Cigna's Profit Surge: Specialty Drugs and Strategic Moves

Cigna exceeded quarterly profit projections, fueled by high demand for specialty drugs and new clients in its pharmacy benefit management sector. The company enjoyed a 2% premarket share increase and saw growth in biosimilar adoption. Revenue in its Evernorth unit rose by 36% this quarter.

Cigna has surpassed quarterly profit estimates, bolstered by strong performance in the specialty drugs market and an influx of new clients for its pharmacy benefit management division. This news has driven a premarket increase in the company's share price by over 2%, reaching $319.02.

The insurer noted significant adoption of biosimilars of AbbVie's arthritis drug, Humira, during the third quarter. Cigna began offering the Humira biosimilars with no out-of-pocket costs to patients via its specialty pharmacy, Accredo, in June.

The Evernorth healthcare services unit, which includes the pharmacy benefit management unit, reported a 36% rise in total adjusted revenue to $52.64 billion. According to J.P.Morgan analyst Lisa Gill, the solid quarterly results suggest a positive outlook for Cigna entering Q4 and 2025.

Cigna's Medicare Advantage market presence remains limited compared to peers, as it largely depends on employer-sponsored healthcare management. The company is in the process of divesting its Medicare Advantage business to Health Care Service Corp.

The medical care ratio rose to 82.8%, higher than analysts' expectations, while net income fell 47.5% to $739 million due to a $1 billion investment loss in VillageMD. Nevertheless, quarterly profit outperformed forecasts, reaching $7.51 per share versus the anticipated $7.20.

(With inputs from agencies.)