McKesson (MCK) Morgan Stanley 24th Annual Global Healthcare Conference summary

Recent financial performance and guidance

• Achieved double-digit growth in three of four reportable segments, with Q1 EPS guidance raised by $0.40 to $44.20–$45, reflecting 13–15% growth; normalized year-over-year EPS growth is 15–17%.

• North American Pharmaceutical AOI growth guidance was raised, driven by strong specialty and health system growth; Oncology & Multispecialty and RxTS segments maintained guidance with solid momentum.

• Oncology & Multispecialty segment saw 33% top-line and 41% AOP growth, with organic growth at 15% after adjusting for acquisitions.

• RxTS segment posted 9% top-line and 13% AOP growth, with new programs like GLP-1 Medicare bid contributing to early momentum.

• Medical-Surgical segment reported 4% top-line growth but a 20% AOP decline due to product mix and one-time costs; guidance for the year is 0–4% AOP growth.

Strategic initiatives and acquisitions

• Precision Medicine Group (PMG) acquisition aligns with oncology and biopharma services strategy, enhancing clinical research and commercial capabilities.

• PMG complements existing assets like SCRI, Ontada, and US Oncology Network, expanding reach in clinical trials and market access.

• The deal is expected to be both strategically and financially accretive, with further details to be shared upon closing.

• Capital deployment remains focused on organic and inorganic growth, with $5 billion in share repurchases planned and a 15% dividend increase.

• Continued expansion in MSO and specialty platforms, including PRISM in ophthalmology, following a similar playbook as oncology.

Contract renewals and policy environment

• Maintains a long-standing partnership with CVS, with regular contract renewals; about one-third of contracts are renewed annually.

• Confident in navigating policy changes, including IRA Part B drug pricing and 340B program uncertainties, leveraging scale and capabilities.

• Advocates for community-based care as a cost-effective solution, supporting models that insulate providers from economic harm.