Citron Research Renews Attack On Express Scripts

Shares of Express Scripts Holding Company (NASDAQ: ESRX) fell more than 6 percent on Wednesday after the company announced its 2017 financial guidance and hosted a conference call to discuss its outlook.

Citron On The Offense

Notable short seller Citron Research likened Express Scripts last week as being "the Philidor of the pharma industry" — a reference to Valeant Pharmaceuticals Intl Inc (NYSE: VRX) relationship with Philidor.

During Wednesday's conference call, Express Scripts CEO Tim Wentworth said the following about drug prices:

• "The overarching conversation about drug prices, there's no question in my mind that conversation is not going away."
• "Rebates are connected to inflation, but drug prices today are not acceptable even without inflation."

Speaking to Benzinga at the conclusion of Express Scripts' conference call, Citron Research's Andrew Left was asked if management's comments on rebates and drug pricing confirms his short thesis against the company. His answer was precise and straight to the point: "Of course they do."

"'Transparency in drug pricing WILL drive down the price of Express Scripts stock," Left added.

What Was Said Before

Left added in his initial attack on Express Scripts that he believes the company is the "culprit behind pharmaceutical price gouging," and if President-elect Donald Trump fulfills a pledge to fix drug pricing, he needs to look at Express Scripts.

Following Citron's commentary, a spokesperson with Express Scripts told Benzinga they disagree with the assertions and said it is not at all like Philidor.

"Express Scripts is a market force that uniquely puts medicine within reach by driving down cost of care and improving health outcomes," the company said.