Specialty pharmacy sees sales edge up in 1Q
FLINT, Mich. — Diplomat Pharmacy Inc. has acquired WRB Communications Inc., a Chantilly, Va.-based operator of health care contact centers, in a $29 million deal.
Under the agreement, announced late Monday, Diplomat is paying WRB $24.5 million in cash and $4.5 million in common stock. Plans call for WRB to join Diplomat’s Envoy Health Management subsidiary as part of its commercialization support services for manufacturers, biotech firms and other service companies.
The nation’s largest independent specialty pharmacy, Diplomat said WRB and EnvoyHealth will offer solutions to meet rising demand for patient access, medical information, customer care, reimbursement, inside sales and tele-detailing, and unique distribution.
“This is a strategic acquisition in line with our growth strategy, and the hub services market represents an exciting and growing opportunity for Diplomat,” Phil Hagerman, chairman and chief executive officer of Diplomat Pharmacy, said in a statement.
“With the increased demand for outsourcing from small and emerging biotech, WRB adds needed capabilities to Diplomat. Continuing to grow our service offerings will engage us earlier in the drug development life cycle, tying us closer to our manufacturing partners and creating additional sell-in channels at each development stage.”
The hub services market presents “an exciting opportunity” for Diplomat, according to Jennifer Cretu, senior vice president of pharma services and marketing.
“With the growing need for hub services, we are proud to enhance EnvoyHealth with WRB. Pharmaceutical Commerce magazine recently published its 2017 Hub Services report, which highlights the growing need for hub services by pharma due to the rise of specialty,” Cretu explained. “Several of the industry drivers that were mentioned fit our wheelhouse, such as greater emphasis on assisting providers with prior authorizations, developing a comprehensive outcomes dashboard, expanding patient assistance due to increasingly complex treatment protocols, and controlling the cost curve through outcomes utilization.”
WRB specializes in relationship management programs and is a leading provider of multichannel service center solutions for pharmaceutical manufacturers, biotech, medical device organizations and other health care industries. Last year, WRB generated $15 million in sales.
“Diplomat will connect WRB with the resources it needs to continue its growth and expand its services,” stated WRB president Ron Abel. “Diplomat has many relationships with pharmaceutical manufacturers, payors and providers that can benefit from WRB’s customer relationship management services.”
Also on Monday, Diplomat reported first quarter financial results. The company said that for the quarter ended March 31, revenue rose 8% to $1.079 billion from $996 million a year earlier. Prescriptions dispensed in the quarter totaled 220,000, compared with 232,000 in the prior-year period.
Net income attributable to Diplomat for the first quarter was $4.4 million, or 6 cents per diluted share, compared with $15.4 million, or 23 cents per diluted share, a year ago. Adjusted earnings per diluted share were 19 cents in the 2017 quarter versus 23 cents in the prior-year period. Analysts’ consensus forecast was for adjusted EPS of 15 cents, according to Zacks Investment Research.
Factors impacting earnings results, Diplomat said, included increased in direct and indirect remuneration (DIR) fees, a continued shift in the medication mix toward higher-priced but lower-margin drugs, and increased selling, general and administrative expenses.