Why Is PBM Stock Drawing So Much Investor Interest Today?

Investing.com -- Three major healthcare giants have been accused of creating secretive subsidiaries to divert billions of dollars from health plans and patients, according to an investigation published by Hunterbrook on Tuesday.

The report alleges that CVS Health, UnitedHealth Group, and Cigna Group established pharmacy benefit manager (PBM) "Group Purchasing Organizations" (GPOs) to retain rebate money that was supposed to be passed through to health plans.

These three entities - Zinc (CVS), Emisar (UnitedHealth), and Ascent (Cigna) - reportedly generate "astronomical revenue with skeleton staff," making them among the world’s most lucrative enterprises on paper despite having minimal physical presence, according to Hunterbrook’s findings.

The investigation claims these companies created these subsidiaries as a response to growing pressure to pass 100% of drug rebates to health plans. By establishing these GPOs, the companies could technically fulfill rebate pass-through promises while still retaining substantial funds.

Hunterbrook reports that their multinational investigation included interviews with executives and former staffers, analysis of healthcare data, visits to offices in Ireland and Switzerland, and reviews of thousands of pages of contracts and court records.

The report states that some health plans have discovered the arrangement through financial reviews and have recovered tens of millions of dollars from PBMs and their GPOs, according to public audit reports and court filings.

The three healthcare conglomerates control over 80% of America’s prescription drug market through their PBM subsidiaries: Optum Rx, CVS Caremark, and Evernorth Express Scripts. Their parent companies rank third, fifth, and 13th respectively on the Fortune 100 list in 2025.

According to Hunterbrook, the companies did not respond to repeated inquiries seeking clarity on these PBM GPOs. The report claims CVS sued to prevent evidence from being released, while Cigna allegedly called police on a reporter during the investigation.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Investing.com -- Psyence Biomedical Ltd (NASDAQ:PBM) stock gained 2.7% in premarket trading Friday after the company announced a key ethics committee approval for its psilocybin product in an ongoing Phase IIb clinical trial.

The Bellberry Human Research Ethics Committee formally approved the use of PsyLabs’ psilocybin formulation (NPX5) in Psyence’s clinical trial evaluating psilocybin-assisted psychotherapy for Adjustment Disorder in cancer patients. The approval applies to all participating study sites in Australia.

This development marks a significant step in Psyence’s evolution toward vertical integration in the psychedelics sector. The company, which has approximately $9.5 million in cash reserves and no debt, is now positioned to control its supply chain from raw material sourcing through clinical development.

"This is a pivotal advancement in our clinical program and a defining step in our long-term strategy," said Jody Aufrichtig, CEO of Psyence BioMed.

The Phase IIb study will enroll approximately 87 participants and evaluate two therapeutic doses of psilocybin against a low-dose comparator, combined with structured psychotherapy. The trial remains on track to deliver top-line results in 2026.

PsyLabs CEO Tony Budden noted that the approval "reflects years of scientific, regulatory, and manufacturing preparation" to ensure their product meets high standards for clinical use.

The company is planning to activate additional clinical sites to accelerate patient recruitment for the study.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Investing.com -- Blue-chip stocks remain a cornerstone of many investment portfolios, offering stability and consistent returns in uncertain markets. According to recent rankings from WarrenAI, several established companies stand out for their combination of analyst upside potential, strong returns, and dividend reliability.

These blue-chip leaders demonstrate the fundamental strengths that typically characterize this investment category: solid financial performance, operational excellence, and the ability to reward shareholders through consistent dividend growth. The current top-ranked companies present compelling cases for investors seeking both stability and growth potential.

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Merck & Co Inc (NYSE:MRK) takes the top position with an impressive 39.5% analyst upside potential and 26.3% return on equity. The pharmaceutical giant exemplifies what a core blue-chip holding should look like with its 3.2% dividend yield, 9.1% forecasted EPS growth, and a remarkable 15-year dividend growth streak.

Merck’s combination of current yield and future growth potential creates a balanced opportunity for investors seeking long-term value in the healthcare sector.

A recent development for Merck includes receiving FDA approval for its Keytruda combination therapy to treat a form of bladder cancer, along with securing European Commission approval for a new subcutaneous administration of the treatment.

The Allstate Corporation (NYSE:ALL) ranks second with 37.2% upside potential according to analysts. The insurance provider stands out as a defensive play with a 22.2% return on invested capital, demonstrating exceptional operational efficiency.

Like Merck, Allstate maintains a 15-year streak of dividend increases, a rare achievement that signals management’s commitment to shareholder returns and the company’s financial stability even during challenging economic periods.

The Allstate Corporation reported third-quarter adjusted net income that significantly exceeded analyst expectations, which led firms including Roth/MKM and Keefe, Bruyette & Woods to raise their price targets on the company.

The Cigna Group (NYSE:CI) rounds out the top three with 14.7% upside potential. The managed care company has delivered a consistent 25.5% compound annual growth rate in earnings per share, positioning it as a growth leader among blue chips.

With strong cash flow of $8.66 billion, Cigna demonstrates the financial strength necessary to fund operations, pursue strategic initiatives, and return value to shareholders while maintaining momentum in the competitive healthcare services market.

The Cigna Group announced third-quarter adjusted earnings that modestly beat analyst estimates, though several firms, including Bernstein and TD Cowen, lowered their price targets due to concerns over the company’s pharmacy benefit manager (PBM) model transition.

These rankings highlight companies that combine traditional blue-chip characteristics with growth potential, offering investors options that may provide both stability and appreciation opportunities in today’s market environment.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Investing.com -- Verrica Pharmaceuticals Inc (NASDAQ:VRCA) stock rose 8.6% on Monday after the dermatology therapeutics company announced it had secured approximately $50 million in a private investment in public equity (PIPE) financing.

The company plans to use $35 million of the proceeds to fully retire its debt facility from OrbiMed, with the remainder allocated to working capital and general corporate purposes. The financing is expected to close around November 25, subject to customary conditions.

"The significant capital provided by this financing will solidify our balance sheet, completely eliminate our debt facility and the restrictive covenants associated therewith, and provide the Company with an extended expected cash runway into mid-2027," said Jayson Rieger, President and CEO of Verrica.

The PIPE financing was anchored by Caligan Partners LP and PBM Capital, along with new and existing investors. As part of the agreement, Caligan Partners will be entitled to designate a new member to Verrica’s Board of Directors.

The transaction involves the sale of 6,499,826 shares of common stock and pre-funded warrants to purchase 5,305,164 shares, along with accompanying warrants to purchase additional shares. The combined price was $4.24125 per share of common stock and accompanying warrant.

With this financing, Verrica expects to extend its cash runway into mid-2027, allowing the company to advance its commercial strategy for YCANTH, its treatment for molluscum contagiosum, and further develop its pipeline. The company also plans to continue preparation for its Phase 3 clinical program for VP-315 for basal cell carcinoma and begin enrollment in its Phase 3 trial for common warts in the U.S. before the end of 2025.

TD Cowen acted as the sole placement agent for the financing.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Investing.com -- Scienture Holdings Inc (NASDAQ:SCNX) stock surged 61.4% after the company announced it has begun commercial sales and fulfillment of the first customer orders for Arbli™, its FDA-approved oral suspension formulation of losartan potassium.

Arbli™ is the first ready-to-use oral suspension of losartan potassium to receive FDA approval, providing an alternative for patients who cannot take solid dosage forms. The product enters a substantial market, with U.S. losartan sales totaling approximately $256 million annually and over 71 million prescriptions written each year, according to IQVIA data.

The company has implemented a targeted outreach campaign to healthcare professionals and has secured PBM-Led GPO agreements to expand commercial coverage and formulary access. Scienture has also established multiple commercial group purchasing organization agreements, extending Arbli’s market access to over 2,500 healthcare institutions nationwide, representing an estimated 20% of the U.S. institutional market.

"The start of commercial sales for Arbli™ represents a major achievement for Scienture as we transition from development to execution," said Narasimhan Mani, President and co-CEO of Scienture. "As promotional efforts expand and demand builds across retail, institutional and long-term care markets, we see significant potential for sustained adoption and value creation."

The company’s institutional agreements cover hospitals, clinics, nursing homes, specialty pharmacies, long-term care facilities, and ambulatory centers, establishing a broad footprint that strengthens Scienture’s commercial reach as it begins marketing this differentiated product.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.