Cardinal Health lifts annual profit outlook on strength in specialty medicines unit
Adds comments from conf call in paragraphs 4,8,9 details in paragraph 7
By Mariam Sunny
Nov 1 (Reuters) -Cardinal Health CAH.N raised its fiscal 2025 adjusted profit forecast on Friday as strong demand for costly specialty medicines and branded drugs drove sales at its pharmaceuticals unit, sending shares of the company up nearly 7%.
Drug distributors in the United States are expanding their presence in the specialty medicines market that treats complex conditions like rheumatoid arthritis and cancer due to their high profit margins.
The company struck a $1.12 billion deal in September to buy community cancer center operator Integrated Oncology Network to join its rivals McKesson MCK.N and Cencora COR.N in expanding into cancer care.
Cardinal will evaluate additional opportunities in specialty medicines, CEO Jason Hollar said on a call with analysts.
The company now expects an adjusted per-share profit of $7.75 to $7.90 for the fiscal year ending June 2025, up from the previous $7.55 to $7.70. Analysts were expecting an annual profit of $7.63 per share, according to data compiled by LSEG.
The pharma and specialty solutions unit, which distributes branded and specialty medicines, as well as over-the-counter products, brought in first-quarter sales of $48 billion, beating expectations of $46.86 billion.
Cardinal expects a 2% to 4% revenue decline from the unit in the fiscal year, compared with a 4% to 6% decline forecast previously, as it anticipates increased demand for specialty medicines and GLP-1 weight-loss drugs.
The improvement is expected to help offset a hit from the loss of contracts from UnitedHealth Group's UNH.N pharmacy benefit management unit OptumRx, one of its largest customers.
"GLP-1s are continuing to contribute and grow more so than we had originally expected," CFO Aaron Alt said.
Total revenue for the first quarter came in at $52.3 billion, beating estimates of $50.9 billion.
On an adjusted basis, Cardinal reported a quarterly profit of $1.88 per share, topping expectations of $1.62 apiece.
Reporting by Mariam Sunny in Bengaluru; Editing by Vijay Kishore
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