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Medco to buy diabetes product firm PolyMedica

August 29, 2007|From the Associated Press

trenton, n.j. -- Medco Health Solutions Inc., the country's largest prescription benefit manager, said Tuesday that it would pay $1.5 billion in cash for PolyMedica Corp., long the largest U.S. supplier of diabetes treatment products.

Buying PolyMedica, which has nearly 1 million patients and includes the well-known Liberty Healthcare brand, expands Medco's foothold in a fast-growing drug category worth more than $25 billion a year.

PolyMedica is best known for its ads starring portly mustachioed character actor Wilford Brimley, who appeared in the films "Cocoon" and "The Natural" and in Quaker Oats ads.

Medco already has 2.8 million customers with diabetes -- more than one-quarter of all insured diabetics. With the purchase, the company could eventually treat half the nation's insured diabetics, said David Snow, Medco's chief executive.

The $53-a-share price is a 17% premium to Wakefield, Mass.-based PolyMedica's closing stock price Monday of $45.29, near its 52-week high of $47.46.

PolyMedica shares jumped $6.40, or 14%, to $51.69 on Tuesday; shares of Franklin Lakes, N.J.-based Medco fell $1, or 1.2%, to $85.11.

PolyMedica distributes blood glucose test kits and meters, insulin and lancets directly to the homes of patients. It also operates a mail-order pharmacy, and since November 2004 Medco has been filling prescriptions for PolyMedica patients and now handles more than 50,000 a week.

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