On Air Now

Upcoming Shows

Program Schedule »

Tune in to Listen

1440 AM Green Bay, WI

Weather

Current Conditions(Green Bay,WI 54303)

More Weather »
47° Feels Like: 44°
Wind: SE 6 mph Past 24 hrs - Precip: 0”
Current Radar for Zip

Tonight

Mostly Clear 31°

Tomorrow

Partly Cloudy 56°

Sat Night

Light Rain Late 47°

Alerts

  • 0 Severe Weather Alerts
  • 0 Cancellations

CVS to buy specialty drug infusion business for $2.1 billion

A CVS pharmacy is seen in New York City July 28, 2010. REUTERS/Mike Segar
A CVS pharmacy is seen in New York City July 28, 2010. REUTERS/Mike Segar

(Reuters) - CVS Caremark Corp will buy drug infusion services provider Coram LLC for $2.1 billion, allowing the company to bolster its pharmacy benefits management business by offering cost-effective delivery of specialty drugs.

Most pharma companies are increasingly focused on developing niche drugs for complex disorders as several mass market drugs lose patent protection.

Pharmacy benefit managers (PBMs) such as CVS, which administer prescription drug benefits for employers and health plans, can offer greater value to clients by diversifying their offerings.

CVS, which operates the No. 2 U.S. drugstore chain and the second-largest PBM business, said the acquisition would expand its services to include infusion therapy, which involves administering medication through a needle or catheter to patients too severe to be treated orally.

"The addition of Coram further increases the company's attractiveness to PBM customers seeking to control rising specialty (prescription) costs," Jefferies analysts wrote in a note.

Coram, owned by Blackstone Group -controlled Apria Healthcare Group Inc , provides infusion services primarily at patients' homes at a far lesser cost than if these were to be done at hospitals or physicians' offices, CVS said.

Such services will become increasingly important as providers look to manage the overall cost of care delivery, J.P. Morgan analyst Lisa Gill wrote in a note.

CVS, whose Caremark PBM unit competes with Express Scripts Holding Co , said Coram would add $1.4 billion to revenues in the first year after the deal closes and 3 to 5 cents per share to CVS's adjusted earnings per share in 2015.

CVS expects the deal to close in the first quarter of 2014.

Barclays served as CVS's financial adviser on the deal, while Sullivan and Cromwell LLP and Dechert LLP served as legal advisers.

Apria was advised by Goldman, Sachs & Co and Blackstone Advisory Partners, while Simpson Thacher & Bartlett LLP served as the legal adviser.

CVS shares were up 1 percent at $66.88 on the New York Stock Exchange on Wednesday.

(Reporting by Phil Wahba in New York and Esha Dey and Zeba Siddiqui in Bangalore; Editing by Gerald E. McCormick and Sriraj Kalluvila)

Comments