McKesson Signs Agreement to Acquire Controlling Interest in Florida Cancer Specialists & Research Institute’s Core Ventures

Rhea-AI Summary

McKesson (NYSE: MCK) has announced a definitive agreement to acquire a controlling interest in Community Oncology Revitalization Enterprise Ventures, (Core Ventures) for approximately $2.49 billion in cash. This acquisition will give McKesson about 70% ownership of Core Ventures, a business and administrative services organization established by Florida Cancer Specialists & Research Institute (FCS).

Following the transaction, FCS will join The US Oncology Network, part of McKesson's Oncology platform. FCS, with over 250 physicians and 280 advanced practice providers across nearly 100 locations in Florida, will remain independently owned. This strategic move aims to enhance McKesson's integrated oncology platform and advance community-based oncology care.

Positive

• Acquisition of controlling interest in Core Ventures for $2.49 billion, expanding McKesson's oncology platform
• FCS joining The US Oncology Network, potentially enhancing patient care and treatment options
• Expansion of McKesson's presence in community-based oncology care
• Access to FCS's expertise in clinical trials, diagnostic imaging, and advanced cancer treatments
• Potential for cost reduction in overall cancer care

Negative

• Significant cash outlay of $2.49 billion for the acquisition
• Potential integration challenges between McKesson and Core Ventures
• Regulatory clearances still required, which could delay or impact the deal

Insights

Financial Analyst

McKesson's $2.49 billion acquisition of a 70% stake in Core Ventures represents a significant expansion in the oncology sector. This move is strategically sound, as it enhances McKesson's integrated oncology platform and expands its presence in community-based cancer care.

The deal's financial implications are substantial. It will likely boost McKesson's revenue in the US Pharmaceutical segment, given Florida Cancer Specialists' extensive network of over 250 physicians across nearly 100 locations. However, investors should monitor the impact on McKesson's cash reserves and any potential debt incurred to finance the acquisition.

Long-term, this acquisition positions McKesson to capitalize on the growing oncology market, potentially leading to increased shareholder value. The focus on reducing overall care costs while improving patient outcomes aligns with broader healthcare trends, which could drive sustained growth.

Oncology Expert

This acquisition marks a significant shift in community oncology. By integrating Florida Cancer Specialists (FCS) into The US Oncology Network, McKesson is creating a powerhouse in community-based cancer care. The deal brings together FCS's extensive clinical trial capabilities through Sarah Cannon Research Institute and McKesson's oncology platform.

For patients, this could mean improved access to cutting-edge treatments and clinical trials in community settings. The combined entity's focus on affordable care and better outcomes aligns with the ongoing shift towards value-based care in oncology.

However, the consolidation raises questions about the future of independent oncology practices. While FCS physicians retain minority ownership, this trend could potentially reduce competition and impact patient choice in some markets.

Healthcare Policy Analyst

This acquisition reflects the ongoing consolidation trend in healthcare, particularly in specialty care. It's a strategic move that could enhance efficiency and potentially reduce costs in oncology care delivery. However, it also raises important policy considerations.

Regulators will likely scrutinize this deal closely, focusing on its impact on market competition and patient access. The transaction's success hinges on obtaining necessary regulatory clearances, which isn't guaranteed given the size and market impact of the deal.

From a policy perspective, this consolidation aligns with the push for integrated care models that can better manage complex conditions like cancer. However, policymakers may need to ensure that such consolidation doesn't lead to reduced competition or higher prices for patients and payers in the long run.

Acquisition enhances McKesson’s integrated oncology platform; Florida Cancer Specialists & Research Institute to join The US Oncology Network

IRVING, Texas--(BUSINESS WIRE)-- McKesson Corporation (NYSE: MCK) announced today that it signed a definitive agreement to acquire a controlling interest in Community Oncology Revitalization Enterprise Ventures, LLC (Core Ventures). Core Ventures, a business and administrative services organization, was established by Florida Cancer Specialists & Research Institute, LLC (FCS), a leading physician-owned community oncology practice. FCS physicians will continue to retain a minority interest in Core Ventures.

McKesson will purchase its controlling interest for approximately $2.49 billion in cash, which will represent approximately 70% ownership. Following completion of the transaction, Core Ventures will be part of the Oncology platform, and financial results will be reported within McKesson’s US Pharmaceutical segment. The transaction is subject to customary closing conditions, including necessary regulatory clearances. Following the close of the transaction, FCS, a practice with more than 250 physicians and 280 advanced practice providers, across nearly 100 locations in Florida, will remain independently owned and FCS will join McKesson’s The US Oncology Network (The Network), a leading oncology organization, dedicated to advancing local and affordable cancer care and better patient outcomes.

“This milestone marks an important step forward in our efforts to advance community-based oncology care,” said Brian Tyler, chief executive officer, McKesson. “By growing our Oncology platform, we will bring advanced treatments and improved care experiences to patients, while also reducing the overall cost of care. FCS and Core Ventures’ expertise and patient-first approach align with our commitment to accelerating clinical development, improving patient outcomes, and expanding access to quality cancer care in the community. We are also pleased to welcome Florida Cancer Specialists & Research Institute to The US Oncology Network, reinforcing our dedication to empowering community-based providers to independently thrive in today’s rapidly evolving healthcare landscape.”

FCS has provided exceptional care to cancer patients for over 40 years. During that time, services have grown to include clinical trials, diagnostic imaging, medical oncology and chemotherapy infusion, integrative therapy, molecular and pathology lab services, radiation oncology, next-generation sequencing, medically integrated dispensing, and data services. FCS currently conducts clinical trials through Sarah Cannon Research Institute (SCRI), one of the world’s leading oncology research organizations conducting community-based clinical trials. By joining The Network, FCS will have access to McKesson’s differentiated Oncology platform, including best-in-class oncology care products and services.

“Above all else, our patients are the true beneficiaries of this transaction, as we seek to drive meaningful outcomes and deliver sustained value with every interaction. Through the power of our combined operational expertise, we can bolster community oncology's role in increasing access to high-quality, affordable care,” said Lucio N. Gordan, MD, president and managing physician, FCS.

“This is a historic moment for FCS and reflects the evolution of our practice and the forward-thinking of physician leadership, our board, and the entire organization at large,” said Nathan H. Walcker, chief executive officer of FCS. “The US Oncology Network and FCS share a mission and we both aim to strengthen patient-centered cancer care in the community to improve outcomes. We are thrilled to partner with McKesson and join The Network, which furthers the joint commitment to bringing the best medicine and innovation for patients into communities across Florida.”

Cautionary Statements

Except for historical information, statements in this press release regarding McKesson’s proposed acquisition and related arrangements constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, that involve risks and uncertainties that could cause actual results to differ materially from those in those statements. It is not possible to identify all such risks and uncertainties. The reader should not place undue reliance on forward-looking statements, which speak only as of the date they are first made. Except to the extent required by law, the company undertakes no obligation to publicly update forward-looking statements. We encourage investors to read the important risk factors described in the company’s most recent Form 10-K filed with the Securities and Exchange Commission. These risk factors include, but are not limited to: we may be unable to obtain necessary regulatory approvals; we may not achieve expected outcomes from the transaction; we might be adversely impacted by delays or other difficulties, including related to the transactions described in this press release; we from time to time record significant charges from impairment to goodwill, intangibles and other assets or investments; we might be adversely impacted by events outside of our control, such as widespread public health issues, natural disasters, political events, economic events and other catastrophic events.

About McKesson

McKesson Corporation is a diversified healthcare services leader dedicated to advancing health outcomes for patients everywhere. Our teams partner with biopharma companies, care providers, pharmacies, manufacturers, governments, and others to deliver insights, products, and services to help make quality care more accessible and affordable. Learn more about how McKesson is impacting virtually every aspect of healthcare at McKesson.com and read Our Stories.

About McKesson Oncology and Specialty Solutions

It’s an unprecedented time for patients living with cancer as life sciences companies race to create new, cutting-edge therapies. With cancer care becoming more targeted, providers, life sciences companies, and payers face a multitude of challenges and complexity in the development of new treatments and making them accessible to patients in need. At McKesson, our unmatched portfolio of oncology businesses and partners provide research, insights, technologies, and services that are helping to address these hurdles and improve cancer and specialty care.

• McKesson is fueling discovery by helping patients participate in cutting-edge clinical trials closer to home through its joint venture with Sarah Cannon Research Institute.
• The US Oncology Network and McKesson Provider Solutions are advancing specialty care and high-quality cancer care in the communities where patients live by supporting the practices of thousands of independent, community-based providers.
• Ontada^®, a McKesson business dedicated to oncology, generates real-world data (RWD) and real-world evidence (RWE), and provides clinical education and provider technology to inform and improve cancer care.
• As one of the largest distributors of oncology and specialty medicines, we are ensuring medicines make their way to those who are counting on them.
• And through CoverMyMeds, Biologics by McKesson, and GPO services, our work continues to help patients access, afford, and adhere to their medicines.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240825655340/en/

Rachel Rodriguez

Investors

469.260.0556 rachel.rodriguez@mckesson.com

Claire Crye

Media

281.825.9927 claire.crye@mckesson.com

Source: McKesson Corporation

FAQ

What is the value of McKesson's acquisition of Core Ventures?

McKesson is acquiring a controlling interest in Core Ventures for approximately $2.49 billion in cash, representing about 70% ownership.

How will this acquisition affect Florida Cancer Specialists & Research Institute (FCS)?

FCS will remain independently owned but will join McKesson's The US Oncology Network, gaining access to McKesson's oncology platform and services.

What is the strategic importance of this acquisition for McKesson (MCK)?

The acquisition enhances McKesson's integrated oncology platform, aiming to advance community-based oncology care, improve patient outcomes, and reduce overall care costs.

When is the McKesson (MCK) acquisition of Core Ventures expected to close?

The transaction is subject to customary closing conditions, including necessary regulatory clearances. A specific closing date was not provided in the press release.