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Walgreens to invest over $5.5 billion in health services push

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Oct 14 (Reuters) – Walgreens Boots Alliance Inc mentioned on Thursday it will take majority stakes in two smaller well being care suppliers for about $5.5 billion, because the second largest U.S. pharmacy chain shifts focus past its drugstores.

Shares in Walgreens rose practically 7% to $50.44 in afternoon buying and selling after it reported fourth-quarter outcomes that beat estimates, helped by easing pandemic-related restrictions and COVID-19 vaccine administrations at its shops.

The corporate mentioned it will make a $5.2 billion funding in VillageMD, within the main care supplier to 63%. It’s going to additionally make investments $330 million in post-acute and residential care supplier CareCentrix to take a 55% stake.

Walgreens, which has greater than 9,000 drugstores throughout the nation, mentioned these investments will assist its new enterprise unit that may present pharmacy and first care companies in-store, at house, within the physician’s workplace and by way of cellular app.

Rosalind Brewer, who took over as CEO earlier this yr, mentioned the offers will assist Walgreens handle rising prices in high-risk sufferers. “These are the identical sufferers who regularly go to our shops and meet with our pharmacists,” Brewer added.

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Walgreens mentioned it expects adjusted earnings development, at fixed foreign money charges, to be flat for fiscal yr 2022.

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The corporate goals to open a minimum of 600 physician-led main care clinics in additional than 30 U.S. markets by 2025 and 1,000 clinics by 2027.

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Walgreens and VillageMD have 52 main care observe places with pharmacy and physician workplaces collectively, and can have greater than 80 such places by the top of this calendar yr, the corporate mentioned.

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Identical-store gross sales at its U.S. pharmacies rose 8.8% within the fourth quarter, which included a 485 foundation level enhance from COVID-19 vaccinations, the corporate mentioned.

Excluding gadgets, Walgreens earned $1.17 per share, in contrast with Refinitiv IBES estimates of $1.02 per share.

Reporting by Dania Nadeem and Leroy Leo in Bengaluru; Modifying by Vinay Dwivedi

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