OCR Seals Distribution Rights

Advanced Care Scripts (ACS), a part of Omnicare Inc.’s (OCR - Snapshot Report) Specialty Care Group, has been recently included in the limited distribution network for Lundbeck’s Xenazine (tetrabenazine).

Xenazine is the only treatment for chorea which has been approved by the U.S. Food and Drug Administration (FDA). Chorea is a primary indication of Huntington’s disease, as clinical studies have revealed that roughly 90% of those who suffer from chorea are affected by Huntington’s disease.

Management at Omnicare’s Specialty Care Group is enthused about its addition to the limited distribution network for the contemporary drug. The company is also the exclusive provider of Xenazine in the long-term care channel. The business model of the Specialty Care Group is best suited to dispense a specialty drug like Xenazine via its specialty pharmacy, ACS, to the target population.

Revenues from the Specialty Care Group surged 25.7% year over year to $330.1 million in the second quarter. Omnicare is focused on exploiting new operating platforms to accelerate growth for the Specialty Care Group.

Omnicare is a market leading provider of long-term care pharmacy services and health care environment for individuals directly and indirectly, through subsidiaries across North America. It competes with PharMerica Corporation (PMC - Snapshot Report) and National Healthcare Corp. (NHC) in certain niche segments.

Omnicare’s business model ensures that it is well placed to sustain profitability in the long-run. Its performance in the most recent quarter negated external pricing pressure and reimbursement cuts.

Moreover, generics coming to the market in the next few quarters present a major opportunity due to the company’s direct access to manufacturers and current greater exposure to the institutional pharmacy channel than in the past couple of years.

The stock currently retains a Zacks #1 Rank, which translates into a short-term Strong Buy rating.