Pharmacy chain operators, Walgreens Boots Alliance ( NASDAQ: WBA ) and CVS Health Corporation ( CVS ) dropped Wednesday after tech giant Amazon ( AMZN ) intensified the primary care rivalry with its agreement to acquire One Medical ( ONEM ).
The shares of One Medical ( ONEM ) surged ~69% after the pre-market announcement of the all-cash deal indicated ~$3.9B value for the San Francisco, California-based operator of a membership- based primary care platform.
Meanwhile, the shares of Walgreens ( WBA ) and CVS Health ( CVS ) both of which are increasing their footprint in primary care are on the decline. Walgreens ( WBA ) is in the red for the first time in four sessions while CVC Health ( CVS ) has extended losses for the second straight session.
After acquiring the primary care provider Village Practice Management in November, Walgreens ( WBA ) is on track to open 200 VillageMD clinics by end of 2022, the management said in June. VillageMD operated 315 clinics at the end of 3Q 2022, an increase of 97 from a year ago.
In December, CVS Health ( CVS ) announced its foray into primary care with plans to add traditional drugstore services as well as employees such as dietitians to the company’s drugstore and “HealthHUB” locations.
“…..we are continuing to look for a broader range of primary care capabilities. It’s an interesting market,” Chief Executive Karen Lynch noted during the recent earnings call. “We are trying to make sure that we are prudent, both strategically and financially, but it is part of our strategy,” she added, highlighting the importance of the market.
CVS Health ( CVS ) had approached 1Life Healthcare ( ONEM ) for a buyout deal, but the talks with the company ended amid interests from other bidders, Bloomberg reported in June.
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Walgreens, CVS Health tick lower after Amazon - One Medical deal