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Pharmaceutical benefit managers (PBM)
 Specialty Prescription Management
We manage prescription benefits for tens of millions of Americans on
behalf of thousands of clients, including health plans and plan sponsors.
Employers, unions and government organizations throughout the nation
rely on our services. Our team of more than 30,000 employees expresses
passion, expresses care and expresses enthusiasm for our mission. We are
committed to our members achieving better clinical outcomes and
dedicated to delivering better financial outcomes for plan sponsors.
~ George Paz, Chairman & CEO
https://www.express-scripts.com/aboutus/index.shtml
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Benefit Design Consultation.
Patient Care Contact Centers
Formulary development
Information Reporting and Analysis Programs
Rebate Programs
Electronic Claims Processing System
Consumer Health and Drug Issues
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United Health Group
CVS Caremark
Omnicare
Rite Aid
Express Scripts’ wide moat gives it a great advantage
over their competitors. This can be attributed to three
main “pillars:”
1) Sticky client base
2) Strong foothold within pharmaceutical markets.
3) The company’s scale advantage.
ESRX Revenue (in millions $)
IV Quarter
Dec.
III Quarter
Sep.
II Quarter
June
I Quarter
March
FY
FY 2014
26,312.60
25,778.50
25,111.00
23,685.00
FY 2013
25,781.40
25,915.60
26,425.00
26,063.00
FY 2012
27,410.70
26,999.40
27,692.50
12,132.60
FY 2011
12,101.40
11,571.00
11,361.40
11,094.50
100,887.10 104,098.80 93,858.10 46,128.30
http://csimarket.com/stocks/single_growth_rates.php?code=ESRX&rev
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George Paz: Chairman & Chief Executive Officer
◦ Salary: $1.07mil with a bonus of $2.02mil. He also
receives stock gains of $34.99mil
• Keith Ebling: Executive Vice President & General Counsel:
• Salary: $660,385 and $662,540 was received as a
bonus, & $900,000 was received in stock options
• Jim Havel: Executive Vice President & Interim Chief
Financial Officer.
• Salary: $725,000 and a signing bonus of
$110,000,
• Christine Houston
Senior Vice President - Operations
• Steve Miller, MD
Senior Vice President & Chief Medical Officer
• Tim Wentworth: President
• Salary: $815,303, Bonus:1,264,863,
Profitability Ratio
Profit Margin:
Return on assets:
Return on Equity:
2012
.014
.023
.056
2014_________________________
.019 (+)
.037 (+)
.100 (+)
Asset Utilization:
Receivables turnover:
Total Asset turnover:
NWC turnover:
16.08
1.74
-.025
Liquidity Ratio
Current ratio:
Quick ratio:
NWC to total assets:
.82
.68
-.04
.62 (-)
.50 (-)
-.61 (-)
Leverage Ratio:
Total Debt ratio:
Equity multiplier:
D/E ratio:
.96
2.49
.64
.63 (+)
2.68 (-)
.55 (+)
15.83 (-)
1.88 (+)
-.064 (-)
Value1
Weight
Required rate of
return2
Equity (fair value)
63,878,599
0.82
16.07%
Long-term debt,
including current
maturities (fair
value)
14,200,200
0.18
2.38%
Calculation
= 3.78% × (1 –
37.08%)
USD $ in thousands
Equity (fair value) = No. shares of common stock outstanding × Current share price
= 729,291,000 × $87.59 = $63,878,598,690.00
Long-term debt, including current maturities (fair value).
Required rate of return on equity is estimated by using CAPM.
Required rate of return on debt.
Required rate of return on debt is after tax.
Estimated (average) effective income tax rate
= (33.60% + 36.40% + 38.00% + 37.00% + 36.90%) ÷ 5 = 37.08%
WACC = 13.58%
https://www.stock-analysis-on.net/NASDAQ/Company/Express-Scripts-Holding-Co/DCF/Present-Value-of-FCFF
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2009- Express Scripts Completes Acquisition of
WellPoint’s NextRx Subsidiaries
Hepatitis Cure Value Program
The transaction includes a 10-year agreement under which
Express Scripts, one of the largest pharmacy benefits
management companies in North America, will provide
pharmacy benefits management services, including home
delivery and specialty pharmacy services, to members of
the affiliated health plans of WellPoint, one of the nation’s
largest health benefits companies. Express Scripts
acquired the NextRx subsidiaries for $4.675 billion, which
includes consideration for the value of a future tax benefit
for Express Scripts based on the structure of the
transaction.
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Merger with Medco Health Solutions
"Our merger is exactly what the country needs now, It
represents the next chapter of our mission to lower
costs, drive out waste in healthcare and improve
patient health. We remain focused on formulary
management, channel management and closing gaps
in care, which will allow us to further improve the
health of people with chronic and complex medical
conditions.
~ George Paz, CEO
Ticker
ESRX
Company
Express Scripts Holding
Company
Market Cap
(Millions)
$60,830.00
5-Year Sales
Growth
36.50%
Debt/Equity
0.73
1.90%
Profit Margin
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Initial public offering in 1992
Express Scripts Holding Company (ESRX)
-NasdaqGS 87.59 1.24(1.40%)
Beta: .64
CVS Health Corporation (CVS)
-NYSE
104.19 2.19(2.06%)
Beta:1.17
Omnicare Inc. (OCR)
-NYSE
94.55 0.06(0.06%)
Beta:.47
Date
Research Firm
Action
Current
PT
12/04/14
Deutsche Bank
Maintains
Hold
88.0
1/08/15
JP Morgan
Maintains
Overweight
100.0
1/08/15
Barclays
Maintains
Overweight
102.0
1/28/15
FBR Capital
Downgrades
Market
Perform
2/26/15
Deutsche Bank
Maintains
Hold
96.0
4/10/15
BMO Capital
Maintains
Market
Perform
89.0
5/20/15
Baird
Initiates
Coverage on
Neutral
94.0
6/01/15
Raymond
James
Downgrades
Market
Perform
6/15/15
Deutsche Bank
Maintains
Hold
6/17/15
Oppenheimer
Initiates
Coverage on
Perform
95.0
http://www.benzinga.com/stock/esrx/ratings
Transactions
Date
Shares
06/09/2015
1,644
06/01/2015
46,069
06/01/2015
06/01/2015
06/01/2015
06/01/2015
Transaction
Disposition at
$87.14 per share.
Disposition at
$86.15 per share.
Value
143,259
3,968,845
4,799
Derivative/Nonderivative trans. at
$77.15 per share.
370,242
3,557
Derivative/Nonderivative trans. at
$53.05 per share.
188,698
16,356
Derivative/Nonderivative trans. at
$53.05 per share.
867,685
9,078
Derivative/Nonderivative trans. at
$58.17 per share.
528,06
“We are proud to provide world-class
service and specialized pharmacy care to
our men and women in uniform and
military retirees, along with their
dependents.
”
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Shareholder value is the sum of all strategic
decisions that affect the firms ability to
efficiently increase the amount of free cash
flow over time.
was downgraded by ZACKS from a “hold” rating
to a “sell” rating in a research note issued to
investors on Tuesday,
9,000,000
8,000,000
7,000,000
6,000,000
5,000,000
ESRX
4,000,000
CVS
3,000,000
UNH
2,000,000
1,000,000
0
Cash Flow '14
Cash flow '13
Cash flow '12
150,000
100,000
MKT CAP
NET INCOME
50,000
P/E
D/E
0
ESRX
CVS
UNH
Competition
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http://www.benzinga.com/stock/esrx/ratings
http://csimarket.com/stocks/single_growth_rates.php?code=
ESRX&rev
https://www.express-scripts.com/aboutus/index.shtml
https://www.expressscripts.com/pressroom/informationresources/corporateoverv
iew/corporateOverview.pdf
http://fortune.com/fortune500/express-scripts-holding-22/
http://ir.antheminc.com/phoenix.zhtml?c=130104&p=irolnewsArticle&ID=1360094
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https://www.stock-analysison.net/NASDAQ/Company/Express-Scripts-HoldingCo/DCF/Present-Value-of-FCFF
http://www.forbes.com/lists/2012/12/ceo-compensation12_George-Paz_23R1.html
http://www.reuters.com/finance/stocks/companyOfficers?symbo
l=ESRX.O
http://www.tricare.mil/overseas-pharmacy?p=1
http://www.wsj.com/articles/SB1000142405311190355490457
6460322664055328
http://blogs.wsj.com/pharmalot/2014/12/22/the-hepatitis-cprice-wars-begin-what-the-express-scripts-move-means/
http://www.wikinvest.com/stock/Express_Scripts_%28E
SRX%29