Memphis-based Accredo Health Group ended the fourth quarter and its fiscal year with sizable gains, continuing a record-breaking earnings streak that has lasted more than two years. The provider of specialty pharmaceuticals bested its revenue from the prior quarter by 31.3 percent to a record of nearly $3 billion.
For 2010, Accredo’s revenues increased 19.1 percent to a record of more than $11.3 billion, a strong growth the company said primarily reflects improvement in the industry and contributions from significant new client relationships.
“Everything we do is really driven by the care we give to our patients, and that’s what I think enables our success on an ongoing basis is that we try to provide the best possible patient care,” Accredo president Steve Fitzpatrick told The Daily News Tuesday. “Our employees know the therapies they work with and we have dedicated teams around certain therapies that we call therapeutic resource centers. Those differentiate what we do because we know the diseases and the therapies we’re working with better than anybody else, and that has an impact on providing the proper care and lowering overall health costs.”
Accredo’s parent company, New Jersey-based Medco Health Solutions, also reported record gains Tuesday, including Q4 2010 net revenues of $16.9 billion, representing an 11.1 percent increase over Q4 2009. The company’s service revenues growth of 58.7 percent reflected record revenues of $350 million compared to $220 million in fourth-quarter 2009.
Accredo’s operating income for Q4 2010 grew 30.7 percent to $109.9 million, while full-year operating income increased 22.7 percent to a record $438.2 million, up from $357.1 million in 2009 and driven primarily by the revenue growth.
The 2010 product mix reflects significant growth in the multiple sclerosis, rheumatoid arthritis, and oncology product categories.
“We operate in a growth-oriented market that is growing significantly,” Fitzpatrick said. “It’s got a rich pipeline of new drugs that are in clinical trials, and we had a record year for a number of new drug introductions with 24 new drugs introduced last year, and that continues to drive our business. We had some very solid new accounts that we signed the first part of last year that also drove our overall performance.”
However, Accredo’s fourth-quarter 2010 gross margin percentage decreased to 6.5 percent compared to 7 percent for the same period in 2009. Accredo’s full-year 2010 gross margin percentage was 6.8 percent compared to 7.4 percent in 2009, a decline primarily stemming from product, channel and new-client mix.
The company employs 5,000 individuals at more than 80 locations, with the largest pool of about 1,800 based in Memphis.
“I think we’re fortunate to be in a strong market, and we’re most fortunate because we’ve got 5,000 phenomenal employees that work hard and are probably the most caring group of people that I know as far as interacting with the patients,” Fitzpatrick said. “That’s the one thing that I think I’m personally proud of and it’s nice to work in an environment like that. That’s what differentiates us, and it’s always nice when the financial results validate that what we’re doing is the right thing.”
Fitzpatrick said the company is hiring for more than 100 positions total.
As for Medco, its full-year 2010 net revenues increased 10.3 percent from 2009 to a record of nearly $66.0 billion, mostly as a result of contributions from new clients and higher prices charged by brand-name pharmaceutical manufacturers, partially offset by higher volumes of lower-priced generic drugs.