ESRX & CI, Eric & Josh…and Camilla Cabello & Young Thug?

April 20, 2018

“Havana ooh na na….”

According to NPR’s entertaining and enlightening podcast “The Indicator”, a full 35% of songs each month on the Billboard 100 are now collaborations between artists – up from 5% in 1990.  There are a whole host of technology and market-driven reasons for this, but here’s the upshot: its cool (and often good business) to collaborate.

Collaboration is a founding principle here at Nephron, and nowhere is that more apparent than our event-driven work.  Potential M&A has been a focus of healthcare services since our launch on 12/1.  With CVS/AET, CI/ESRX, WMT/HUM, EVHC and of course AMZN in the mix, we thought it made sense to share our full catalog to date.

In our ELEVENTH and TWELFTH notes on CI and ESRX, Josh painted a (more) bullish picture for CI shares and Eric UPGRADED ESRX citing limited downside and high likelihood of deal closure.  In the April 8th upgrade, Eric outlined near term catalysts, detailed underappreciated core earnings, and highlighted substantial cash flows from the expiring ANTM contract, we think forgotten by investors.  Since that call, ESRX has outpaced the S&P500 Health Index by ~490 bp, and we’ve seen the deal spread tighten over 740 bp to 4/19 close.  For more information, email: info@nephronresearch.com

Cigna/Express Scripts

  • CI/ESRX Analysis #1: Lateral Implications for Healthcare Services
  • CI/ESRX Analysis #2: CI to Acquire ESRX: You Are What You Eat
  • CI/ESRX Analysis #3: The Impact on UNH
  • CI/ESRX Analysis #4: ESRX Customer List Insights
  • CI/ESRX Analysis #5: ESRX Deal Accretive to CI Earnings, Dilutive to Value
  • CI/ESRX Analysis #6: Market ShareAcross ASO, Part D, PBM and Spec Pharmacy
  • CI/ESRX Analysis #7: A MCO Investor’s Guide to PBMs, and Vice-Versa
  • CI/ESRX Analysis #8: Understanding Regulatory Risk and Timing
  • CI/ESRX Analysis #9: Competitive Implications
  • CI/ESRX Analysis #10: Pro-Forma Model
  • CI/ESRX Analysis #11: Presenting the Bull Case for CI Shares
  • CI/ESRX Analysis #12: Upgrading ESRX to Buy on Favorable Risk/Reward

 CVS/Aetna

  • CVS/AET Analysis #1: Market Share Informs Antitrust & Synergy Expectations
  • CVS/AET Analysis #2: A Pharmacy & PBM Investor’s Guide to MCOs/Aetna
  • CVS/AET Analysis #3: Care Delivery and Analytics Assets
  • CVS/AET Analysis #4: Competitive Implications for Healthcare Services
  • CVS/AET Analysis #5: Form S-4 Suggests Aetna Ultimately Had One Dance Partner
  • CVS/AET Analysis #6: Reevaluating our Outlook for CVS Shares
  • CVS/AET Analysis #7: Reevaluating our Outlook for AET Shares
  • CVS/AET Analysis #8: 2018 PDP Data Observations with Updated CVS/AET Divestiture Estimates
  • CVS/AET Analysis #9: Thoughts on the CVS/AET House Judiciary Committee Hearing

Wal-Mart/Humana

  • Walmart Showing Managed Care Interest (Again) and Proving Thesis on Retail Health
  • Does Walmart’s Interest in Humana Represent a Risk for Distributors, Pressure for Amazon?

Envision Healthcare

  • EVHC: Strategic Review Progressing and Optum a Sensical Partner for PE

And of course Amazon…

  • A Prescription for Amazon
  • The Dreaded A-Word Hits health Insurance
  • An Amazonian sized Ambition in Healthcare