William Blair & Company Initiates Coverage of Catalyst Health Solutions, Inc. With Market Perform Rating

William Blair & Company initiated research coverage of Catalyst Health Solutions, Inc. (Nasdaq: CHSI) ($20.54), a full-service pharmacy benefit manager through subsidiary Catalyst Rx, with a Market Perform rating and an Aggressive Growth company profile.

Analysts Amanda Murphy and John Kreger estimated that the company would generate earnings per share of $1.38 in 2009 and $1.60 in 2010.

�Catalyst Health Solutions has identified a niche market in the provision of pharmacy benefit management services, with a focus on providing high-touch customer service as well as highly customizable PBM services,� Murphy said. �This offering is targeted to small to midsize employers and regional health plans (less than 200,000 lives), which historically have not been a focus for the larger PBMs. In addition, Catalyst�s transparent contract economics appeal to those clients looking for more control over PBM economics, such as public entities.�

Murphy continued, �We continue to like the PBM space overall, given our view that the industry is characterized by strong fundamentals, including underlying growth in utilization driven by the aging population, margin expansion opportunities inherent in the business model, and strong cash flow generation. We also believe the PBMs, which are among the only available and proven healthcare cost-containment mechanisms, should become increasingly valuable over time as healthcare funding is reaching a crisis state in this country. Catalyst Rx provides the opportunity, in our view, for small- to midcap investors to take advantage of an industry characterized by robust earnings growth.�

William Blair & Company, L.L.C. is a global investment firm offering investment banking, asset management, equity research, institutional and private brokerage, and private capital to individual, institutional, and issuing clients. Since 1935, we have been committed to helping clients achieve their financial objectives. As an independent, employee-owned firm, our philosophy is to serve our clients' interests first and foremost. For more information, please visit www.williamblair.com.

For important disclosures and information regarding the firm�s rating system, valuation methods, and potential conflicts of interest, please visit: http://www.williamblair.com/Pages/news_story_dept.asp?uid=1476&depID=4

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Catalyst Health Solutions, (MM) (NASDAQ:CHSI)
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