Tag: Rite Aid Corp.

Rite Aid Files For Bankruptcy Amid Opioid Lawsuits

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U.S. pharmacy chain Rite Aid Corp. filed for bankruptcy in an effort to close unprofitable stores, address lawsuits over its role in the opioid pandemic, and rework a debt load of roughly $4 billion. What do you think?

“The true victims of the opioid epidemic are finally coming to light.”

Camilla Danner, Relationship Mediator

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“I’d be happy to take some of those pills off their hands if they need to make a quick buck.”

Alfred Moros, Gandy Dancer

“Will they still honor my prescription for 500,000 oxy tablets?”

Santos Turner, Gift Wrapper

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October 17, 2023
Debt-ridden Rite Aid files for bankruptcy, will close more stores

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Drugstore chain Rite Aid Corp. filed for bankruptcy Sunday, as it faces billions of dollars of debt related to opioid lawsuits.

In a statement Sunday night, Rite Aid
RAD,
-16.81%
said it will close some “underperforming” stores and announced Jeffrey Stein as its new chief executive and chief restructuring officer. Interim CEO Elizabeth Burr will remain on the company’s board.

The bankruptcy filing had been expected for months, and the Wall Street Journal reported in August that Rite Aid was more than $3.3 billion in debt, due largely to hundreds of lawsuits related to its distribution of opioid painkillers. The bankruptcy filing stays pending litigation against the company.

Earlier this month, the New York Stock Exchange warned Rite Aid that it was “no longer in compliance” with the exchange’s minimum pricing and valuation standards, and gave it six months for the stock to regain compliance. Rite Aid shares have plunged about 80% year to date.

Rite Aid said Sunday that lenders will provide $3.45 billion in financing for the chain to continue operating through the chapter 11 bankruptcy process.

“With the support of our lenders, we look forward to strengthening our financial foundation, advancing our transformation initiatives and accelerating the execution of our turnaround strategy,” Stein said in a statement. “In doing so, we will be even better able to deliver the healthcare products and services our customers and their families rely on — now and into the future.”

Rite Aid said it would work to minimize the effect of store closures on its customers so there is no disruption of services, and will transfer affected workers to different locations when possible.

Rite Aid has about 2,100 stores and employs around 47,000 people. It has closed more than 200 stores in the past couple of years.

Rite Aid also said it had reached a deal for pharmacy benefit-solutions company MedImpact Healthcare Systems Inc. to acquire its Elixer Solutions business. A price for the transaction was not disclosed.

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October 15, 2023
Debt-ridden Rite Aid files for bankruptcy, will close more stores

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Drugstore chain Rite Aid Corp. filed for bankruptcy Sunday, as it faces billions of dollars of debt related to opioid lawsuits.

In a statement Sunday night, Rite Aid
RAD,
-16.81%
said it will close some “underperforming” stores and announced Jeffrey Stein as its new chief executive and chief restructuring officer. Interim CEO Elizabeth Burr will remain on the company’s board.

The bankruptcy filing had been expected for months, and the Wall Street Journal reported in August that Rite Aid was more than $3.3 billion in debt, due largely to hundreds of lawsuits related to its distribution of opioid painkillers. The bankruptcy filing stays pending litigation against the company.

Earlier this month, the New York Stock Exchange warned Rite Aid that it was “no longer in compliance” with the exchange’s minimum pricing and valuation standards, and gave it six months for the stock to regain compliance. Rite Aid shares have plunged about 80% year to date.

Rite Aid said Sunday that lenders will provide $3.45 billion in financing for the chain to continue operating through the chapter 11 bankruptcy process.

“With the support of our lenders, we look forward to strengthening our financial foundation, advancing our transformation initiatives and accelerating the execution of our turnaround strategy,” Stein said in a statement. “In doing so, we will be even better able to deliver the healthcare products and services our customers and their families rely on — now and into the future.”

Rite Aid said it would work to minimize the effect of store closures on its customers so there is no disruption of services, and will transfer affected workers to different locations when possible.

Rite Aid has about 2,100 stores and employs around 47,000 people. It has closed more than 200 stores in the past couple of years.

Rite Aid also said it had reached a deal for pharmacy benefit-solutions company MedImpact Healthcare Systems Inc. to acquire its Elixer Solutions business. A price for the transaction was not disclosed.

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October 15, 2023
Ozempic and other weight-loss drugs boost pharmacy sales at Rite Aid

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Rite Aid Corp. said Thursday that its fiscal first-quarter pharmacy sales got a boost from a new class of drug.

Pharmacy sales, which rose 3.4% from a year ago, were boosted by higher sales of Ozempic and other GLP-1 receptor agonists, which are used to treat Type 2 diabetes and obesity.

The higher sales did not translate into profit, however.

“As the cost of these drugs is also high, the impact of the increase in volume of these drugs on our gross profit dollars is minimal,” Rite Aid Chief Financial Officer Matthew Schroeder told analysts on the company’s earnings call, according to a FactSet transcript.

Still, the company
RAD,
+2.96%
cheered investors by raising its full-year revenue guidance due to the sales bump from Ozempic and other high-dollar GLP-1 drugs. It now expects revenue of $22.6 billion to $23 billion, ahead of the FactSet consensus of $22.3 billion.

Ozempic, Wegovy and Rybelsus, which are made by Novo Nordisk
NOVO.B,
+0.17%

NOVO.B,
+0.17%,
and Mounjaro, which is made by Eli Lilly & Co.
LLY,
+1.34%,
have become so popular in the U.S. that supplies have at times run short and the U.S. Food and Drug Administration has been forced to warn patients against using knockoff versions.

The drugs are administered by injection and mimic the effects of GLP-1, a gut hormone that can help control blood-sugar levels and reduce appetite. GLP stands for glucagon-like peptide.

Ozempic, Rybelsus and Mounjaro have been approved by the Food and Drug Administration for treatment of Type 2 diabetes, while Wegovy is approved for people with obesity and for certain people with excess weight combined with weight-related medical problems.

Last year, more than 5 million prescriptions for Ozempic, Mounjaro, Rybelsus or Wegovy were written for weight management, up from 230,000 in 2019, according to data and analytics firm Komodo Health.

Obesity drugs could be a $54 billion market by 2030, up from $2.4 billion in 2022, Morgan Stanley said in a report last year. Reports of people who take GLP-1 drugs seeing improvements in addictive behaviors such as smoking and drinking have lately amplified interest in the medications.

For more, read: The dark side of the weight-loss-drug craze: eating disorders, medication shortages, dangerous knockoffs

Drug companies, including Lilly and Pfizer Inc.
PFE,
-0.32%,
are now working to develop treatments in the form of pills that could be more convenient alternatives to the injectables.

See now: Weight-loss drugs in development aim to replace injections with pills

Rite Aid’s overall numbers surprised on the upside, as its loss was narrower than expected and revenue beat the consensus estimate.

For more, see: Rite Aid’s stock soars 7.5% after company surprises with earnings that are less bad than feared

Eleanor Laise contributed.

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June 29, 2023