Company Report: Dominating Global Healthcare Distribution

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Cencora Inc (COR)


Table of Contents

Executive Summary

Cencora (previously known as AmerisourceBergen) focuses on sourcing and distributing pharmaceutical products.

Cencora operates globally, distributing a wide range of products including pharmaceuticals, over-the-counter healthcare items, home healthcare supplies and equipment, and other speciality products like plasma and injectable pharmaceuticals to healthcare providers such as hospitals, retail pharmacies, and medical clinics.

​Why is this valuable? The pharmaceutical supply chain is complex. It comes with stringent regulatory requirements, the need for temperature-controlled logistics, and even counterfeit products. Cencora works in the background to help its clients (hospitals, retail pharmacies, etc.) navigate these complexities, ensuring the integrity and safety of pharmaceutical products from manufacturers to patients.

​Cencora generates revenue by leveraging its distribution network and expertise to serve its customers.​

The company reported a revenue of $262.2 billion in FY 2023 and operates in 50 countries, making it a key player in the global healthcare distribution space.

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Strategic Market Positioning

​Cencora has several tailwinds working in its favour. The healthcare and pharmaceutical distribution industry is experiencing growth due to an ageing global population, increasing prevalence of chronic diseases, and a surge in healthcare spending, especially in emerging markets. These trends are likely to lead to more demand for pharmaceutical distribution services, giving Cencora an opportunity for expansion and increased market share.

The number of people aged 65 or older in the US is expected to rise to 73.1 million by 2030 and 86 million by 2050. Driven by the baby boomer generation retiring and increasing lifespans. COR is well-positioned to leverage this increased demand, leading with key customer partnerships in retail, speciality, and health systems in the US and Europe.​

As part of Cencora’s strategic growth initiatives, the company established its investment arm called Cencora Ventures, a $150 million corporate venture fund. This fund is focused on investing in emerging healthcare startups, looking to disrupt the healthcare sector. Cencora also plans to leverage its resources and expertise to help these startups scale.

In addition to financial investments in startups, Cencora made a strategic acquisition to expand its global biopharma services platform. The company acquired PharmaLex Holding GmbH, a provider of specialised services for the life sciences industry, for €1.28 billion.

This acquisition is expected to expand Cencora’s global portfolio of solutions to support pharmaceutical manufacturers throughout the development and commercialisation journey. PharmaLex's expertise in scientific, regulatory, and safety compliance is particularly aimed at offering strategic guidance and regulatory support to biopharma companies across the product lifecycle​.

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