Mead Johnson Has Right Market Formula

Some positive stock-market news on the health front today: Trading began in the stock of infant-formula maker Mead Johnson after its $720 million partial initial public offering.

Though there hasn’t been a successful IPO in months, investors appeared optimistic about Mead Johnson. Last night the company increased the size of its offering to 30 million shares at $24, at the top end of the estimated price range, due to “overwhelming demand for the stock,” Mead Johnson CEO Steve Golsby told the Health Blog.

The company had been planning to offer 25 million shares in the range of $21 to $24. Trading opened at $26 and the stock rose to $26.43, up 1.65%, in 4 p.m. composite trading on the New York Stock Exchange.

The company expects to grow globally in 2009, particularly in Asian and Latin American markets where birth rates are increasing, and by designing formulas that will improve infant allergies, immune systems and brain growth. Golsby said he didn’t see Mead Johnson expanding to target the adult population, but instead would remain “solely” a pediatric nutrition company.

Though Mead Johnson’s Enfamil brand is priced at a premium, the company said it hasn’t seen any softness in sales due to the economic downturn and doesn’t expect to. “Parents will not compromise on the nutrition they provide their kids,” Golsby said.

“We are clearly a premium priced pediatric nutritional company. We have to offer value,” he said. “We’re confident we will do that.”

Parent Bristol-Myers Squibb retains an 85% stake in the company, but “with its own publicly traded equity, Mead Johnson will be better able to accelerate its growth,” Bristol-Myers CEO James Cornelius said in a statement.

Despite Daschle, Health Reform To Be a ‘Central Focus’ of Obama Budget

Tom Daschle’s recent withdrawal from the HHS nomination has some people worried about the prospects for major health reform.

Those folks may take some solace in something a senior administration official told the Treatment, the New Republic’s nifty health-care blog: Health care will be a “central focus” of Obama’s first budget proposal.

The specifics are far from clear, but the comment is a signal that the administration isn’t giving up on health reform. In anonymous interviews with the New Republic, administration officials have said that people shouldn’t doubt the president’s commitment to the cause.

“I’ve been in meetings with him and it’s clear this guy is committed to getting health care and getting coverage to everybody,” one high-ranking member of the administration told TNR’s Jonathan Cohn. “There’s no question in my mind.”

Presidential budget proposals actually don’t have a lot of legal significance, since Congress passes a budget without a presidential signature, the blog notes. But they have a lot of influence in terms of laying out the president’s priorities.

Baseball Bonus: Cohn, a die-hard Red Sox fan, says Obama could learn a lot from baseball when it comes to picking a team for health reform. Daschle may have been the rare “five-tool” player on health. To replace him, Obama will likely have to draft several complementary players. Cohn names names in this entertaining video.