An “extremely lucrative deal” to distribute pharmaceutical drugs to Walgreens stores for 10 years has pumped up Chesterbrook’s AmerisourceBergen (ABC) into an industry heavyweight that is now poised to flex its muscle in emerging new opportunities.
With U.S. Food and Drug Administration approval of the country’s first biosimilar drug in March, “we believe ABC is ‘the pony to ride’ to capture upside related to the estimated $65 billion in biologics that may face biosimilar competition during 2015-2019,” UBS analyst Steven Valiquette said in an Investors Business Daily report on Nasdaq.com.
The company’s stock has leaped 26 percent already this year on the heels of five consecutive quarters of double-digit growth in earnings and revenue as well as a bold move into the animal health market.
“They’re in a very competitive position,” Evercore ISI analyst Ross Muken said in the article. “They’ve had a lot of share gains in the last several years. They’ve done well in the specialty market and have executed well. They’re as competitive as they’ve ever been.”
While the incredible Walgreens boost may now be coming back to Earth for AmerisourceBergen, its newfound buying power and value to the retail giant have generated much optimism about the future.
“A lot of investors believe that at some point in the future, Walgreens could buy the rest of AmerisourceBergen,” Valiquette said. “One reason why AmerisourceBergen’s stock has done so well is because it has takeout potential.”
Inflation in generic drug prices is yet another factor helping pad ABC’s bottom line.
Read much more analysis about how far AmerisourceBergen has come in two years and where it is positioned in the market going forward on Nasdaq.com here.