Express Scripts and CuraScript Announce Acquisition Agreement; Specialty Pharmacy Will Enhance PBM Service Offering.Business Editors/Health/Medical Writers ST. LOUIS--(BUSINESS WIRE)--Dec. 22, 2003 Express Scripts, Inc. (Nasdaq:ESRX) announced today it has signed a definitive agreement to acquire the capital stock of CuraScript Pharmacy, Inc. and CuraScript PBM PBM - play by mail. See play by electronic mail. Services, Inc., together comprising the business of CuraScript for $335 million. CuraScript, headquartered in Orlando, Florida The city of Orlando is a major city in central Florida and is the county seat of Orange County, Florida. According to the 2000 census, the city population was 185,951. A 2006 U.S. , is one of the nation's largest specialty pharmacy services companies. This transaction is expected to close during the first quarter of 2004, subject to customary closing conditions and the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act The Hart-Scott-Rodino Antitrust Improvements Act of 1976 (Public Law 94-435, known commonly as the HSR Act) is a set of amendments to the antitrust laws of the United States, principally the Clayton Antitrust Act. The HSR Act was signed into law by President Gerald R. , and is expected to be slightly accretive to Express Scripts' 2004 diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of . CuraScript will enhance Express Scripts' ability to provide comprehensive clinical services in many disease states and improve the quality and affordability of specialty drug therapy for clients and patients. The specialty pharmaceutical market is expected to grow 20 to 30 percent or more annually over the next 3 to 5 years as there are over 350 products targeting more than 200 diseases in the biotech pipeline today. The acquisition delivers a number of strategic benefits to both companies including greater scale and complementary service capabilities. Serving over 175 managed care organizations, 30 Medicaid programs and the Medicare program, CuraScript operates six specialty pharmacies throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . CuraScript has a broad product offering, with particularly strong capabilities in oncology, rheumatoid arthritis rheumatoid arthritis Chronic, progressive autoimmune disease causing connective-tissue inflammation, mostly in synovial joints. It can occur at any age, is more common in women, and has an unpredictable course. , multiple sclerosis and other complex chronic therapies. It has a solid reputation for quality and expertise in the specialty market, which will enhance Express Scripts' competitive positioning. "CuraScript shares our client-centric focus for managing specialty drugs, mutually reinforcing the alignment of both companies' business models with the interests of clients and patients," said Barrett Toan, chairman and chief executive officer of Express Scripts. "Domenic Meffe and his team have done an outstanding job building strong capabilities in many disease states, offering comprehensive clinical services and developing significant managed care relationships. We at Express Scripts share CuraScript's commitment to providing the best possible patient care, and together with CuraScript, we will be able to drive better savings for our clients. We are pleased that CuraScript's management team will lead our specialty pharmacy group going forward." "We look forward to joining Express Scripts, complementing its current offering, and making available to Express Scripts' clients a cost-effective, single-source solution for specialty drugs," added Domenic Meffe, chief executive officer of CuraScript. "Express Scripts shares our commitment to service, and we are excited about providing specialty pharmacy services to their clients, who will realize considerable benefits from our combined expertise and capabilities." When viewed together, Express Scripts' Specialty Pharmacy Benefit Services ("SPBM SPBM Small Parcel Bundle Machine (USPS) "), Specialty Distribution Services ("SDS 1. (company) SDS - Scientific Data Systems. 2. (tool) SDS - Schema Definition Set. ") and CuraScript will clearly position Express Scripts among the leading companies in the specialty pharmacy services market. This will complement Express Scripts other PBM value-added services including the Company's industry-leading generic utilization rate and standing as the nation's second largest mail services pharmacy. Based on the most recent month's results, CuraScript's current annual run rate of revenue and operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. was approximately $425 million and $21 million, respectively. Revenue and operating income have historically grown more than 30 percent per year, and are expected to grow in excess of 35 percent in 2004 due to new clients under contract, which will be implemented in 2004. After deducting merger-related costs, debt service charges, depreciation and amortization expenses and taxes, the acquisition is expected to be slightly accretive to earnings in 2004. The Company expects to finance the acquisition with cash on hand and bank debt. Express Scripts will hold an investor conference call on December 22, 2003 at 9:30 a.m. CST CST abbr. 1. Central Standard Time 2. convulsive shock treatment CST Central Standard Time Noun 1. (10:30 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy ) to discuss this transaction. The call will be broadcast live as well as replayed through the Internet. The webcast can be accessed through the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of Express Scripts' website at http://www.express-scripts.com. Express Scripts, Inc. is one of the largest PBM companies in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. providing PBM services to over 50 million members through facilities in eight states and Canada. Express Scripts serves thousands of client groups, including managed care organizations, insurance carriers, third-party administrators, employers and union-sponsored benefit plans. Express Scripts provides integrated PBM services, including network pharmacy claims processing, mail pharmacy services, benefit design consultation, drug utilization review drug utilization review Health insurance A study of drug prescriptions to evaluate appropriateness and cost-effectiveness of drug therapy , formulary formulary /for·mu·lary/ (for´mu-lar?e) a collection of recipes, formulas, and prescriptions. National Formulary see under N. for·mu·lar·y n. management, disease management, medical and drug data analysis services, and medical information management services. The Company also provides distribution services for specialty pharmaceuticals through its Specialty Distribution subsidiary. Express Scripts is headquartered in St. Louis, Missouri. More information can be found at http://www.express-scripts.com, which includes expanded investor information and resources. CuraScript Pharmacy, Inc. is the nation's largest privately held specialty pharmacy services company. The company is focused on servicing the unique needs of managed care organizations and their participating providers and patients. CuraScript provides both progressive specialty pharmacy services and PBM services. As an industry leader of specialty pharmacy services, CuraScript provides specialty injectable in·ject·a·ble adj. Capable of being injected. Used of a drug. n. A drug or medicine that can be injected. medications to individuals with chronic illnesses requiring complex, high-cost treatment. CuraScript is recognized for its exceptional comprehensive range of services tailored to the individual needs of patients, physicians, payors, clinicians, and pharmaceutical manufacturers. By combining administrative, clinical, technological and managed care expertise, CuraScript is able to provide clients with a single-source solution, cost-effective results and optimal patient care. SAFE HARBOR Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. STATEMENT This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , including, but not limited to, statements related to the Company's plans, objectives, expectations (financial and otherwise) or intentions. Actual results may differ significantly from those projected or suggested in any forward-looking statements. Factors that may impact these forward-looking statements include but are not limited to: -- risks associated with our pending acquisition of CuraScript, including integration risks and costs, risks of client retention, and risks associated with the operations of the acquired business. -- risks associated with our ability to maintain our historic growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. , or to control operating or capital costs -- continued pressure on margins resulting from client demands for lower prices, enhanced service Enhanced service is service offered over commercial carrier transmission facilities used in interstate communications, that employs computer processing applications that act on the format, content, code, protocol, or similar aspects of the subscriber's transmitted information; offerings and/or higher service levels, and the possible termination of, or unfavorable modification to, contracts with key clients or providers -- competition and continuing consolidation in the PBM industry, and our ability to consummate contract negotiations with prospective clients, as well as competition from new competitors offering services that may in whole or in part replace services that we now provide to our customers -- risks associated with adverse economic conditions, which may result in lower membership growth in existing clients or in lower rates of utilization of prescription drugs -- adverse results in regulatory matters, the adoption of new legislation or regulations, more aggressive enforcement of existing legislation or regulations, or a change in the interpretation of existing legislation or regulations (including, without limitation, the Compliance Guidance for Pharmaceutical Manufacturers issued by the Office of Inspector General of Health and Human Services Noun 1. Health and Human Services - the United States federal department that administers all federal programs dealing with health and welfare; created in 1979 Department of Health and Human Services, HHS relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Federal Medicare/Medicaid Anti-Kickback Statute). -- risks associated with the operations of acquired businesses, including integration risks and costs, risks of client retention and repricing Repricing To change the price of an asset. In derivatives, it sometimes refers to the exchange of options of with different strike prices. repricing of client contracts -- increased compliance risks relating to our contracts with the Department of Defense TRICARE Plan and various state governments -- risks arising from investigations of certain PBM practices and pharmaceutical pricing, marketing and distribution practices currently being conducted by the U.S. Attorney offices in Philadelphia and Boston, the Attorney General of the State of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , and other regulatory agencies -- the possible loss, or adverse modification of the terms, of relationships with pharmaceutical manufacturers, or changes in pricing, discount or other practices of pharmaceutical manufacturers -- adverse results in litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , including a number of purported class action cases challenging aspects of our business practices -- risks associated with the use and protection of the intellectual property we use in our business -- risks associated with our leverage and debt service obligations, including the effect of certain covenants in our borrowing agreements -- risks associated with our ability to continue to develop new products, services and delivery channels -- general developments in the health care industry, including the impact of increases in health care costs, changes in drug utilization and cost patterns, introductions of new drugs and conversion of prescription drugs to non-prescription (or over-the-counter) status -- uncertainties regarding the implementation and the ultimate terms of proposed government initiatives, including a Medicare prescription drug benefit -- increase in credit risk relative to our clients due to adverse economic trends -- risks associated with our inability to attract and retain qualified personnel -- other risks described from time to time in our filings with the SEC We do not undertake any obligation to release publicly any revisions to such forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. |
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