Guardian Pharmacy Services (GRDN) Stephens 26th Annual Investment Conference | NASH2024 summary

Business overview and market positioning

• Operates over 50 pharmacy locations nationwide, focusing on assisted living, memory care, and skilled nursing facilities.

• Holds a 12% national market share in the assisted living segment, with significant growth ambitions.

• Purpose-built to serve assisted living, addressing unique needs where clinical professionals are scarce.

• Provides tech-enabled services to optimize drug regimens and support medication adherence for elderly residents.

• Converts a high proportion of EBITDA to free cash flow, funding organic growth and M&A from operations.

Regulatory and legislative environment

• 70% of revenue is derived from Medicare Part D, a stable and bipartisan-supported program.

• The Inflation Reduction Act (IRA) introduces price negotiations on certain branded drugs, impacting margins for long-term care pharmacies.

• Industry advocacy is underway to address unintended IRA consequences, with bipartisan support for legislative fixes.

• Draft legislation is being socialized in Congress, with support from key Senate Finance leaders.

• Confident in resolving IRA-related headwinds through both legislative and commercial negotiations with payors.

Growth strategy and market expansion

• Serves 180,000 residents, with two-thirds in assisted living and a third in skilled nursing; behavioral health is a legacy segment.

• Organic growth is driven by expanding in existing markets, increasing resident adoption, and contiguous market startups.

• M&A supplements organic growth, targeting independent pharmacies and contiguous geographic expansion.

• Nine of 51 pharmacies are new or recently acquired, contributing to future scaling.

• Adjacent markets like hospice and PACE are being explored for future expansion.