Option Care fueled by balanced portfolio, strong margins, strategic expansion

BANNOCKBURN, Ill. – Option Care Health delivered a strong second quarter, reporting 15.4% revenue growth to $1.416 billion, with both its acute and chronic care portfolios showing mid-teen gains. 

“The acute therapy growth we delivered in the quarter was notably higher than we believe the overall market to be growing,” said CFO Mike Shapiro on a recent call to discuss the company’s earnings. “(In the) acute portfolio, the product margins are north of 50%. The chronic portfolio presents anywhere from 5% to 30% margin profiles.” 

Market headwinds and strategic shifts 

Option Care navigated pricing shifts and biosimilar competition, including a $20 million headwind from Stelara—one of the first 10 drugs subject to negotiation under the Inflation Reduction Act. That’s up from $5 million in Q1. 

“Some of the PBMs are starting to make that a little bit more of an initiative for them as they move that ahead,” said Rademacher. “Again, our focus has been around making certain that we have access to the products and expanding them into our portfolio as we move forward. There certainly are other opportunities where there's transition of some of those patients on to, let's call it, the next-generation chronic inflammatory disease products that are part of our portfolio, as well.” 

Operational efficiency and capital strategy 

Option Care generated more than $90 million in operating cash flow in the second quarter and is on track to exceed $320 million for the full year.  

“One of the hallmarks of our business has been our focus on operating effectiveness and cash generation,” said CEO John Rademacher. “As a result, we have a strong balance sheet and flexibility to deploy capital to increase value to our shareholders. Our multifaceted approach to capital deployment allows us to thoughtfully assess opportunities to utilize our cash through M&A, internal investments or share repurchases.” 

The company also repurchased $50 million in shares during the quarter and continues to evaluate M&A opportunities, said Rademacher. 

“We continue to be very focused around looking for opportunities on the core and looking to expand capability set,” he said. “We've also continued to think about areas that are enablement, whether it's in nursing and other capability sets that help us continue to advance to grow and increase some of the clinical capabilities.” 

Expansion through Intramed Plus 

To that point: Option Care’s acquisition in January of Intramed Plus supports its advanced practitioner model, strengthening its clinical depth and geographic reach. 

“Our investments in Intramed Plus and elsewhere across the country have provided valuable insights into our successful execution of this model, which we believe are critical to expanding across our national network,” said Rademacher.