Pharmacy store chain operator Walgreens, a subsidiary of Walgreens Boots Alliance, Inc. (NASDAQ: WBA), recently announced the launch of its clinical trial business.
Following the news, shares of the company declined 2.6% to close at $39.67 during yesterday’s trading session. However, this can be attributed to wider market concerns.
Details of the Launch
Taking into account Walgreens’ wide repertoire of patient insights, partner-enabled health and technology capabilities, and in-person and virtual care options, the clinical trial business is expected to increase patient access and retention in drug development research. Furthermore, it is expected to extend clinical trials among diverse communities, which are presently skewed towards the white populace.
To mitigate patient recruitment and enrollment challenges, the company will adopt insights-driven patient recruitment, make use of real-world evidence and informatics, and enable a validated and secure decentralized clinical trial platform, protecting the privacy and security of patients.
Management’s Take
Ramita Tandon, Chief Clinical Trials Officer at Walgreens, said, “Walgreens trusted community presence across the nation, combined with our enterprise-wide data and health capabilities, enables us to pioneer a comprehensive solution that makes health options, including clinical trials, more accessible, convenient and equitable.”
Stock Rating
Consensus among analysts is a Hold based on one Buy, eight Holds, and one Sell. The WBA average price target of $48.20 implies upside potential of 21.5% from current levels. Meanwhile, shares have declined 21.7% over the past year.
Hedge Funds’ Confidence
The TipRanks’ Hedge Fund Trading Activity tool shows that hedge fund confidence in WBA is currently Positive. The cumulative change in holdings across the 18 hedge funds that were active in the last quarter was an increase of 269,900 shares.
Conclusion
The move by Walgreens to venture into the clinical trials space seems to be a strategic fit for the company as it already has vast swathes of patient data, which will help the process of solidifying this new business easier.
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