Prescriptions Drive Walgreen Profits
Deerfield, Ill. Walgreen posted a 5% rise in second-quarter profits that just beat Wall Street’s expectations, but investors greeted the news Monday with enthusiasm, driving the share price sharply higher.
The drug store chain said improved cost controls helped offset sluggish holiday sales.
Walgreen reported earnings of $685.9 million, up from $651.9 million a year ago.
Sales rose 11% to $15.39 billion, from $13.93 billion. Same-store sales gained 4.7%.
The company opened 121 new stores in the quarter and had a net gain of 240 stores after relocations and closings in the first half of the year. It is on track to open 550 new drug stores this year, with a net increase of more than 475.
Walgreens said it slowed operating expense growth to 11%, from more than 21% a year earlier. Part of the reduction was achieved by adjusting store hours.
Prescription sales, which accounted for just under two-thirds of Walgreen’s revenue in the quarter, grew 11% in the quarter.
In a conference call with analysts, Walgreen executives said the company had just reached a deal to sell specialty pharmacy services— drugs and consultation for patients with illnesses such as cancer and arthritis—to health insurance-plan provider Prime Therapeutics, which manages health plans for 20 million people.
Walgreens, Prime in multi-year deal
DEERFIELD, Ill. Walgreens has reported that under a new, multi-year contract, it will be the exclusive specialty pharmacy provider for Prime Therapeutics. Walgreens will provide the service through its Pittsburgh-based Medmark, A Walgreens Specialty Pharmacy.
Prime Therapeutics, based in St. Paul, Minn., is a pharmacy benefit manager collectively owned by 10 Blue Cross and Blue Shield plans, subsidiaries or affiliates of those plans. The contract serves specialty pharmacy users among more than 20 million health plan members.
“While we can’t predict the exact value of this contract, the annual specialty pharmacy spending by Prime’s total client base is significant,” said Stanley Blaylock, president of Walgreens Health Services. “Our partnership with Prime gives us the opportunity to manage specialty pharmaceuticals that are covered under both the medical and pharmacy benefit. We believe many – if not most – of those plans will use our services through Prime over time.
According to Walgreens, the services provided by Medmark will be part of Prime Therapeutics’ new Triessent pecialty pharmacy program. Medmark will provide Prime with medication fulfillment and complement Prime’s existing patient education and clinical support services. Its pharmacists and nurses will counsel patients on the importance of medication adherence and the management of side effects.
Dick’s expands Major League Soccer sponsorship
PITTSBURGH Dick’s Sporting Goods has become the official sporting goods retail sponsor of Major League Soccer as well as ten of the 14 teams playing in the league in 2008. According to the Dick’s and MLS, the five-year agreement is designed to correspond with the growth plans of the country’s largest sporting goods retailer, allowing Dick’s to become an official sponsor of each of the remaining teams as it begins opening stores in those markets, culminating in 2011 when the sponsorship will cover every team in the league exclusively.
“Our relationship with Major League Soccer and the U.S. Soccer Federation further demonstrates the commitment Dick’s Sporting Goods has made to the game of soccer in the United States,” said Jeffrey Hennion, evp and chief marketing officer of Dick’s Sporting Goods. “This agreement gives us the ability to reach players and fans of the game at every level, including the newly created U.S. Soccer Development Academy, which will provide the most elite youth soccer clubs in the country the infrastructure and curriculum needed to compete at an international level for years to come.”
The enhanced agreement between Dick’s Sporting Goods and MLS will also include the presenting sponsorship of First Kick, the opening week of the 2008 MLS regular season that will feature six nationally televised games on ESPN2, Fox Soccer Channel, HDNet and Telefutura, starting Saturday, March 29 when the Los Angeles Galaxy face off against the Colorado Rapids at Dick’s Sporting Goods Park in Commerce City, Colo.