Cencora Inc Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Lisa Gill - JPMorgan Chase & Co - Analyst : Thanks very much. Good morning, Bob. Congratulations. I talked to -- I listened to you talk a little bit about your strategy. You talked about the incredible foundation built on the strategy. the strength of the strategy of the company. Obviously, we're waking up today. We have a new president going into 2025, maybe just spend a couple of minutes talking about how you think about maybe the first year as CEO of the company, anything changing from your perspective now that we do have a new president and it looks like it will be a Congress that will most likely be Republican. So any changes there would be kind of my question is really just trying to understand how you're thinking about that? And then just secondly, I really just want to understand if we're seeing any changes from the volume changes in IRA. So you talked about strong results in the quarter around volumes. I'm just curious if you guys are seeing anything from that perspective.

Question: Michael Cherny - Leerink Partners - Analyst : Good morning. Congrats on the quarter. And Bob, echoing Lisa's comments, welcome to your new role. I know you obviously had a long time here, but congrats on the transition. Maybe if I could just dive in, I guess, two part question come together. First of all, I know you highlighted a number of the headwinds you have this year from a year-over-year basis as you think about the COVID comp. Is the loss of the customer contemplated specifically in guidance, whether they leave or not? Just trying to get to the baseline growth, which definitely seems stronger than the 5% to 6.5% on underlying basis. And along those lines, when thinking about specialty in particular, given your market leadership there, how do you think about the moving pieces across the market with regards to specialty inclusive of expectations for biosimilars, the impact we're seeing from changing benefit design with IRA. Curious how that all factors into your expectations across the US Healthcare segment relative to the specialty contribution? Thank you so much.

Question: Elizabeth Anderson - Evercore ISI - Analyst : Hi, guys. Thanks so much of the question. And Bob, congrats again on your first quarter as official -- officially. Maybe talk a little bit more -- RCA and sort of how you think about sort of your MSO capabilities more strongly. It's obviously an area that you've been investing in and maybe gets a little bit less like airtime than some of your other businesses. So maybe talk about that and what is their leverageable from other strategies you currently have in sort of capabilities, that would be a little bit helpful to hear more about that. Thank you.

Question: George Hill - Deutsche Bank - Analyst : Yes. Good morning, guys. Yes. Bob, welcome to the call. I'm going to get kind of way out like look a little further out, thinking about the acquisition today and you guys present in oncology. And Bob, as you kind of look forward to like impact of the IRE changes and the impact it could have on Part B drug costs and the profitability of practices that dispense a lot of drugs. I guess, is it too early to think about that because there's still the opportunity for legislative change? Or kind of how are you guys thinking about how you support those practices given the headwinds that could come from IRI. And again, I recognize I'm talking about something that two years away, maybe two years plus, but I kind of would love any preliminary thoughts on that.

Question: Eric Percher - Nephron Research LLC - Analyst : Thank you. And again, congrats to Bob. And I want to get a bit more specific on the specialty trend. I think we're hearing from payers that they're seeing a 3Q uptick and some of it is attributed to Part D. We also heard about commercial and seeing in specialty pharmacy. My question is, are you seeing an uptick in Q3 versus first half where you're serving specialty pharmacies, we tend to think of that as lower-margin specialty. And then you called out strength in specialty distribution, a higher-margin piece with providers and health systems. You've called that out in Q1 and Q2. Is there an acceleration you saw in 3Q? Or is that simply a continuation of the trend? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 06, 2024 / 1:30PM, COR.N - Q4 2024 Cencora Inc Earnings Call

Question: Stephanie Davis - Barclays - Analyst : Hi, guys. Thanks for taking my question. And Bob, official congratulations on taking the seat. I want to dig in a little bit more on the RSA transaction as it's a sizable move into other ologies outside of kind of your core focus -- so with that in mind, can you walk us through your specialty road map, any other verticals to watch or any opportunity on the checklist such as RCA's clinical trial strength that you're hoping to kind of shore up. Thank you.

Question: Kevin Caliendo - UBS - Analyst : Thanks for taking my question, Bob. Again, congrats. I want to take this a little bit further on the RCA stuff, because there's been a lot of oncology deals done recently. It feels like there isn't maybe as much opportunity there. You are already a leader in retina, as you said. Is this a stepping stone is ophthalmology going to be the next sort of roll up for you? Like how big is the opportunity here relative to what was the opportunity in oncology? And is there anything to maybe read through in terms of expectations around biosimilars in this space? Or any other like is there analysis done where you're looking at the growth of the market or the drug opportunity in that market evolving favorably for you is also a reason to get into this? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 06, 2024 / 1:30PM, COR.N - Q4 2024 Cencora Inc Earnings Call

Question: Eric Coldwell - Baird Capital Partners LP - Analyst : Thanks very much all. Well, I had a bunch of RCA questions, too, but I'll try to make those brief. Just quickly on ophthalmology specialty products or maybe the category overall. You're half of one of the leading manufacturers distribution volume. Is that a similar share across the entire market or are you half of the specialty market in ophthalmology?

Question: Erin Wright - Morgan Stanley - Analyst : Thanks. Could you speak a little bit to World Courier, just give an update on fundamental demand trends across that business and customer base? And then, yes, going back to sort of a little bit of an RCA question related is on how do you balance investments in terms of MSO type of investment versus a more direct relationship with like biopharma and life sciences partners partnerships? I know it's all kind of intertwined, but curious kind of how you think about that. And then just one quick one on just customer relationships. Just your guidance for the year. You addressed COVID and FCS, but you recently renewed your Express Scripts, Cigna contract. How would you characterize the relationship there? And any sort of changes in as well as your relationship with Walgreens? Thanks.

Question: Allen Lutz - BofA Securities - Analyst : Good morning and thanks for taking the questions. There was a really nice revenue acceleration quarter-over-quarter. And Bennett, you mentioned that it didn't seem like that was coming from specialty accelerating. So I guess the assumption that we have here is that that's mostly driven by GLP-1s. But is there anything outside of that piece that's worth calling out around that sequential acceleration a top line growth in the US health care business. Thanks.

Question: Charles Rhyee - TD Cowen - Analyst : Yes, thanks for taking the question. Kind of an RCA question, but maybe more broadly about the MSO strategy. Obviously, Senator Warren had written a letter kind of expressing some concerns about distributors owning group practices or owning theses MSOs. Can you talk about sort of your thoughts on that and your response? And then secondly, maybe what is the real benefit to owning the MSOs for you beyond just the distribution? Is it really just a services business that you want to provide four physicians. Maybe just expand on sort of that aspect of it. Thank you.