Rite Aid stock falls nearly 11 percent on news of Amazon purchase

Share

But the online retail giant's decision to buy online pharmacy PillPack rapidly accelerates the threat posed to entrenched retailers, suppliers and middlemen.

PillPack pre-sorts pills into date- and time-stamped packets for patients who take multiple drugs - common for older people dealing with several chronic conditions. Its pharmacy is based in Manchester, N.H., and its business operations are located in Somerville, Mass.

Jeff Wilke, CEO of Amazon's World Wide Consumer unit, added: "PillPack's visionary team has a combination of deep pharmacy experience and a focus on technology".

The companies expect to close the deal later this year.

PillPack has mail-order pharmacy licenses in all 50 states, which could allow Amazon to expand quickly.

Terms were not disclosed on the deal for PillPack, an online pharmacy which operates in all 50 U.S. states and offers pre-sorted dose packaging and home delivery. In April, CNBC reported Walmart Inc. was in talks to buy the company for "under $1 billion", citing unnamed sources. Terms of the deal were not disclosed, but Amazon referred to the deal as a "definitive merger agreement".

More news: MAN: HOMECOMING's Sequel Title Leaked... By TOM HOLLAND Himself

Shares of drug wholesalers McKesson Corp, Cardinal Health and AmerisourceBergen also fell sharply. Shares of Walgreens, Rite Aid, and CVS Health were down on Thursday morning.

This is just the most recent example of Amazon's ability to disrupt an industry with a single action.

PillPack, a privately held startup, has attracted substantial interest because the company boasts it can make it easier and faster for consumers to get a prescription filled than at corner drugstores. PillPack is authorized to ship drugs in 49 states, according to Reuters.

"When Amazon sneezes, everybody else catches a cold", said Joseph Feldman, an analyst with Telsey Advisory.

Walgreens stock was down 9.46% in pre-market trading. It counts Accel Partners, Atlas Venture, CRV, Founder Collective, Menlo Ventures, Sherpa Ventures, Techstars among its investors. It had raised $123 million in financing, most recently $5 million in debt from TriplePoint Venture Growth in August 2017, according to data from industry research firm PitchBook. Last week, the companies said author and Harvard professor Dr. Atul Gawande would lead the venture.

Share