Medco Health Solutions Inc.'s fourth-quarter net income rose 12 percent, as gains from mail-order prescriptions and the pharmacy benefits manager's specialty pharmacy business helped offset expenses from its pending acquisition by Express Scripts Inc.
The Franklin Lakes, N.J., company said Tuesday that it earned $424.4 million, or $1.08 per share, in the three months that ended Dec. 31. That compares to $378.5 million, or 88 cents per share, in the final quarter of 2010.
Revenue also climbed 12 percent to almost $19 billion in the fourth quarter, which had an extra week compared to the 2010 quarter.
Adjusted earnings that exclude costs tied to the Express Scripts deal and other expenses were $1.25 per share.
Analysts surveyed by FactSet expected, on average, earnings of $1.17 per share on $17.38 billion in revenue.
Pharmacy benefit managers, or PBMs, process mail-order prescriptions and handle bills for prescriptions filled at retail pharmacies, acting as middlemen between employers offering prescription drug benefits and drugmakers.
Medco said mail-order prescriptions rose 9 percent in the quarter, and revenue from its Accredo specialty pharmacy business climbed 28 percent to $3.8 billion. Accredo distributes drugs that require special handling, including treatments for chronic illnesses.
The company said its Accredo business grew due to the extra week, an increase in brand pricing and broader utilization of specialty products.
Adjusted prescriptions — which count 90-day mail order prescriptions as three 30-day prescriptions — rose 7.7 percent in the quarter to 263.1 million.
Last July, St. Louis-based Express Scripts announced a $29.1 billion deal to buy Medco, a combination that would create a company that handles the prescriptions of about 135 million people, or more than one in three Americans. The new company would become the largest U.S. pharmacy benefits manager by far.
Shareholders from both companies have approved the deal, and the companies complied with a second request for information from the Federal Trade Commission earlier this month. Medco said Tuesday it remains confident the deal will close in the first half of this year.
The company had $43.6 million in expenses related to the deal in the fourth quarter.
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