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Express Scripts & Petco Tie Up, Ease Access to Pet Medicines

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Express Scripts Holding Company recently announced an alliance with Petco with a view to enable pet parents to order and receive pet medicines at home. Pet parents can now access pet prescriptions and OTC (over the counter) medications online, powered by Express Scripts.

Notably, the Inside Rx Pets discount card of Express Scripts is likely to make pet medications affordable as well. Clearly, the alliance fortifies Express Scripts’ foothold in the pet medication industry.

For investors’ notice, Petco is a leading pet specialty retailer with more than 50 years of service to pet parents.

How Does Express Scripts Stand to Gain?

Prior to the collaboration, Missouri-based Express Scripts introduced its Inside Rx Pets discount card. The card can offer up to 75% discount for generics and 15% for brand name pet medications. Per management, pet parents spend more than $8 billion annually on prescription and OTC medications on pets.

Post the completion of the Petco deal, Express Scripts’ home delivery pharmacy and specialty pharmacy claims are likely to get a boost, which saw a downside in the recently reported third quarter of 2018. This might also  broaden Express Scripts’ customer base.

Market Prospects

Going by an article published in Technology Gazette, the global pet medication market is expected to see a CAGR of 15% by 2025.

It is encouraging to note that the U.S. pet industry is a lucrative space, courtesy of increasing availability of medicines through private veterinary practices.

Thus, Express Scripts’ latest move has been a strategic and well-timed one.

Price Performance

Over the past year, shares of Express Scripts have rallied 55.7% compared with the industry’s 33.8% rise. The current level is also higher than the S&P 500 index’s increase of 3.3%.

The stock has a Zacks Rank #2 (Buy).

Other Key Picks

Other top-ranked stocks in the broader medical space are Stryker Corporation (SYK - Free Report) , Surmodics, Inc. (SRDX - Free Report) and Veeva Systems (VEEV - Free Report) .

Stryker has a long-term expected earnings growth rate of 10% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Surmodics’ long-term earnings growth rate is projected at 10%. The stock carries a Zacks Rank #2.

Veeva Systems’ long-term earnings growth rate is estimated at 19.3%. The stock carries a Zacks Rank #2.

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