McKesson agrees to acquire two cancer care companies for $1.2bn

California-based Vantage Oncology offers radiation oncology, medical oncology and other cancer care services. It will add over 50 cancer centers across 13 US states to McKesson’s business.

Biologics is the largest oncology-focused specialty pharmacy in the US. It will strengthen McKesson’s oncology expertise across the continuum of care for patients.

Collectively, the acquisitions will extend McKesson’s specialty pharmaceutical distribution scale, oncology-focused pharmacy offerings, solutions for manufacturers and payers.

The transactions, which are subject to regulatory approvals, are anticipated to close in the first quarter of fiscal 2017.

The deals would be funded by a mix of cash and debt and are expected to add 11 cents to McKesson’s adjusted earnings in Q1 of 2017.

McKesson chairman and CEO John Hammergren said: "These investments will broaden McKesson’s practice management services and solutions that allow oncologists to focus on providing excellent patient care and provide additional support solutions that enhance care delivery for patients.

"We will also be able to offer additional value-added services to our manufacturer partners, expand our reach and pharmaceutical distribution scale, and provide care management and care coordination for payers as the industry moves towards value-based reimbursement models."

McKesson distributes pharmaceuticals at a retail sale level and offers health information technology and care management tools.

For the fiscal third quarter ended 31 December 2015, McKesson reported a 3% increase in revenues to $47.9bn, compared to $46.5bn a year ago.

Image: McKesson’s global headquarters building in downtown San Francisco. Photo: courtesy of Eric Hunt.