McKesson's quarterly revenue reaches $111 billion on specialty drugs

What happened

McKesson reported on Wednesday 4 November revenue of $111.0 billion for the quarter ended 30 September, 8 percent more than a year earlier, in its results release and quarterly report. ^{[1, 2]}

Net income attributable to the company was $1.22 billion, up from $1.11 billion, the release shows. The company also raised its full-year forecast for adjusted earnings, a measure that excludes items it treats as one-time. ^{[1, 3]}

Why it matters

Specialty medicines did most of the work. The Oncology and Multispecialty segment, which serves cancer and other specialist practices, brought in $15.0 billion, 24 percent more than a year earlier, the company reported. The largest segment, North American Pharmaceutical, grew 6 percent to $91.4 billion. ^[1]

The segments

In the 10-Q, McKesson said North American growth came from higher volumes from institutional healthcare providers and retail national account customers. It said market growth 'includes growing drug utilization, for example the GLP-1 class of medications', the weight-loss and diabetes drugs. Neither filing gives a GLP-1 revenue figure. ^[2]

Prescription Technology Solutions, which handles prior authorization and drug access services, reported revenue of $1.5 billion, up 10 percent. Medical-Surgical Solutions reported $3.1 billion, up 5 percent, but its operating profit was $164 million against $220 million a year earlier. ^{[1, 2]}

That segment carried $42 million of charges in the quarter for its planned separation, the 10-Q says. Funds managed by Apollo affiliates bought about 13 percent of it on Monday 1 June for about $1.25 billion. HME News reported that the business plans to operate as Wellverse from January 2027. ^{[2, 5]}

The deals

McKesson extended its drug distribution partnership with CVS Health through June 2032, the release said. On Monday 2 November it completed the purchase of Precision Medicine Group, a clinical research firm, for about $2.25 billion, and a controlling stake in Spectrum Vision Partners for about $525 million. ^{[1, 2]}

On Monday 5 October it agreed to invest about $1.4 billion for about 49 percent of Option Care Health, a home infusion provider, with CD&R holding 51 percent. Fierce Healthcare reported the whole deal valued at $5.8 billion. Chief financial officer Kenny Cheung said the raised forecast is 'underpinned by the strength in our business'. ^{[1, 2, 4]}

What settles it next

Precision Medicine and Spectrum Vision report inside Oncology and Multispecialty from the third quarter, the 10-Q says. The Option Care deal is expected to close in the first half of calendar 2027, subject to its shareholders and regulators. Management appears at the Jefferies conference on Tuesday 17 November and the Evercore conference on Tuesday 1 December. ^{[1, 2, 4]}

Who it reaches

McKesson (MCK) is direct: the results are its own filings. CVS Health (CVS) is adjacent through the extended distribution partnership, and Option Care Health (OPCH) through the pending investment. Apollo Global Management (APO) is adjacent: its affiliates' funds hold about 13 percent of the medical supplies business. ^{[1, 2]}