Credit Suisse https://www.credit-suisse.com hosted AmerisourceBergen’s (ABC) https://www.amerisourcebergen,com CEO Steve Collis, CFO, Jim Cleary, Group President, Bob Mauch, and Senior VP, Investor Relations, Bennett Murphy at a virtual meeting.
ABC expects to grow revenues at or above the market, given the company’s leading market share occurring in a fast-growing specialty market and achieve growth from key anchor customers in each market segment.
As for Global Commercialization Services, management notes that innovation will be a key organic growth driver as many innovative specialty products require the types of consulting and logistical services offered by the company.
The Animal Health business, ABC sees continued growth in the companion market driven by the growing human/pet bond, as well as the production market driven by global protein demand which is creating organic growth. Overall, ABC remains focused on growing operating income, with added benefits from capital deployment particularly with internal investment, which tends to have a higher ROI.
Subsequent to volume declines in April, ABC saw a recovery in their distribution volumes to pre-COVID levels by June, with stabilization occurring in July. Further, ABC saw July trends continuing into August with the rebound curve being consistent across distribution channels.
Separately, the rebound in specialty pharmaceutical volumes has been consistent with the recovery in the company’s traditional pharmaceutical volumes. Management expected oncology volumes to come back quickly (given the nature of oncology treatments), and non-oncology specialties have come back nicely as well.
Biosimilars while considered a future opportunity are here now. The increased utilization of biosimilars within the specialty physician services business has been driven by better than expected adoption rate among physicians, which created a benefit for ABC during FY20.
In fact, one of the key reasons behind ABC raising their FY20 guidance by more than the FY3Q20 beat was biosimilars in addition to the strong performance in operating expenses. Concerning the impact of the ACA repeal on the biosimilar market, ABC notes that making biosimilar adoption more difficult would seem to be counter to the goal of lowering costs for consumers.
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