SAN FRANCISCO—Looking to take advantage of strong growth in the specialty drugs market, McKesson announced it has agreed to acquire Oncology Therapeutics Network (OTN) for approximately $575 million, including assumed debt. With annualized sales of about $3 billion, OTN is one of the country's largest distributors of drugs in this category, and McKesson expects to combine OTN with its own McKesson Specialty operations.
According to a recent report by Kalorama Information, the aggressive market for oncology drugs shows little signs of abating with a projected growth rate of 14% between 2006 and 2011, which would have it approaching $90 billion by 2011.
"OTN and McKesson Specialty each have strong, value-based relationships with physicians and manufacturers based on high-quality service and technologies that align clinical outcomes with financial incentives," says John Hammergren, McKesson CEO and chair. "The integration of these two businesses will enhance our position in one of the fastest-growing categories of drugs in the United States."
McKesson also announced its Board of Directors approved a new $1 billion share repurchase authorization, which comes just months after a $1 billion share repurchase plan announced in May.