Today’s Technical View on Cardinal Health and McKesson: Emerging Markets to Drive Growth for Drugs Wholesalers
LONDON, February 14, 2013 /PRNewswire/ –
The weak macroeconomic environment has had an impact on the pharmaceutical industry,
however, not as much as other industries. The growth for pharmaceutical wholesalers in
2013 will be driven by emerging markets. Also, the launch of new drugs and potential
blockbusters will drive growth for pharmaceutical wholesalers such as Cardinal Health Inc.
(NYSE: CAH) and McKesson Corporation (NYSE: MCK). StockCall initiated free in-depth
technical analysis on Cardinal Health and McKesson which are currently available upon sign
Emerging Markets, New Drug Launches and Potential Blockbusters to Drive Growth
The International Federation of Pharmaceutical Wholesalers (IFPW), which represents a
strong, effective platform to establish strategic dialogue within the worldwide
pharmaceutical community, expects average annual growth of 13% to 16% for emerging markets
(Brazil, Russia, India, China, Turkey, Mexico and Korea). These markets are expected to
account for 40% of the global market growth through 2013.
The IFPW believes that despite the pressures, there is still room for new drug
launches and potential blockbusters, which should drive growth for drugs wholesalers. This
year will see the launch of a number of new drugs, including products targeted at niche
uses and narrow patient populations. Overall, IFPW expects pharmaceutical market to grow
between 3% and 6% through 2013.
The pharmaceutical industry saw a number of patent expirations for blockbuster drugs
in 2012 and is likely to see more in 2013. As a result, the share of generic drugs will
continue to increase. This will have an impact on the top-line of pharmaceutical
Cardinal Reports Strong Q2 Results
Last week, Cardinal Health reported strong financial results in its second quarter of
fiscal 2013. The Dublin, Ohio-based company reported second quarter revenue of $25.2
billion. The company’s revenue for the pharmaceutical segment fell 8% to $22.7 billion in
the second quarter. The decline was due to non-renewal of Express Scripts contract as well
as expected conversions from branded pharmaceuticals to lower-priced generics. The decline
was partially offset by revenues from new pharmaceutical distribution customers. Sign up
for the free technical analysis on Cardinal Health Inc. at
Cardinal Health’s non-GAAP earnings for the quarter rose 15% to $0.93 per share.
George Barrett, Chairman and CEO of Cardinal Health, noted that the company has now
completed a strong first half to its fiscal 2013 with a good second quarter performance.
Barrett said that while continued brand-to-generic conversions and the previously
announced movement of the Express Scripts contract drove a revenue decline in the
Pharmaceutical segment, excellent performance from generic programs and new customer wins
fueled profit gains.
McKesson’s Q3 Results
McKesson recently reported revenue of $31.2 billion for its third quarter ended
December 31, 2012, up 1% over the same period in the previous year. The company’s adjusted
earnings per share for the quarter was $1.41, up from $1.40 per share reported for the
same period in the previous year. Download the free report on McKesson Corporation by
John H. Hammergren, Chairman and CEO of McKesson, said that the company’s full-year
view of the operating performance in its Distribution Solutions segment is now better than
its original expectations.
For the fiscal year ended on March 31, 2013, McKesson expects adjusted earnings to be
between $7.10 per share and $7.30 per share.
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