SXC Health Solutions Corp. (SXCI:US) climbed 6.4 percent after JMP Securities analysts said the pharmacy benefits manager was selected to handle Indiana’s Medicaid program.
SXC rose to $78.87 at the close of New York trading, the biggest increase since Jan. 10. The Lisle, Illinois-based company has gained 40 percent this year.
The benefits manager won a competitive bidding process to begin contract talks with the Indiana Department of Administration, Constantine Davides, an analyst for JMP Securities, wrote in a note. The contract’s value may be $32 million, he estimated.
The choice highlighted SXC’s “ability to administer a high level of customization and service, particularly in the more complex Medicaid market,” Davides wrote in the note. He reiterated his rating of Market Outperform and put a price target on the stock of $79.
Tony Perkins, a spokesman for SXC, declined to comment.
SXC was selected over the incumbent pharmacy benefits manager ACS Healthcare, Davides said.
SXC has been cited by analysts as a possible takeover target after St. Louis-based Express Scripts Inc.’s $29.1 billion acquisition of Medco, which was cleared by U.S. regulators yesterday. SXC may attract suitors from UnitedHealth Group Inc. to Catalyst Health Solutions Inc., according to Wall Street Access and Leerink Swann LLC last month.
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