Brian Tanquilut: Got it. That makes sense. And then, Mike, as I think about maybe the puts and takes on some of the moving parts with the drivers of revenue, exiting some therapies here and there. How are you thinking about the pipeline of drugs as it drives to offset some of the therapy exits that you’re contemplating?
Mike Shapiro: Yes. I think that’s a key variable that we’re constantly watching. Obviously, we’ve got a business development team and our procurement team has dialed in. They’ve got an ear to the rail with all the manufacturers. We know everything in the pipeline from preclinical through filing the BLAs. And so that’s something that we absolutely take into account. I think you bring up a good point because I think part of what we also are discerning is looking under the lens of how do we leverage our clinical and pharmacy assets across the country. Even as things migrate from, let’s say, an intravenous to a self-administered or a subcutaneous administration or with biosimilars coming out, it’s really vital that you look at the labels because a lot of things that are going subcutaneous might still require health care professional oversight or injectables that require HCP oversight.
And so, those are all key variables. There’s a couple of things on the horizon with certain infliximab that are going subcu. STELARA, obviously, one of the things that Janssen has been very open as they expect biosimilar participation before the end of 2024. These are all variables that we’re keeping in front of us. In terms of the pipeline of new-to-world therapies, that’s an area where, frankly, we’ve exercised and demonstrated our ability to excel. One thing we talked about earlier this year is just a phenomenal collaboration with the folks at Crystal to commercialize VYJUVEK, which is a topical gene therapy, not probably the first therapy that would roll off somebody’s tongue thinking about things that we’re commercializing. But when you look at the veil of it requires pharmacy infrastructure, health care professional administration, it’s something that well again, it’s not going to change the growth profile of the industry of our platform.
It’s definitely complementary and efficient for us to launch given the technology and the clinical infrastructure that we’ve established. And so we’ll continue to look at both some of those orphan therapies where we can collaborate and be a trusted partner choice as well as what are some of those structural therapy dynamics that have been evolving over the last couple of years and will continue to evolve.
Brian Tanquilut: That makes sense. Maybe if I can squeeze one more in. So you guys touched on some of the market share gains that you’ve had from the exits of some of your competitors from the acute business. How are you thinking about remaining market share up for grabs? Or are there more of these situations that are likely coming up where competitors are exiting certain therapy buckets?
John Rademacher: Yes, Brian. Look, from our perspective, I think everyone is going to continue to evaluate their position. We’ve talked about the choreograph that has to happen in some of these therapies and the work that has to happen at the local level. Can’t really hazard a guess as to whether or not others are going to make different strategic decisions. We have built a dynamic and resilient network that would allow us to take on additional patient volume, if that were to come our way. And we’re out every day, hustle in to try to capture market demand as it exists regardless of actions of our other competitors. So that’s the way we’ve always approached it. And I think we’re well positioned given the resilience and the capacity we have within our existing network.
Brian Tanquilut: Awesome. Thank you, guys.
Operator: Our next question comes from Jamie Perse with Goldman Sachs. Your line is open.
Jamie Perse: Good morning, guys. I wanted to start with a clarification on the 2023 EBITDA base. I know you guys gave the 100 basis points of ASP pressure and 200 basis points from Makena and Radicava. I think you said that’s been actually a 100 basis point headwind so far this year, Makena and Radicava specifically. So I just wanted to confirm that, and that’s sort of what we should be expecting to be a headwind next year? And then a similar question on the ASP, just whether that has played out as you expected this year?
Mike Shapiro: Yes. So the 100 basis points I referred to, Jamie, was in the quarter. So in Q3, we started to see last year some of the Radicava start to ramp down. Again, I don’t think that, again, not in a position to unpack ’24 really, but I don’t think we’re going to be talking about Makena and Radicava early 2024. Yes, there was some early revenue in ’23. It’s not going to be a headline on a year-over-year basis. We have seen some further ASP erosion consistent with how we thought coming into the year, specifically on some antibiotics and on some of the infliximab for chronic inflammatory. So that has played out relatively consistent with how we projected it going into the year. The other thing is, obviously, we had, I think, somewhere in the neighborhood of 30 to 40 bps of — and again, all this is not against a backdrop of a static platform, but we did exit a respiratory therapy business in late Q4 of last year, which I think represent about 30 to 40 bps of headwind for this year, that topic goes away going into ’24 as well.
Jamie Perse: Okay. And then secondly, just on the third quarter. Were the procurement benefits in line with your expectations, it was a little higher than I expected in the quarter. So just want to get a read on that. And then relatedly, if the underlying business performance was in line with your expectations?
Mike Shapiro : Yes. I’d say overall, the quarter developed consistent with how we were expecting going into the third quarter. Look, on the procurement benefits, they were a nudge better than we expected. And again, this is not an exact science, it’s a little bit hand grenade range. That’s part of the reason, frankly, why we brought up the bottom end of our range to $4.20 to $4.25 with drifting towards the higher end of the $4.15 to $4.25, we articulated in late July was if, in fact, some of those procurement benefits manifested at a slightly higher level, which, candidly, they did. And so — look, how — and that’s incorporated into our Q4 implied guide. At the end of the day, it’s shaping up to, call it, $30 million to $35 million of ’23 procurement benefits, which are real and hats off to our procurement team. They muscle their way to realize this. But that is something that, obviously, we want to highlight to folks which won’t continue into next year.
Jamie Perse: Okay. Perfect. And then, John, two for you. First, sometimes you talk us through the key drivers of growth, specific therapy classes. Can you spend a minute just giving us a flavor for what’s driving growth at this point and where those therapy categories are in their life cycle?
John Rademacher : Yes. So we continue to work closely with our reach and frequency of our commercial team to make certain that we are well positioned to capture demand coming out of the acute setting. And those antibiotics and nutrition support product, they’re kind of in the later stages of those life cycles, right, in the sense of their utility remains high, and we continue to see that. But as we’ve disclosed before, that’s a lower growth profile in the low single digits on the acute. On the chronic side, we continue to see strength in immunotherapy. We continue to see strength in the chronic inflammatory. We continue to focus around neurologists and gastros to make certain they are aware of our full spectrum of capabilities within that.
