69 million in November, or 10.1 million more enrollees than the average monthly enrollment in the state- and federally funded health insurance plan before the launch of Medicaid expansion.
HHS figures show that California’s Medi-Cal and Children’s Health Insurance Program enrollment has grown 29% since September 2013 to 11,790,244 enrollees.
The report didn’t break down enrollment by county.
Gupte wrote that the November data show “strong growth has continued on track into the 2015 open enrollment season … suggesting achievability of our 2015 bull case” for hospital stocks, and she mentioned the Dallas-based owner of Fountain Valley Regional Hospital and Medical Center, Los Alamitos Medical Center, and Placentia-Linda Hospital as one publicly traded company that will benefit from more patients obtaining insurance.
Gupte referred to for-profit hospitals as a “selective stock-picking game into 2015.”
She also offered a caution about “strong, continued positive Affordable Care Act tailwinds are offset by performance downside from the scheduled [U.S.] Supreme Court hearing of the challenge to the federal [health insurance exchange] subsidies.”
Medtronic Closes Covidien Deal
About 1,370 Orange County workers in are now part of a new company: Medtronic PLC.
Medtronic plc grew out of Medtronic Inc., a Minneapolis-based diversified device maker that recently completed a $42.9 billion takeover of Covidien PLC in Ireland.
The combined company’s principal executive offices will be in Ireland, but the operational headquarters remains in Minnesota.
Medtronic PLC’s OC operations are concentrated mainly in replacement heart valves and neurovascular treatments.
Its “center of excellence” for tissue heart valves is in Santa Ana.
The company competes with Irvine-based Edwards Lifesciences Corp. in the surgical and less-invasive replacement valve markets with lines such as Hancock II, Contegra, Mosaic and Medtronic CoreValve.
Medtronic PLC’s neurovascular unit is operating as an independent business under the Restorative Therapies banner and makes products such as the Pipeline, which restores natural blood flow past wide-neck brain aneurysms, and the Alligator, which retrieves foreign bodies from brain arteries.
Valeant Dendreon ‘Stalking Horse’
Valeant Pharmaceuticals International Inc., which lost out in a bidding war for Irvine-based Allergan Inc., is looking to buy Provenge, a prostate cancer vaccine produced in Seal Beach and other locations, from bankrupt Dendreon Corp.
The Seattle-based company and Valeant reached a “stalking-horse” deal in late January under which Valeant would acquire the worldwide rights to Provenge and some other assets for $296 million, according to Dendreon.
Dendreon said the deal is subject to higher and better bids and that potential bidders have until Feb. 10 to participate in an auction, according to Reuters.
The news agency said stalking-horse bidders help draw others to bankrupt asset auctions by setting a floor price, but in case of a bigger bid, the bankrupt company would be required to pay breakup and other fees to the stalking horse.
The company opened its plant in Seal Beach in 2011 to make the vaccine Provenge, which was highly touted after the Food and Drug Administration approved it. The vaccine failed to meet sales expectations.
Provenge didn’t take off—adoption of the drug was hindered by its cost of more than $90,000 a treatment, as well as uncertainty about insurance coverage.
Canada-based Valeant teamed up with activist investor Bill Ackman and his Pershing Square Capital Management LP in a spirited bid to buy Allergan. The Botox maker fought the bid and finally accepted a $70 billion buyout from Actavis PLC in November.
Bits & Pieces
Anaheim-based ClearFlow Inc. exhibited its PleuraFlow Active Clearance Technology device at the Society of Thoracic Surgeons’ annual meeting in San Diego late last month. PleuraFlow is used to keep chest drainage tubes clear of blood clotting in the early hours of heart surgery. Separately, ClearFlow signed a distribution deal for PleuraFlow with Maquet Medical Systems USA, a Wayne, N.J.-based unit of Maquet in Rastatt, Germany. … Aliso Viejo-based OrthAlign Inc. said it exceeded its 2014 sales forecasts. The privately held, venture-backed company didn’t give specific numbers. Its KneeAlign device is used with implant systems in total knee arthroplastic surgeries. … Hoag Neurosciences Institute’s Orange County Vital Brain aging program received $132,000 from the UniHealth Foundation that it will use to create online continuing medical education courses to help doctors learn more about cognitive health management.
