Cencora raises annual profit forecast on strong demand for specialty medicines
July 31 (Reuters) -Cencora COR.N raised its annual profit forecast againon Wednesday, driven by strong demand for high-priced specialty medicines that treat complex diseases such as cancer.
The drug distributor also beat Wall Street estimates for third-quarter profit and revenue helped by strength in its U.S. healthcare business.
"We see the company's fourth guidance increase of FY24 as a clear sign of sustained momentum," Leerink Partners analyst Michael Cherny wrote in a note.
The company has been benefiting from sales of specialty drugs and cheaper versions of complex biotech drugs called biosimilars at a time when prices of generic medicines keep falling due to intense competition.
Generic drugs are exact copies that can be easily produced and sold once the original medicine loses patent protection, typically leading to quick price declines by 90% or more.
Biosimilars for biologic drugs, including AbbVie's ABBV.N arthritis drug Humira and Regeneron Pharmaceuticals' REGN.O eye treatment Eylea, offer a compelling opportunity for drug distributors, according to analysts.
Cencora now expects 2024 adjusted earnings in the range of $13.55 to $13.65 per share, compared to a prior range of $13.35-$13.55 per share. Analysts were expecting $13.47 per share, according to LSEG data.
Sales at Cencora's U.S. healthcare business, its largest unit by revenue, rose nearly 12% year-over-year to $67.2 billion driven by increased sales of newer weight-loss treatments known as GLP-1 agonists, including Novo Nordisk's NOVOb.CO Wegovy and Eli Lilly's LLY.N Zepbound.
Total sales came in at $74.24 billion, topping estimates of $73.48 billion.
On an adjusted basis, Cencora reported a profit of $3.34 per share in the quarter ended June 30, beating estimates of $3.22 per share.
Reporting by Mariam Sunny in Bengaluru; Editing by Shailesh Kuber
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