Caremark International Inc. Sells Clozaril Patient Management Business to Health Management, Inc.

Strategic Insights -

Caremark International Inc. and Health Management, Inc. have signed a definitive agreement under which Caremark will sell the assets of its Clozaril patient management business to HMI for approximately $34 million in cash and notes. This sale is expected to be completed within 45 days, subject to government review under the Hart-Scott-Rodino Act. The Clozaril patient management business involves managing the care of more than 6,000 schizophrenia patients nationwide through distribution of Clozaril and coordination of related testing services to monitor patients for potentially serious side effects.

Key Takeaways:

  • Caremark International Inc. is selling its Clozaril patient management business to Health Management, Inc. (HMI) for approximately $34 million in cash and notes.
  • The sale is expected to be completed within 45 days, subject to government review under the Hart-Scott-Rodino Act.
  • The Clozaril patient management business involves managing the care of more than 6,000 schizophrenia patients nationwide.
  • Caremark will retain its other specialty pharmaceutical services, including the distribution of human growth hormone and Pulmozyme.
  • Proceeds from the sale of the Clozaril business will be used to fund Caremark's expansion in physician practice management and accelerate the repurchase of Caremark's stock.
  • HMI will expand its national distribution network to approximately 17 regional distribution facilities following the acquisition.
  • The acquisition will enable HMI to expand its comprehensive program of outpatient drug therapies and support services to patients with psychiatric disorders.
  • Caremark is focusing its efforts on the future direction of health care, building networks of patient services that specialize in managed care.

Statistics:

  • The Clozaril patient management business involves managing the care of more than 6,000 schizophrenia patients nationwide.
  • The sale of the Clozaril patient management business is expected to be completed within 45 days.
  • Health Management, Inc. will expand its national distribution network to approximately 17 regional distribution facilities following the acquisition.
  • Caremark International Inc. had 1994 sales of $2.43 billion.
  • The acquisition will enable HMI to expand its comprehensive program of outpatient drug therapies and support services to patients with psychiatric disorders.

Sources:

  • Caremark International Inc. press release, February 21, 1995
  • Health Management, Inc. press release, February 21, 1995
  • Sandoz Pharmaceuticals Corp. press release, 1990 (introduction of Clozaril in the United States)
  • Les Jacobson, Caremark Public Relations, 708-559-4695
  • Clifford E. Hotte, Ph.D., HMI President and CEO, 516-981-0034
  • Diane Perry, The Financial Relations Board, 212-661-8030