Eli Lilly and Co. shares rose nearly 5 percent Monday morning after the company said a study found that its experimental stomach cancer drug helped patients with advanced disease live longer, according to Bloomberg News. The drug, ramucirumab was tested in patients with gastric cancer that had spread to other organs. The most common side effect for the medicine was high blood pressure, diarrhea and headache, Lilly said in a prepared statement. Lilly did not disclose how much logner ramucirumab helped patients live, but said it would release those details at a future medical meeting. If approved, the drug might generate $600 million in annual sales, said Mark Schoenebaum, a New York-based analyst with ISI Group. Lilly shares rose 4.8 percent, to $52.86 each, late in the morning and were up 32 percent in the 12 months through Sunday. Ramucirumab is among the products obtained by Lilly from its $6.5 billion acquisition of ImClone Systems Inc. in 2008. Lilly has five other late-stage studies of ramucirumab ongoing in four tumor types, including breast and lung cancer. If approved for all indications in testing, the drug could have $1.6 billion in sales by 2020, according to a prediction by Leerink Swann analyst Seamus Fernandez.
Ron Thieme, who took over as president and CEO of AIT Laboratories during a management shakeup earlier this year, is leaving, the Indianapolis-based firm announced Monday morning. Chairman and company founder Michael Evans will return to the positions of president and CEO. Evans stepped down from those positions in March to make way for Thieme, who had been vice president and chief information officer of AIT since 2007. AIT said Monday in a prepared statement that Thieme was “leaving the company to pursue other challenges” and “would continue to work with AIT during a transition period.” AIT, a forensics and clinical testing company, has experienced a number of management moves this year amid challenging economic conditions in its industry. In January, Evans said AIT was looking to "restructure our business" and had eliminated an unspecified number of jobs. “AIT has seen reimbursement from government and private payers reduced throughout 2011, which has had a negative financial impact on the company,” he said at the time.
Indianapolis-based WellPoint Inc. will reorganize into four business units as a way to smooth the integration of Amerigroup Corp., the insurer WellPoint agreed to buy in July for $4.9 billion, according to a company memo obtained by Bloomberg News. Unlike WellPoint’s old structure, Medicare and Medicaid plans will be handled in separate divisions. In addition, there will be a commercial division overseeing sales of health insurance to employers and individuals, and a specialty division that sells dental, vision and disability coverage. Jim Carlson, CEO of Virginia-based Amerigroup, will run the Medicare division. Leeba Lessin, who was the top medical officer at California-based CareMore Group when WellPoint acquired it last year, will run the Medicare unit. Ken Goulet will continue to oversee WellPoint’s commercial business. And WellPoint veteran Lori Beer will oversee the specialty businesses. Chief Financial Officer Wayne DeVeydt will remain in his job. The changes were instituted by John Cannon, who has been serving as WellPoint’s interim CEO since the forced resignation of Angela Braly on Aug. 28. Cannon will serve in that role until a permanent replacement is found.
Three health care organizations broke ground on new facilities last week. The Community Health Network hospital system will construct a $24 million cancer center on the campus of its Community South Hospital. The 65,000-square-foot facility is expected to open next fall. Wishard Health Services, which is in the process of changing its name to Eskenazi Health, is building a $25 million primary care center in a former Circuit City store near Lafayette Square Mall. The 70,000-square-foot center will open next fall to provide care, senior care, health and wellness programs, physical therapy, radiology and other diagnostic testing. In addition, HealthNet Inc. is spending $312,000 to convert a former Blockbuster video store on West 10th Street into a primary care health center. The center will also offer pediatric, OB/GYN, podiatry, optometry, social work and behavioral health services, as well as access to discounted prescriptions. The health center, which will open in December, is expected to serve 3,000 patients.
Biomet Inc. saw its operating income fall and its sales growth decelerate in the three months ended Aug. 31. The Warsaw-based maker of orthopedic implants is often a bellwether for the rest of the industry. Biomet’s overall sales rose 6 percent in the quarter, to $707.4 million, compared with the same three months a year ago. But excluding Biomet’s recent acquisition of a trauma implant maker, its sales would have grown just 1 percent, to $668.6 million, over the same quarter last year. During the three months ended May 31, Biomet’s overall sales grew 3 percent. “We did experience some deceleration in growth for our hip and knee business, but until others report their results, we won't know whether market growth has slowed or our growth has come back to market,” Biomet CEO Jeffrey Binder said in a prepared statement. Operating income at Biomet totaled $69 million during the most recent quarter, down from nearly $73 million during the same quarter last year. Excluding special costs related to Biomet’s 2007 buyout by private equity firms and its acquisition of the trauma company, Biomet would have generated operating income of $191.7 million, a 5-percent increase over the same quarter last year.