Live Markets: Drug distributors' M&A race likely at its peak

McKesson

27/11/2024 18:24

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    DRUG DISTRIBUTORS' M&A RACE LIKELY AT ITS PEAK
    The recent spree of acquisitions from major U.S. drug
distributors to boost their specialty medicines businesses have
likely reached its peak, according to Jefferies analysts.
    "While we think the strategic rationale for all of these
deals are sound, we believe this recent run of deals in the
space is likely the deal activity peak," the analysts say.
    Higher margins and growing demand for specialty medicines
that treat complex conditions such as rheumatoid arthritis and
cancer have encouraged drug distributors to double down on the
business.
    The trend, kicked off by Mckesson  MCK.N  in 2010 with its
acquisition of U.S. Oncology, has gained pace this year, with
more than $10 billion in spending in the past 12 months, the
brokerage says.
    McKesson recently bought a controlling stake in community
cancer center Florida Cancer Specialists & Research Institute's
business and administrative services unit for $2.49 billion. 
    Cardinal Health  CAH.N  has played "catch up" on this front,
spending more than $6 billion in four deals this year, while
peer Cencora  COR.N  struck a $4.6 billion deal earlier in the
month to add nearly 300 eye specialists to its portfolio of
physician management services.
    
    (Mariam Sunny)
    *****
    
    
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