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Omnicell, Inc. (OMCL - Free Report) recently completed the previously announced (Dec 2) acquisition of ReCept Holdings, Inc. The acquisition, priced at $100 million under the terms of the purchase agreement, was subject to fulfillment of customary adjustments as specified in the agreement and merger plan. The ReCept acquisition supports Omnicell’s Autonomous Pharmacy vision and is expected to broaden the company’s Advanced Services portfolio.
It is worth noting that the inclusion of ReCept’s specialty pharmacy management services for health systems, provider groups and federally qualified health centers (FQHCs) has extended Omnicell’s Advanced Services portfolio to serve the growing and complex specialty pharmacy market.
Per Omnicell management, ReCept’s specialty pharmacy management services capabilities complement the former’s intelligent infrastructure, thereby providing deeper knowledge to meet the rising demand for complex specialty medications management as part of a broader, more comprehensive medication management strategy.
Few Words on ReCept
ReCept helps health systems and other provider organizations optimize their specialty pharmacy programs and the related pharmaceutical aspects of patient care by providing implementation and managed services. This complete solution assists on-site management, including payor contracting, staffing, licensing, quality assurance, 340B administration and preferred pricing agreements, all while placing the patient at the heart of care.
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Financial Significance of the Buyout
The ReCept business generated annual recurring revenues of $24 million (unaudited) for the 12 months ended Sept 30, 2021, and is projected to boost Omnicell’s Advanced Services' revenue growth. The buyout deal was funded with cash on Omnicell's balance sheet, and is expected to be accretive to Omnicell’s non-GAAP EBITDA starting from the first quarter of 2023.
Industry Prospects
Per a report published in GlobeNewswire, the global specialty pharmaceuticals market is set to witness a CAGR 39.6% during 2020 to 2026. The market was valued at $34.09 billion in 2020 and is anticipated to reach $252.42 billion by 2026.
Notable Developments
Omnicell engaged in a number of significant developments in November 2021.
The company partnered with Fresenius Kabi to bring new innovative pharmacy technology to U.S. hospitals and health systems to support safety and efficiency in dispensing controlled substances in patient care areas. This collaboration will combine Omnicell’s Controlled Substance Dispenser automation workflow with Fresenius Kabi Simplist MicroVault pre-filled syringes to offer healthcare providers advanced tools and technology for safe and efficient dispensing of controlled substances.
Omnicell’s Central Pharmacy Dispensing Service was selected by the Tucson VA Medical Center to boost patient safety, enhance operational efficiency and optimize inventory management for its central pharmacy operations. This expanded technology partnership with Tucson VA Medical Center is expected to help reduce dispensing errors, replace manual processes and advance pharmacists’ practice. Notably, Tucson VA Medical Center is the first Veterans Administration facility to implement this comprehensive as-a-service model.
Share Price Performance
The stock has outperformed its industry over the past year. It has rallied 50.5% against the industry’s 39.3% decline.
Zacks Rank and Key Picks
Currently, Omnicell carries a Zacks Rank #2 (Buy).
Apollo Endosurgery has a long-term earnings growth rate of 7%. The company‘s earnings surpassed estimates in the trailing four quarters, delivering a surprise of 25.6%, on average.
Apollo Endosurgery has outperformed its industry over the past year. APEN has gained 129.1% compared with the industry’s 11.1% growth.
Cerner has a long-term earnings growth rate of 13.3%. The company’s earnings surpassed estimates in the trailing three of the trailing four quarters and met estimates in one, delivering a surprise of 3.2%, on average.
Cerner has outperformed its industry over the past year. CERN has gained 18.8% against the industry’s 39.3% decline.
West Pharmaceutical has a long-term earnings growth rate of 27.6%. The company’s earnings surpassed estimates in the trailing four quarters, delivering an average surprise of 29.4%.
West Pharmaceutical has outperformed its industry over the past year. WST has rallied 65.2% compared with the industry’s 16.2% rise.
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Omnicell (OMCL) Closes ReCept Holdings Acquisition Deal
Omnicell, Inc. (OMCL - Free Report) recently completed the previously announced (Dec 2) acquisition of ReCept Holdings, Inc. The acquisition, priced at $100 million under the terms of the purchase agreement, was subject to fulfillment of customary adjustments as specified in the agreement and merger plan. The ReCept acquisition supports Omnicell’s Autonomous Pharmacy vision and is expected to broaden the company’s Advanced Services portfolio.
It is worth noting that the inclusion of ReCept’s specialty pharmacy management services for health systems, provider groups and federally qualified health centers (FQHCs) has extended Omnicell’s Advanced Services portfolio to serve the growing and complex specialty pharmacy market.
Per Omnicell management, ReCept’s specialty pharmacy management services capabilities complement the former’s intelligent infrastructure, thereby providing deeper knowledge to meet the rising demand for complex specialty medications management as part of a broader, more comprehensive medication management strategy.
Few Words on ReCept
ReCept helps health systems and other provider organizations optimize their specialty pharmacy programs and the related pharmaceutical aspects of patient care by providing implementation and managed services. This complete solution assists on-site management, including payor contracting, staffing, licensing, quality assurance, 340B administration and preferred pricing agreements, all while placing the patient at the heart of care.
Financial Significance of the Buyout
The ReCept business generated annual recurring revenues of $24 million (unaudited) for the 12 months ended Sept 30, 2021, and is projected to boost Omnicell’s Advanced Services' revenue growth. The buyout deal was funded with cash on Omnicell's balance sheet, and is expected to be accretive to Omnicell’s non-GAAP EBITDA starting from the first quarter of 2023.
Industry Prospects
Per a report published in GlobeNewswire, the global specialty pharmaceuticals market is set to witness a CAGR 39.6% during 2020 to 2026. The market was valued at $34.09 billion in 2020 and is anticipated to reach $252.42 billion by 2026.
Notable Developments
Omnicell engaged in a number of significant developments in November 2021.
The company partnered with Fresenius Kabi to bring new innovative pharmacy technology to U.S. hospitals and health systems to support safety and efficiency in dispensing controlled substances in patient care areas. This collaboration will combine Omnicell’s Controlled Substance Dispenser automation workflow with Fresenius Kabi Simplist MicroVault pre-filled syringes to offer healthcare providers advanced tools and technology for safe and efficient dispensing of controlled substances.
Omnicell’s Central Pharmacy Dispensing Service was selected by the Tucson VA Medical Center to boost patient safety, enhance operational efficiency and optimize inventory management for its central pharmacy operations. This expanded technology partnership with Tucson VA Medical Center is expected to help reduce dispensing errors, replace manual processes and advance pharmacists’ practice. Notably, Tucson VA Medical Center is the first Veterans Administration facility to implement this comprehensive as-a-service model.
Share Price Performance
The stock has outperformed its industry over the past year. It has rallied 50.5% against the industry’s 39.3% decline.
Zacks Rank and Key Picks
Currently, Omnicell carries a Zacks Rank #2 (Buy).
A few other stocks in the broader medical space the investors can consider are Apollo Endosurgery, Inc. , Cerner Corporation and West Pharmaceutical Services, Inc. (WST - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Apollo Endosurgery has a long-term earnings growth rate of 7%. The company‘s earnings surpassed estimates in the trailing four quarters, delivering a surprise of 25.6%, on average.
Apollo Endosurgery has outperformed its industry over the past year. APEN has gained 129.1% compared with the industry’s 11.1% growth.
Cerner has a long-term earnings growth rate of 13.3%. The company’s earnings surpassed estimates in the trailing three of the trailing four quarters and met estimates in one, delivering a surprise of 3.2%, on average.
Cerner has outperformed its industry over the past year. CERN has gained 18.8% against the industry’s 39.3% decline.
West Pharmaceutical has a long-term earnings growth rate of 27.6%. The company’s earnings surpassed estimates in the trailing four quarters, delivering an average surprise of 29.4%.
West Pharmaceutical has outperformed its industry over the past year. WST has rallied 65.2% compared with the industry’s 16.2% rise.