Amazon Buys PillPack for $1 Billion

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Pillpack

Amazon.com Inc (NASDAQ: AMZN)

 

Amazon is acquiring PillPack, an online pharmacy licensed to sell prescription drugs in all U.S. states, excluding Hawaii.

The online retail giant will pay $1 billion in cash to acquire the 5-year-old startup, CNBC reports. Amazon beat Walmart, which was also was seeking to acquire the Manchester, New Hampshire-based online pharmacy.

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PillPack runs a platform known as PharmacyOS, which manages patient data and figures out how to even out prescription drugs in safe doses for customers.

Both companies expect to close the deal during the second half of this year. However, the transaction is subject to some regulatory approvals.

PillPack has managed to raise more than $123 million with investors since it was founded in 2013. Notable investors with a stake in the company include Menlo Ventures, Accel, Charles River Ventures, and Accomplice.

Amazon’s acquisition of PillPack was so disruptive to the stock markets on Thursday that it sent shares of several companies into a nose-drive.

The companies affected by the announcement included pharmacy-benefit managers, pharmacy chains, health insurers, and drug distributors.

Walgreens stock posted a loss of 9% in the afternoon session, after news of PillPack acquisition came in.

Earlier, the company had announced a $10 billion share repurchase program, along with better-than-expected earnings for fiscal third quarter ended May 31.

Rite Aid Corp. shares tanked 13%, CVS Health Corp. shares plunged 9.2%, Express Scripts Holding Co. shares sank 2.3%, McKesson Corp. shares lost 5.8%, Cardinal Health shares were down 4%, while AmerisourceBergen Corp. shares took a dip of 4%.

PillPack Comments

Jeff Wilke, the Chief Executive Officer of Worldwide Consumer at Amazon had this to say following the announcement; “PillPack’s visionary team has a combination of deep pharmacy experience and a focus on technology. PillPack is meaningfully improving its customers’ lives, and we want to help them continue making it easy for people to save time, simplify their lives, and feel healthier. We’re excited to see what we can do together on behalf of customers over time.”

TJ Parker, PillPack co-founder and Chief Executive Officer also issued a statement saying; “PillPack makes it simple for any customer to take the right medication at the right time, and feel healthier. Together with Amazon, we are eager to continue working with partners across the healthcare industry to help people throughout the U.S. who can benefit from a better pharmacy experience.”

Amazon Company Profile

Amazon provides online retail shopping services in North America and internationally. The company operates through the Amazon Web Services, North America, and International segments.

The North America segment engages in subscriptions and retail sales of consumer products through North America-targeted websites, like www.amazon.ca and www.amazon.com.

The International segment provides subscriptions and retail sales of consumer products through internationally-targeted websites.

The Amazon Web Services division engages in international sales of database, compute, storage, and AWS service offerings for government agencies, academic institutions, start-ups, and enterprises.

The company was founded by Jeff Bezos in July 1994. Its headquarters are based in Seattle, Washington. –Reurters

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