Centene completes sale of PANTHERx subsidiary

Updated: July 18 at 10:28 a.m.

Centene has completed its divestiture of one of its pharmacy subsidiaries, the company said last week.

The insurer announced in May that it will sell off PANTHERx to the Vistria Group, General Atlantic and Nautic Partners. Centene acquired the specialty pharmacy in 2020. The company plans to use the majority of the proceeds from the sale to repurchase stock, and then apply the balance to pay down debt.

"We are pleased to close this transaction, which represents another key milestone in our value creation plan and enables us to continue focusing on our core business," said Sarah London, CEO of Centene, in a statement.

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Centene will sell off two of its pharmacy businesses, the insurer announced Thursday.

The government insurance giant said that will sell its Magellan Rx subsidiary to Prime Therapeutics, a pharmacy benefit manger backed by some of the country's largest Blues plans, and in a separate deal will sell PANTHERx to The Vistria Group, General Atlantic and Nautic Partners.

The company expects to receive $2.8 billion from the two transactions.

Centene announced last year that it planned to exit the PBM space as part of its ongoing value-creation effort and strategic review of its business, CEO Sarah London said in a statement.

"Magellan Rx is a valuable asset, and under different ownership we believe it will continue to thrive as a next-generation pharmacy solutions organization," London said. "Likewise, PANTHERx is a leader in rare and specialty pharmacy, and we are confident this transaction will position the company to effectively grow while ensuring patients get the critical, specialized care they deserve."

Magellan Rx offers comprehensive benefits management tools including specialty pharmacy and Medicaid administration. Centene acquired the PBM as part of its Magellan Health buy, which closed earlier this year. The sale is expected to close in the fourth quarter, pending regulatory approvals.

PANTHERx is one of the country's largest specialty and rare pharmacies and was acquired by Centene in 2020. Pending regulatory approval, Centene expects the deal to close in the next two to four months.

Centene's decision to get out of the PBM market comes after it has settled a series of pharmacy benefit management-related Medicaid cases across multiple states. The company said it has set aside $1.1 billion to deal with these cases.

The company plans to use the proceeds from both sales to buyback stock and reduce debt.