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Cardinal Health (CAH) Buys Specialty Networks to Boost Workflow

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Cardinal Health (CAH - Free Report) recently announced its acquisition of Specialty Networks, a technology-enabled multi-specialty group purchasing and practice enhancement organization, for $1.2 billion in cash.

This acquisition is likely to create a platform for the company’s expansion across specialty therapeutic areas, along with creating increased clinical and economic value for more than 11,500 specialty providers.

Price Performance

For the past six months, CAH’s shares have gained 19.3% against the industry’s decline of 2.9%. The S&P 500 increased 7.5% in the same time frame.

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More on the Acquisition

The acquisition is indicative of Cardinal Health's strategic focus on investing to boost the company's Specialty business and supply cutting-edge personnel, capabilities, and technology that meet important demands for both customers and the business.

By strengthening the company's downstream provider-focused analytics capabilities and service offerings and by speeding upstream data and research opportunities with biopharma producers, this purchase enhances Cardinal Health's portfolio in important therapeutic areas. 

This purchase is likely to create increased clinical and economic value for 11,500 specialty providers, which include more than 7,000 physicians across 1,200 independent physician practices and enhance the capabilities of the company’s Specialty business along with supporting the ongoing build of Navista Network.

More on Specialty Networks

Across several specialty GPOs, including United Rheumatology, Gastrologix and GastroGPO, UroGPO, and others, Specialty Networks generates clinical and financial value for independent specialist physicians and partners.   

With the help of Specialty Networks' PPS Analytics, physicians, researchers, payers, and policymakers can gain valuable and actionable insights from the analysis of data from electronic medical records, practice management, imaging, and dispensing systems.

Industry Prospects

Per a report by Research and Markets, with a growth rate of 39.8%, the speciality pharmaceuticals market, which was valued at $92.50 billion in 2023, is expected to reach more than $965.54 billion by 2030.

Zacks Rank & Other Stocks to Consider

CAH carries a Zacks Rank #2 (Buy) at present.

Some other top-ranked stocks in the broader medical space are Universal Health Services (UHS - Free Report) , Integer Holdings Corporation (ITGR - Free Report) and Acadia Healthcare (ACHC - Free Report) .

Universal Health Services, carrying a Zacks Rank #2 at present, has an estimated growth rate of 4.4% for 2024. UHS’s earnings surpassed estimates in all the trailing four quarters, delivering an average surprise of 5.47%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

UHS’s shares have gained 14.0% in the past six months compared with the industry’s 9.0% rise.

Integer Holdings, presently carrying a Zacks Rank of 2, has an estimated long-term growth rate of 15.8%. ITGR’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 11.9%.

Integer Holdings’ shares have rallied 9.4% in the past six months compared with the industry’s 7.5% rise.

Acadia Healthcare, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 10.4%. ACHC’s long-term earnings are expected to grow at 11.2%.

Acadia’s shares have gained 4.7% in the past six months compared with the industry’s 9.0% rise.

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