DUBLIN-LISTED healthcare services group United Drug is to sell its stake in its UK homecare venture to partner Medco Health Solutions. The value of the deal, which will see US-based Medco take over United Drug’s 50 per cent stake in the entity it helped set up in 2009, was not disclosed. The deal is to be completed next month.
The partnership focused on the pharmacy homecare market in the UK, aimed at patients with chronic conditions. It hoped to serve about 8,000 patients this year.
“We have enjoyed an excellent partnership with Medco over the last two years and the business has generated significant momentum,” United Drug chief executive Liam FitzGerald said. The company said it would continue to work with Medco to provide clinical and logistics services in Britain. The business will be integrated into Medco International, which is headquartered in Amsterdam, and will offer a range of services from prescription drug dispensing and home delivery to home nursing support.
“In the two years we have worked with United Drug, we have confirmed the need and potential to drive speciality pharmacy homecare as a means to improve patient experience and outcomes, while relieving the NHS of a significant financial burden,” said John Driscoll, president of new markets with Medco Health Solutions.
“United Drug has been an important partner to us and we look forward to their continued support as we build out our pharmacy homecare business.”
NCB analyst Conor Hartnett said the announcement was “disappointing”, given the “significant momentum” that had been built up in the joint venture since it was set up.
“However, as a result of Express Script announcing its interest to acquire Medco in the US, this triggered a change of control clause in the joint venture agreement,” he wrote in a note.
“United Drug decided not to acquire Medco’s stake as it was concerned that Medco wouldn’t be able to guarantee some of the services and IT capabilities required for the business in the future.”
Davy said the financial impact would be modest, as the venture was forecast to break even in the year to September 2012. However, the announcement was something of “strategic about-turn” for the group, Davy said.
“This was one of the specialities that management felt could be a substantial driver of growth over the coming years alongside its more developed contract packaging and contract sales/marketing divisions,” said analyst Jack Gorman.
