Cardinal Health, Inc. (NYSE:CAH) Q1 2024 Earnings Call Transcript

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And so GLP-1s, today, you don’t hear us talk about from revenue, it’s not a meaningful contributor to our earnings. And so we’re not going to talk about it from an earnings perspective. Contracting back to your original question, we’ll continue to evolve underneath that dynamic. But ultimately, we are well-protected customer by customer in certain corridors to ensure that we don’t flip upside down on a particular customer. And so that needs to evolve over time as those concentrations evolve over time. But our model has proven very, very resilient over the years and decades because this is the latest mix challenge that there is or mix change, I should say. But it’s not the first time that there’s been a mix change in our industry. And so our model has proven to be resilient in that regard.

So it’s unique and different products, but it’s not unique in terms of impacts and influences that a particular product category has on the pharma distribution industry.

Operator: The next question comes from Elizabeth Anderson of Evercore. Please go ahead.

Elizabeth Anderson: Hi, guys. Thanks for the questions or the comments about the pacing of the year. One thing that was just kind of – I heard what you said about calling out the inflation and how that doesn’t quite flow through the same way as it did last year. Can you speak to how you’re thinking about the first half of the year versus the second half of the year? Because I would say you had a…

Operator: Sorry, if I think we lost the previous caller, and we’ll move on to the next question from Daniel Grosslight from Citi. Please go ahead.

Daniel Grosslight: Hi. Thanks for taking the question. Maybe we’ll go back to the COVID vaccine for a second here. You mentioned that you’re seeing talking of vaccine ahead of the season, the winter season. Are you also taking more share in vaccine distribution and perhaps your overall market share would suggest. And then as we think about therapeutics moving into the commercial channel in a couple of months here, how is that factored into your guidance? And then lastly, you’ve been operating well above your longer-term pharma EBIT guidance of 4% to 6% for a few quarters here. I’m curious if there’s been any change to how you’re thinking longer term about the business and some of the secular tailwinds that might be driving growth higher than your longer-term 4% to 6% guidance.

Jason Hollar: You’re getting all the value out of your one question. So let me see if I can touch on each one. I think there’s some connectivity between these. So overall, for vaccines, I think the best way to think about vaccine distribution is more about it from the customer standpoint. So I think what you’ll see is that COVID-19 vaccines like other vaccines typically will follow the distribution network. So the real question is, are our customers getting more than their fair share, and I don’t necessarily want to talk about them from that perspective other than to say we are very happy with the customers we have. We’ve often used a phrase for other situations winning with the winners, and we feel very well aligned with great customers.

And so – but I think that’s how you should think about it. And that it most likely the vast majority of the volume will follow the distribution network. I think your second element of that question was on the COVID therapeutics. How I think about that is a little bit differently than vaccines in terms of just the rollout, where the vaccines were a bit of an obsolete old product, new product type of situation where all that government stockpile. When we were asked about vaccines nearly a year ago, when it was first communicated to be commercialized, that was part of our response as well. We didn’t know the FDA approval date. We also didn’t know what was going to happen with the in-stock inventory, which seems to not have been a relevant usage at this stage given the variance evolution.

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