AmerisourceBergen has bought US consulting group Premier Source putting into practice the growth-through-acquisition strategy it outlined last month.
The deal will add Premier’s range of consulting services, which are designed to help drug firms, medical device makers and diagnostics developers with reimbursement issues, to AmerisourceBergen’s Consulting Services (ABCS) division.
In a press statement ABCS business development head Peyton Howell said: “Premier Source has been focused on the diagnostics market and their business complements the work we do in both our consulting businesses under the Lash Group and Xcenda.”
AmerisourceBergen set out on the acquisition trail in early August when it announced it was looking to spend some of the $1.2bn (€1.4bn) cash reserve it had built up as a result of ‘strong’ second quarter sales.
The Pennsylvania-headquartered services firm said it was interested in buying specialty drug industry suppliers and, more pertinently given Premier’s line of business, consulting firms in the $200m to $300m price bracket.
CEO Steven Collis told investors that: “Our criteria for acquisitions are as follows: they should increase our value offering to existing customers, both up and down the channel; they should be within our established core competency; and they should increase shareholder value.”
AmerisourceBegen’s efforts to broaden its business also make strategic sense given that the firm expects revenues from several of its top selling products – including oxaliplatin, gemcitabine and docetaxel - to decline somewhat.
Foremost among these is oxaliplatin. AmerisourceBergen has sold the drug as a generic since 2010 after it bought a significant quantity while French drugmaker Sanofi, which holds rights to the branded version, struggled to fight off generic competition from other manufacturers.
‘Strong’ sales of oxaliplatin, as well as gemcitabine and docetaxel, helped boost AmerisourceBergen’s operating income 10 per cent in the quarter.
However, the firm’s oxaliplatin supplies have now run out which, coupled with Sanofi’s success in the courts , means AmerisourceBergen will be unable to sell any more oxaliplatin until summer 2012.
Collis also expects docetaxel and gemcitabine sales to “moderate” as more suppliers enter the market and reimbursement declines.