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$MCK 1Q16 PR: Segment Results: Distribution Solutions revenues were $46,810MM, up 10% on a reported basis and 13% on a constant currency basis. Technology Solutions revenues were $736MM, down 4% in 1Q16 primarily driven by an anticipated YoverY decline in hospital software business, partially offset by growth in other technology businesses.
$MCK said James Beer, EVP and CFO, will be leaving the company to pursue a new opportunity. Britt Vitalone, SVP and CFO, U.S. Pharmaceutical and McKesson Specialty Health, will be appointed EVP and CFO of McKesson, effective Jan. 1, 2018. Beer will assist in a transition period into early 2018.
Biologics, a $MCK Specialty Health oncology pharmacy services company, has been selected by $LLY to be in the limited distribution network for Verzenio (abemaciclib), $LLY's first oral oncolytic indicated for metastatic breast cancer. Verzenio obstructs growth of cancer cells by specifically blocking cyclin-dependent kinases, CDK4 and CDK6.
McKesson Ventures, a unit of $MCK, has appointed Carrie Hurwitz as Principal. In addition, the company named Irem Mertol its Director. Most recently, Williams served as VP of Strategy and Business Development at Omada Health. Mertol comes to McKesson from Burd Health, where she held various leadership positions.
Healthcare technology provider $MDRX has agreed to acquire the enterprise information solutions business of $MCK for $185MM in cash. The transaction is expected to close early in the fourth quarter of calendar year 2017. The company plans to fund the transaction through its existing secured credit facilities and cash balances.
$MCK said all board members were re-elected at the annual stockholders’ meeting. Also, all board vote recommendations were upheld, except the advisory vote on executive compensation. The Compensation Committee will review of the current executive compensation plan and consider implementing changes so as to align incentives and shareholder value.
During 4Q17, $MCK's Distribution Solution revenues rose 5% YoY to $48.2Bil. Revenues of North America pharmaceutical distribution and services revenues were $40.6Bil, up 5%. International pharmaceutical distribution and services revenues were $6.1Bil and Medical-Surgical distribution and services revenues were $1.6Bil.
$MCK reported an increase in 4Q17 profit, due to a pre-tax gain of $3.9Bil related to the previously announced creation of the Change Healthcare joint venture. Net income rose to $3.6Bil, or $16.95 per share, compared to $431MM, or $1.97 per share during 4Q16. Revenues rose 4% YoY to $46.7Bil during the quarter.
$MCK lifted FY17 EPS from continuing operations guidance to $20.35-22.50 from $9.80-10.30, while lowering adjusted EPS outlook to $12.45-12.75 from $12.60-12.90. $MCK will record its share of a one-time, non-cash reduction to the carrying value of its deferred revenue balance. This will lower earnings in FY18 by about $140-170MM.
In 4Q17, $MCK expects to record a pre-tax gain of about $2.9-3.5Bil, which includes $1.25Bil in cash receipts, and associated non-cash income tax expense of about $0.5-0.8Bil, both of which will be excluded from adjusted earnings. As a result of net gain, $MCK will add about $10.70-12.35 in EPS from continuing operations.
On Jan. 24, 2017 $MCK entered into an agreement to acquire CoverMyMeds for approx. $1.1Bil, or $0.9Bil net of incremental cash tax benefits. The transaction is subject to customary closing conditions, including regulatory review, and is expected to close in the first half of FY18.
During 3Q17, $MCK's Distribution Solutions reported 5% growth in its revenues to $49.4MM. North America pharmaceutical distribution and services revenues rose 5% to $41.7Bil and International pharmaceutical distribution and services revenues were $6.2Bil for the quarter, up 3%.