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Cardinal Health's (CAH) New Buyout to Boost Medication Adherence
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Cardinal Health, Inc. (CAH - Free Report) recently announced that its digital health solutions company — Outcomes — has acquired ScalaMed. Following the buyout, the latter’s technology and assets will be transferred to Outcomes.
ScalaMed is a smart platform that transfers prescriptions directly to patients through a secure mobile app.
This latest acquisition is likely to boost Cardinal Health’s digital connectivity, consequently leading to higher patient satisfaction. This has the potential to bring more patients to the system, thereby boosting Cardinal Health’s top line going forward.
Rationale Behind the Buyout
ScalaMed pivots prescription management from provider to patient, thus enabling patients to send prescriptions given by their provider directly to any pharmacy for the first fill. The platform offers patients greater flexibility, easier access and price comparison, which aids in selecting the preferred pharmacy.
Along with saving clinician work hours by eliminating the administrative work of transferring prescriptions, it also aids in improving health outcomes with improved adherence and increased patient satisfaction. Following the buyout, ScalaMed’s technology will be offered via Cardinal Health’s nationwide pharmacy network, thereby creating more opportunities for digital connectivity to a wider patient pool.
Per management, with the continued evolvement of health care toward patient preferences, the ScalaMed buyout is expected to enable Cardinal Health to center its connected ecosystem around the patient from the beginning of their treatment journey. This will likely improve patient outcomes via unified communication and more informed insights, thus removing access and adherence barriers.
ScalaMed’s management feels that this acquisition will lead to the provision of a smart and patient-centric solution, thereby transforming the way prescriptions are filled and helping solve the enormous and costly challenge of medication non-adherence.
Industry Prospects
Per a report by P&S Intelligence, the global medication adherence market was estimated to be $2,310.0 million in 2019 and is anticipated to reach $11,226.3 million by 2030 at a CAGR of 15.5%. Factors like rising demand for advanced medication adherence systems, increasing prevalence of chronic diseases and rising geriatric population are expected to drive the market.
Given the growing market potential, the new buyout seems to have been timed well.
Recent Developments
This month, Cardinal Health acquired the Bendcare group purchasing organization entity and made a minority investment in the Bendcare management services organization.
Last month, Cardinal Health tied up with Zipline and commenced long-range drone deliveries in North Carolina. The latest partnership between the two companies aims to transform patients’ experience while improving care delivery.
The same month, Cardinal Health announced the addition of a new distribution center in the Columbus, OH area as part of a multi-year warehouse modernization and growth plan. The new distribution center will support the company's at-Home Solutions business.
Price Performance
Shares of the company have lost 7.2% in the past year compared with the industry’s 10.9% fall and the S&P 500’s 12.1% decline.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Currently, Cardinal Health carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Patterson Companies, Inc. (PDCO - Free Report) and Becton, Dickinson and Company (BDX - Free Report) , popularly known as BD.
AMN Healthcare, flaunting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 1.1%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 15.6%.
AMN Healthcare has gained 20% against the industry’s 33.3% fall in the past year.
Patterson Companies, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 9.6%. PDCO’s earnings surpassed estimates in all the trailing four quarters, the average beat being 16.5%.
Patterson Companies has lost 1.1% compared with the industry’s 10.9% fall over the past year.
BD, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 6.6%. BDX’s earnings surpassed estimates in all the trailing four quarters, the average beat being 12.9%.
BD has lost 1.9% compared with the industry’s 10.9% fall over the past year.
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Cardinal Health's (CAH) New Buyout to Boost Medication Adherence
Cardinal Health, Inc. (CAH - Free Report) recently announced that its digital health solutions company — Outcomes — has acquired ScalaMed. Following the buyout, the latter’s technology and assets will be transferred to Outcomes.
ScalaMed is a smart platform that transfers prescriptions directly to patients through a secure mobile app.
This latest acquisition is likely to boost Cardinal Health’s digital connectivity, consequently leading to higher patient satisfaction. This has the potential to bring more patients to the system, thereby boosting Cardinal Health’s top line going forward.
Rationale Behind the Buyout
ScalaMed pivots prescription management from provider to patient, thus enabling patients to send prescriptions given by their provider directly to any pharmacy for the first fill. The platform offers patients greater flexibility, easier access and price comparison, which aids in selecting the preferred pharmacy.
Along with saving clinician work hours by eliminating the administrative work of transferring prescriptions, it also aids in improving health outcomes with improved adherence and increased patient satisfaction. Following the buyout, ScalaMed’s technology will be offered via Cardinal Health’s nationwide pharmacy network, thereby creating more opportunities for digital connectivity to a wider patient pool.
Per management, with the continued evolvement of health care toward patient preferences, the ScalaMed buyout is expected to enable Cardinal Health to center its connected ecosystem around the patient from the beginning of their treatment journey. This will likely improve patient outcomes via unified communication and more informed insights, thus removing access and adherence barriers.
ScalaMed’s management feels that this acquisition will lead to the provision of a smart and patient-centric solution, thereby transforming the way prescriptions are filled and helping solve the enormous and costly challenge of medication non-adherence.
Industry Prospects
Per a report by P&S Intelligence, the global medication adherence market was estimated to be $2,310.0 million in 2019 and is anticipated to reach $11,226.3 million by 2030 at a CAGR of 15.5%. Factors like rising demand for advanced medication adherence systems, increasing prevalence of chronic diseases and rising geriatric population are expected to drive the market.
Given the growing market potential, the new buyout seems to have been timed well.
Recent Developments
This month, Cardinal Health acquired the Bendcare group purchasing organization entity and made a minority investment in the Bendcare management services organization.
Last month, Cardinal Health tied up with Zipline and commenced long-range drone deliveries in North Carolina. The latest partnership between the two companies aims to transform patients’ experience while improving care delivery.
The same month, Cardinal Health announced the addition of a new distribution center in the Columbus, OH area as part of a multi-year warehouse modernization and growth plan. The new distribution center will support the company's at-Home Solutions business.
Price Performance
Shares of the company have lost 7.2% in the past year compared with the industry’s 10.9% fall and the S&P 500’s 12.1% decline.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Currently, Cardinal Health carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Patterson Companies, Inc. (PDCO - Free Report) and Becton, Dickinson and Company (BDX - Free Report) , popularly known as BD.
AMN Healthcare, flaunting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 1.1%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 15.6%.
You can see the complete list of today’s Zacks #1 Rank stocks here.
AMN Healthcare has gained 20% against the industry’s 33.3% fall in the past year.
Patterson Companies, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 9.6%. PDCO’s earnings surpassed estimates in all the trailing four quarters, the average beat being 16.5%.
Patterson Companies has lost 1.1% compared with the industry’s 10.9% fall over the past year.
BD, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 6.6%. BDX’s earnings surpassed estimates in all the trailing four quarters, the average beat being 12.9%.
BD has lost 1.9% compared with the industry’s 10.9% fall over the past year.