For the first quarter of FY2015, the drug wholesale and logistics company reported sales of $33bn (€29bn) up 15% on the same period last 2014, though labour expense, delivery cost and depreciation of capital assets drove an operating loss of $88m.
While some of the revenue growth was due to deals such as the ten-year distribution deal with US pharmacy Wallgreens, management said the growth in sales of hepatitis C treatments was a large contributor.
“The hepatitis C drugs have been huge,” CEO Steve Collis said in a conference call yesterday. “They've probably added 3% to 4% and we don’t see - at least based on the last quarter - an adoption of Olysio and the new therapies backing off, it’s a very strong segment for us and our customers.”
Elysio is J&J subsidiary Janssen’s protease inhibitor drug to treat chronic hepatitis C virus infection approved by the US Food and Drug Administration (FDA) in November 2013.
Since then, three other drug products have been approved launched to treat the estimated 3.2million people affected with the virus in the US: Gilead’s nucleotide analog Sovaldi (sofosbuvir) and combination product Harvoni, and just last month, AbbVie’s triple ingredient treatment Viekira Pak.
“I met one of our customers recently and I said what can we do to better job,” Collis said. “They said we need more credit for our stores because they’re doing more [HCV products] for patients.You get a couple of hep C patients and it totally changes the dynamics. The market is robust.”
Gilead and AbbVie have both struck exclusive deals with payers CVS and Express Scripts, respectively. In 2012, AmeriSourceBergen bagged a supply deal with Express Scripts worth $18.5bn.
While Evercore ISI analyst Ross Muken described the firm’s results as “an impressive start to the year,” he warned the higher top-line contribution could be offset by more modest margin expansion assumptions coming from very low margin products among the hepatitis C products.
World Courier, the clinical trial logistics company acquired by AmeriSourceBergen in 2012, also saw revenue growth in the quarter though Collis told investors results had been “somewhat dampened by foreign currency exchange rates,” due to the strong US Dollar against the Euro.