By Siddhi Mahatole (Reuters) -Drug distributor Cardinal Health raised its annual adjusted profit forecast on Thursday after beating estimates for first-quarter profit on strong demand for costly specialty medicines and branded drugs at its pharmaceuticals unit. Shares of the Dublin, Ohio-based company rose nearly 13% in afternoon trading. Drug distributors have been benefiting from sales […]
Health
Cardinal Health lifts annual adjusted profit forecast on specialty drug demand
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By Siddhi Mahatole
(Reuters) -Drug distributor Cardinal Health raised its annual adjusted profit forecast on Thursday after beating estimates for first-quarter profit on strong demand for costly specialty medicines and branded drugs at its pharmaceuticals unit.
Shares of the Dublin, Ohio-based company rose nearly 13% in afternoon trading.
Drug distributors have been benefiting from sales of specialty medicines, which are used to treat complex conditions like rheumatoid arthritis and cancer, due to their high profit margins, while also benefiting from biosimilars at a time when generic drug prices continue to fall amid intense competition.
Cardinal now expects adjusted profit per share in a range of $9.65 to $9.85 for fiscal 2026, up from its prior range of $9.30 to $9.50.
The company attributed the 35-cent increase to its strong first-quarter performance and anticipates contributions from its pending $1.9 billion acquisition of Solaris Health, which is expected to close in early November.
CEO Jason Hollar told Reuters the company saw distribution growth in the mid teens in its specialty pharmaceutical business. It has also seen demand in its smaller but higher-margin biopharma solutions business, which supports drug development and commercialization.
Cardinal Health said in August it would buy healthcare management firm Solaris Health for $1.9 billion in cash.
“We expect M&A to contribute about 8 percentage points to pharma profit growth in fiscal 2026,” CFO Aaron Alt said, adding that the first half is likely to outperform the second, driven by new customer wins.
The Pharmaceutical and Specialty Solutions segment generated $59.2 billion in revenue for the quarter ended September 30, up 23% year-over-year.
Cardinal reported quarterly adjusted profit per share of $2.55 per share, beating analysts’ estimate of $2.18, according to LSEG data.
Its quarterly revenue rose to $64 billion, topping expectations of $59.20 billion.
(Reporting by Siddhi Mahatole in Bengaluru; Editing by Pooja Desai)