McKesson posts 5% lift in Q1 revenues
SAN FRANCISCO — McKesson on Thursday reported revenues of $49.7 billion for the first quarter, up 5% compared to a year ago.
For the period ended June 30, net income was $542 million, or $2.38 a share, compared with $576 million, or $2.45 cents a share, a year earlier. Adjusted earnings rose to $3.50 a share from $3.14.
“McKesson’s first-quarter operating results represent a solid start to the fiscal year, consistent with our expectations,” said John H. Hammergren, chairman and chief executive officer.
For the first quarter, McKesson generated cash from operations of $1.9 billion, and ended the quarter with cash and cash equivalents of $4.7 billion. During the quarter, McKesson paid $1.8 billion for acquisitions, $66 million in dividends and had internal capital spending of $114 million.
“We operate businesses that continue to produce strong cash flow results,” Hammergren added. “Our management team is focused on driving long-term value for our shareholders. We were pleased to have successfully closed several acquisitions during the quarter, further extending our strong track record of value creation through our portfolio approach to capital deployment.”
McKesson reaffirmed its adjusted earnings guidance of $13.43 to $13.93 per share for the year ending in March 2017.
In terms of revenues by segment, Distribution Solutions revenues were $49.0 billion for the quarter, up 5% both on a reported basis and on a constant currency basis.
North America pharmaceutical distribution and services revenues of $41.2 billion for the quarter were up 4% on a reported basis and 5% on a constant currency basis, primarily reflecting market growth, acquisitions and our mix of business.
International pharmaceutical distribution and services revenues were $6.3 billion for the quarter, up 8% on a reported basis and 9% on a constant currency basis, driven by acquisitions and market growth.
Medical-Surgical distribution and services revenues were up 2% for the quarter, driven by market growth, partially offset by the prior year sale of the ZEE Medical business in the second quarter of Fiscal 2016.
In the first quarter, Distribution Solutions GAAP operating profit was $928 million and GAAP operating margin was 1.89%. First-quarter adjusted operating profit was $1.1 billion, down 1% from the prior year on a constant currency basis. Adjusted operating margin for the Distribution Solutions segment was 2.29% on a constant currency basis.
Technology Solutions revenues were down 2% on a reported basis and 1% on a constant currency basis in the first quarter, primarily driven by an anticipated year-over-year decline in our hospital software business and the prior year sale of the nurse triage business in the first quarter of Fiscal 2016, partially offset by growth in our other technology businesses.
Technology Solutions GAAP operating profit was $168 million for the first quarter and GAAP operating margin was 23.20%. On a constant currency basis, adjusted operating profit was $179 million for the first quarter and adjusted operating margin was 24.69%
Ice Bucket Challenge leads to ALS breakthrough
WASHINGTON — The ALS Ice Bucket Challenge, which went viral in 2014 as a fundraiser for research, has helped identify a new gene behind the neurodegenerative disease ALS, or Lou Gehrig's disease, the ALS Association announced.
According to a paper published in Nature Genetics, researchers have identified a new ALS gene, NEK1, which now ranks among the most common genes that contribute to the disease, providing scientists with another potential target for therapy development. This was the largest-ever study of familial (inherited) ALS, involved contributions from over 80 researchers in 11 countries, and was led by John Landers, Ph.D., of University of Massachusetts Medical School in Worcester, Mass. and Jan Veldink, Ph.D., of University Medical Center Utrecht, in The Netherlands.
“The discovery of NEK1 highlights the value of ‘big data’ in ALS research,” said Lucie Bruijn, Ph.D., M.B.A. “The sophisticated gene analysis that led to this finding was only possible because of the large number of ALS samples available. The ALS Ice Bucket Challenge enabled The ALS Association to invest in Project MinE’s work to create large biorepositories of ALS biosamples that are designed to allow exactly this kind of research and to produce exactly this kind of result.”
ALS is a progressive neurodegenerative disease that affects nerve cells in the brain and the spinal cord. Eventually, people with ALS lose the ability to initiate and control muscle movement, which leads to total paralysis and death, usually within two to five years of diagnosis. While 10 percent of ALS is familial, meaning it’s genetic, the other 90 percent of ALS cases are considered sporadic, or without a family history. However, it’s very likely that genetics contribute, directly or indirectly, to a much larger percentage of ALS cases.
The ALS Association announced funding for Project MinE, an international effort to sequence the genomes of at least 15,000 people with ALS, in October 2014, which established the U.S. arm of the initiative with Dr. Landers’ research efforts. Project MinE was the brainchild of entrepreneur, and person living with ALS, Bernard Muller, who, along with another patient, Robbert Jan Stuit, saw an opportunity to expedite genetic understanding of the disease after a tour of a Research ALS Center in the Netherlands where thousands of DNA samples were stored and not being used because it was too expensive to do the research the Center wanted to do.
“The ALS Ice Bucket Challenge enabled us to secure funding from new sources in new parts of the world," Muller said. "Thankfully, The ALS Association brought Project MinE to the United States. This transatlantic collaboration supports our global gene hunt to identify the genetic drivers of ALS. I’m incredibly pleased with the discovery of the NEK1 gene adding another step towards our ultimate goal, eradicating this disease from the face of the earth."
NEK1 was discovered through a genome-wide search for ALS risk genes in over 1,000 ALS families, and was independently found through different means in an isolated population in The Netherlands. Further analysis in over 13,000 sporadic ALS individuals compared to controls again revealed an overrepresentation of variants in the same gene. The variations discovered in the gene sequence are predicted to lead to gene loss of function. NEK1 is known to have multiple roles in neurons, including maintenance of the cytoskeleton that gives the neuron its shape and promotes transport within the neuron. In addition, NEK1 has roles in regulating the membrane of the mitochondrion, which supplies energy to neurons and in repairing DNA. Disruption of each of these cellular functions through other means has been linked to increased risk of ALS.
Understanding NEK1’s role in disease will provide an important new target for therapy development. The ALS Associations is currently funding Drs. John Landers and Catherine Lutz, Jackson Laboratories, to develop novel mouse models to better understand the consequences of the loss of the protein’s function for the ALS disease process. They will provide rapid access to these models for the broader ALS research community as soon as they are generated. These tools are important for ALS drug development.
Medisafe rolls out commercial offering for pharmaceutical companies
BOSTON — After several test pilots over the past year and a half, medication management platform Medisafe has launched Medisafe for Pharma.
Medisafe announced it has now bundled a number of services into a software license that helps pharmaceutical companies increase adherence to their medications while gaining actionable de-identified insights generated by complex self-learning algorithms analyzing billions of user engagement data points Medisafe has collected to date.
Medisafe's pharma offering simultaneously addresses all three major challenges attributed to non-adherence: patient quality of care (e.g. higher emergency and mortality rates), health care system costs (e.g. higher hospitalization rates) and lost revenues (e.g. fewer prescription refills). Pharma and pharmacies share the burden of lost revenues, estimated at $188 billion annually in the U.S. alone.
According to the company, Medisafe for Pharma enables pharmaceutical companies to:
- significantly improve adherence from industry average rates
- co-brand and customize the Medisafe interface for their patients
- target and engage patients with educational content (e.g. videos, articles), patient assistance programs (e.g. copay cards), telecare services and other resources into the Medisafe "feed"
- monitor ongoing adherence showing demographic trends, cohort-level insights, competitive benchmarking, etc.
- automatically populate complex dosing schedules into the app to eliminate challenges of manual entry and ensure users receive accurate and timely reminder notifications
- collaborate with Medisafe on patient recruitment
- offer prescribers a provider-patient care management interface
"At Medisafe we are privileged to help patients stay in control of their health while offering pharma a vehicle to recoup billions of dollars in lost revenue and sustain their level of R&D investment towards therapies that improve and extend life," said Jon Michaeli, Medisafe's EVP of marketing and business development. "Medisafe for Pharma is an essential 'Beyond the Pill' initiative for any pharmaceutical or life sciences company looking to increase adherence while engaging and learning from patients in the real world. Medisafe is uniquely positioned to produce high-ROI engagements given the millions invested, experience amassed, and user base established in the three plus years since its launch."
Medisafe's AI-driven personalized user interface (UI) delivers a tailored contextual experience to each user, and the company's role as an unbiased third party assists patients with all of their medications to improve their health holistically.