McKesson Corp., which is partnering with the federal government to distribute COVID-19 vaccines by Moderna, as well as ancillary supply kits, expects its earnings per share to reach up to $16.50. Its stock was trading at $183.27 at the market close on Jan. 12. McKesson is not distributing the Pfizer coronavirus vaccine.
Although the Irving, Tex.-based wholesale drug distributor has worked with the federal government in the past to distribute H1N1 vaccines, Chief Financial Officer Britt Vitalone during a presentation at the Annual J.P. Morgan Healthcare Conference said COVID-19 vaccine distribution was more complex and “there are many factors that go into vaccine distribution, you should not expect this to look like the same economics as H1N1.”
And there’s much less certainty around timing and available quantities of the COVID-19 vaccine, CEO Brian Tyler said. But, the company’s distribution of the Moderna vaccine has “gone very well and on schedule,” he said, adding that throughout the COVID-19 pandemic, McKesson has not lost any production days in its U.S. distribution centers.
He said the experience in Europe has highlighted the critical role of the community pharmacist.
In November, the company partnered with Walgreens Boots Alliance to create a joint venture in Germany to empower and digitize independent pharmacists and scale McKesson’s European operations. Although Walgreens is technically owned by competitor AmerisourceBergen, “we’re used to competing in all the countries that we’re in,” Tyler said, adding that he doesn’t think it will influence the nature of the joint venture.
To streamline its European business, Tyler said McKesson has exited many stores over the past few years and worked to centralize and automate its back-office processes. The company first entered Europe in 2014 with its $5.4 billion acquisition of Germany’s Celesio, with the aim of gaining greater pricing leverage in the global drug industry. But, over the past four years, European reimbursement has been “volatile and unpredictable and resulted in pretty big headwinds for us,” Tyler said.
He said he hoped a recent agreement between the pharmaceutical industry and the National Health Service related to long-term reimbursement would act as a stabilizing factor.
Going forward, Tyler said he views oncology and biopharmaceutical services as growth areas for McKesson. Last month, the company launched Ontada, an analytic tool to help biopharmaceutical companies bring cancer drugs to market faster. The company has also entered into a partnership with Amgen to accelerate drug development.
The company’s independent pharmacy customers are some of the biggest buyers of generic drugs and biosimilars, Tyler said. He said McKesson has seen “good uptake and adoption” of the nearly two dozen biosimilar oncology therapeutics available in the market, which he said offer a similar therapeutic experience for patients at a lower cost than branded drugs. McKesson has the ability to promote biosimilar adoption to its 1,000 clinical providers, Tyler said.
“We’re still really in the early innings of this problem, with more biosimilar launches ahead of us than are behind us,” Tyler said.