Hello and happy hump day, readers.
CVS is on a tear.
The retail pharmacy giant easily beat Wall Street expectations on Wednesday, reporting a 35% quarterly revenue spike, sending CVS shares up nearly 7.5%. That’s no mean feat for a company with some $75 billion in market value.
So what’s driving this success – the second consecutive quarter of better-than-expected performance for CVS?
Well, it’s kind of… Everything. CVS’s flagship prescription business is booming, with pharmacies filling nearly 20% more prescriptions year-over-year in the second quarter of 2019; over-the-counter medication sales also grew considerably; and Aetna, the insurance giant CVS snatched up in a mega-merger also managed to beat investor expectations with more than $17 billion in quarterly sales.
This is just one quarter. But if CVS can keep up the trend, it will go a long way toward convincing the public that its Aetna acquisition wasn’t just a bold bet—but one that that’s being implemented effectively.
Read on for the day’s news.
Sy Mukherjee, @the_sy_guy, sayak.mukherjee@fortune.com
DIGITAL HEALTH
Google parent Alphabet's AI-focused firm is bleeding money. Alphabet, the umbrella firm that houses Google, hasn't exactly shied away from bold bets. The thing is... Bets don't always necessarily pay off (especially in the short term). The company's AI-focused DeepMind arm appears to be one of the slow risers. DeepMind saw losses of about $570 million last year, according to new filings. The company is attempting to advance artificial intelligence in fields ranging from predictive diagnostics for kidney injuries to wind farm energy output. (Financial Times)
INDICATIONS
A shakeup cometh at Eli Lilly. Indianapolis-based pharma giant Eli Lilly announced a major leadership shakeup on Wednesday. The company's current cancer chief is heading for the exits and Josh Bilenker, the CEO of Loxo Oncology (a company Lilly purchased for about $8 billion at the beginning of the year), will take his place (at least for the meantime). (BioSpace)
Gilead faces pushback on HIV drug Descovy. Gilead has long been one of the leading manufacturers in the HIV/AIDS field. But that run hasn't been shorn of controversy—particularly when it comes to the biotech giant's pricing strategies. The controversy continues with Descovy, Gilead's latest pill meant to prevent HIV transmission (the company also manufactures Truvada, a treatment that's shown to largely block HIV infection in at-risk populations). A number of patient groups are pushing back on Descovy, arguing it doesn't make sense for insurers and government programs to cover the new, brand name treatment when a generic version of Truvada will be on the market by late 2020. (Reuters)
THE BIG PICTURE
The U.S. public now trusts scientists as much as it does the military. A new Pew Research survey finds that Americans' trust in science—or at the very least in scientists—is growing. In fact, about 86% of those polled by Pew said they had somewhere between a "fair amount" and a "great deal" of trust in scientists to act in the public interest. Those are numbers that rival the U.S. military, one of the most trusted institutions among the American public. (Nature)
REQUIRED READING
Energy Company Offerings Suffer Amid Gas Glut, by Katherine Dunn
Smucker's CEO Says Doing Good Is Good for Business, by Susie Gharib
Why Walgreens Is Closing 3% of Its U.S. Stores, by Chris Morris
Popular Kids' Tablet Has Concerning Security Holes, Researchers Say, by Alyssa Newcomb
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