Diplomat Pharmacy begins trading on NYSE
FLINT, Mich. — Shares of Diplomat Pharmacy, the nation's largest independent specialty pharmacy according to the company, officially began trading on Friday at a price that had reached more than $17 per share in mid-afternoon trading.
“Being a public company was just a natural progression for Diplomat and the time was absolutely right,” Phil Hagerman, CEO and chairman Diplomat Pharmacy, told Drug Store News. “We see the specialty pharmacy industry at a significant inflection point. There are really important trends – small biotech is emerging as a greater and greater player. These new limited-distribution drugs are creating both significant opportunities and significant challenges in the industry,” he said. “Equally important, the tremendous cost of these specialty drugs today is creating more than ever a cry for transparency in the model of how business is done.”
And Diplomat, which over the past seven years has grown at a 65% rate, is in the perfect position to deliver on the promise of specialty pharmacy, Hagerman said. “We’re now a perfect company to step up on this void – we’re the first pureplay specialty pharmacy in the space as a public company since Accredo Health in 2005 when they were bought by Medco. There is a tremendous appetite, we think, for specialty pharmacy as a separate channel to be able to invest in.”
With the proceeds from the IPO, Diplomat plans to look at strategic acquisitions to enhance the company’s position in the marketplace. “We made two great acquisitions in the past year. [As a public company] we have the ability to go out and strategically look at acquisitions,” he said.
Diplomat also will have the ability to grow organically. “We have a tremendous balance sheet to continue to build infrastructure if we need it, even though today we’ve got significant scale at our Great Lakes headquarters building. It just really puts us in the position as we grow also to go after larger and larger clients,” Hagerman added.
The initial public offering of 13.3 million shares of common stock started at a price to the public of $13 per share under the symbol "DPLO." In mid-afternoon trading on its first day, Diplomat’s share price was already up more than 30% to $17.
Diplomat is selling 10 million shares of common stock and certain selling shareholders of Diplomat are selling 3.3 million shares of common stock. The company and selling shareholders each have granted the underwriters a 30-day option to purchase up to an additional 1 million shares of common stock (an aggregate of 2 million shares of common stock) to cover over-allotments, if any.