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Molina Magellan Purchase, And Other News: The Good, Bad And Ugly Of Biopharma


  • Molina Healthcare signs a deal to purchase Magellan.
  • Applied DNA Sciences enters the FDA Emerging Technology Program.
  • Verona Pharma faces trial uncertainty.
  • Looking for more stock ideas like this one? Get them exclusively at The Total Pharma Tracker. Get started today »

Molina Agrees To Buy Magellan Complete Care For $820 Million

Molina Healthcare Inc. (NYSE:MOH) announced that it has inked a deal to acquire Magellan Complete Care, a part of Magellan Health Inc. (MGLN). The deal has been valued at $820 million and is expected to close in the first quarter of 2021. Magellan Complete Care serves nearly 155,000 members in government-sponsored healthcare programs such as Medicare and Medicaid in six states including Arizona and New York.

Molina recently nixed its $50 million acquisition deal with NextLevel Health Partners Inc. The company stated that NextLevel’s refusal to go by the terms and conditions of the acquisition deal was the main reason behind the retraction. With regard to its latest acquisition, the company CEO Joseph Zubretsky said, “Acquiring MCC expands our geographic footprint in our core businesses of managed Medicaid, dual eligibles (for Medicaid and Medicare), and long-term services and supports. We believe it will allow us to scale our enterprise-wide platforms and benefit from both operating and fixed cost leverage.”

With the new deal, Molina’s subscriber base will expand to over 3.6 million members and will span 18 states. The pro forma projected revenue for 2020 is over $20 billion. Molina stated that MCC provides a strategic fit and will help create new markets. It will also help Molina in expanding its geographic presence. The transaction is expected to add approximately $3 billion of revenue by 2021. It will also offer attractive leverage to the company’s fixed cost base. Molina believes that the acquisition will help it reach its target margins.

Molina also reaffirmed its guidance for 2020. The company also reported its financial numbers for the first quarter. Its premium revenue grew 8.9 percent on a year-over-year basis to touch $4.3 billion while its total revenue stood at $4.5 billion, up from $4.1 billion in revenue

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