Diplomat Pharmacy Soars After Pricing Public Offering

Flint-based Diplomat Pharmacy recently announced the pricing of its follow-on public offering of 8,540,109 shares of common stock at a price to the public of $29 per share.

The company jumped more than ten percent on the news.

In October 2014, Phil Hagerman, Diplomat’s Chairman and CEO, rang the opening bell at the New York Stock Exchange (NYSE), offering 13,333,333 shares of common stock under the symbol “DPLO”. The company used the proceeds from the initial public offering (IPO) to pay off its debt.

Now, Diplomat has returned to raise additional financing. In the offering, the company is selling 5,540,109 shares of common stock and certain shareholders of Diplomat are selling 3,000,000 shares of common stock. Diplomat has granted the underwriters a 30-day option to purchase up to an additional 1,281,016 shares of common stock. The company said that it will not receive any proceeds from shares of common stock sold by the selling shareholders.

Diplomat is the nation’s largest independent specialty pharmacy, which serves patients and physicians in all 50 states. It focuses on medication management programs for patients with complex chronic diseases including oncology, immunology, hepatitis, multiple sclerosis, HIV, specialized infusion therapy and other serious or long-term conditions.

In an effort to expand its infusion services, Diplomat recently acquired BioRx, LLC, a highly specialized pharmacy and infusion services company that provides treatments for patients with ultra-orphan and rare, chronic diseases. Diplomat paid BioRx $210 million in cash and $105 million in Diplomat common stock. If the offering goes as planned, it will boost Diplomat’s balance sheet, giving the company the flexibility to pay off debt that it will take on as part of its decision to purchase BioRx.

The 40-year old pharmacy opened its doors in 1975 as a neighborhood family with the motto “Take good care of patients, and the rest falls into place.” Hagerman did not always plan on making Diplomat a publicly traded company. However, as the company’s capabilities grew and expanded into retail, hospital and pharma services, Hagerman and his team recognized that the company could fill a significant void in the industry, a void that existed because there had not been a publicly traded specialty pharmacy that was not part of a larger company since Medco acquired Accredo in 2005.

In a previous SPJ article, Hagerman said that Diplomat’s success will continue to be driven by the continued process of leadership acquisition and reinvention. But the company remains committed to never forgetting what got Diplomat to where it is now, and that is focusing on one patient at a time.

Source: Diplomat Pharmacy, Inc.

Last updated: 3/27/15; 12:00pm EST

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