NEW YORK Pharmacy benefit manager Express Scripts Holding Co (ESRX.O) said on Tuesday that it plans to cut costs and is on the lookout for strategic deals as it readies itself for the potential loss of its largest customer, Anthem Inc (ANTM.N).
Express Scripts said on Monday that health insurer Anthem, which has sued the company over claims of being overcharged, was unlikely to renew its contract after it ends in 2019. Anthem was responsible for just under a third of Express Scripts operating earnings in 2016.
Express Scripts shares were down 11.2 percent at $59.72 in morning trading.
"A strong core is built not just on creating and making the most of external opportunities but also by managing internal cost and investments to ensure a highly efficient lean approach," Chief Executive Tim Wentworth said on a conference call with investors following the announcement. "We have proven over the years that we can do this."
Chief Financial Officer Eric Slusser said that the company has already launched programs with an eye toward reducing selling, general and administrative expenses should the Anthem contract end.
The company also said it was looking for strategic acquisitions both for its core business as well as to provide additional services.
"Pick your favorite three investment bankers, they would tell you that we read everything," Wentworth said on a conference call with investors, when asked about possible deals. "We're engaging very meaningfully."
(Reporting by Michael Erman; Editing by Bernard Orr)