(Bloomberg) — Cardinal Health Inc. shares fell the most in more than two months after the drug distributor lost a big contract with UnitedHealth Group Inc.’s pharmacy benefits subsidiary.Most Read from BloombergThe drug distribution contract with Optum Rx expires in June and won’t be renewed, Cardinal said Monday in a statement. Cardinal affirmed its fiscal 2024 adjusted earnings forecast of $7.20 to $7.35 a share.Cardinal fell as much as 5.2% in New York trading Monday, the biggest intraday loss since Feb. 1.The Optum contract, primarily bulk shipments to supply Optum’s mail-order pharmacy, accounted for 16% of Cardinal’s revenue for fiscal 2023, the company said. Those sales have a “meaningfully lower” profit margin for Cardinal.McKesson Corp., one of the other major drug wholesalers, won the contract, which would start in July, Evercore ISI analysts said in a note to clients. McKesson didn’t immediately respond to a request for comment. Shares of McKesson rose as much as 1.2% in New York before erasing the gain.The contract will have an impact of about 45 to 50 cents on Cardinal’s earnings in fiscal 2025, which starts in July 2024, the Evercore analysts said. Cardinal’s contract with Optum began in fiscal 2016, according to a Cardinal annual report.Cardinal declined to comment beyond the statement.(Updates with analyst comment starting in fifth paragraph)Most Read from Bloomberg Businessweek©2024 Bloomberg L.P.
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Cardinal Health Falls After Optum Rx Distribution Contract Ended
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