Exagen Diagnostics Joins Medco - Analyst Blog
25 May 2011 - 12:30AM
Zacks
Recently Medco Research Institute,
a wholly owned subsidiary of Medco Health
Solutions (MHS) decided to enter into a partnership with
Exagen Diagnostics, a specialty diagnostics laboratory that
innovates, develops and distributes proprietary tests. Under this
collaboration, both the companies plan for pilot launching of a new
personalized medicine program called NIMBLE (Novel Interventions in
Methotrexate Boosts Levels of Effectiveness) for rheumatoid
arthritis patients.
Current survey shows that
approximately 1.3 million adults in US suffer from rheumatoid
arthritis. Many of these patients are being treated with low-dose
methotrexate which is considered as safe, cheaper and a highly
effective solution for the treatment. The pilot program NIMBLE will
be helpful for physicians to effectively determine the optimal
level of this low-dose methotrexate therapy. It will work with
Exagen's proprietary Avise PG lab test to measure whether patients
are receiving an appropriate dose of methotrexate.
Under this set up, Medco Research
Institutewill work with Medco clients to recruit patients to take
part in the NIMBLE program. Medco estimates that around 400
members who are new to methotrexate will undergo the Avise PG lab
test, thus huge scope lies with the successful pilot launch of
NIMBLE.
Overthe past few quarters, Medco
demonstratedsuccessful performance in its Specialty business
segment primarily banking on significant new client wins and
continued growth across the specialty business (Accredo). During
the first quarter of fiscal 2011 this segment reported revenues of
$3.1 billion, up 14.9% year over year. Presently, the company is
focusing on several strategic initiatives such as improved product
and channel mix along with new client wins to drive the growth
further.
Moreover, encouraged by a robust
cash balance, Medco targets suitable acquisitions. The company has
adopted several strategies in the recent past to increase its
footprint in the international market, which holds immense
potential.
We are currently ‘Neutral’ on Medco
which also corresponds to a Zacks #3 Rank (short term).
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