The online pharmacy announced Monday that it will cease selling health and beauty products next month to focus on prescriptions for cancer, HIV and transplant patients. The Memphis-based company will direct most current customers to one-time archrival Drugstore.com.
"This is the culmination of a lot of work over several months to transition to a business model that has a sustainable, viable future," said Michael Beindorff, PlanetRx's chairman and chief executive. "The tide toward specialty pharmacies is growing and we think will be substantial. This places us in a much stronger place to ride that tide than we were."
Last month, PlanetRx was delisted from the Nasdaq national market. In the last year, the company laid off about 50 percent of its employees working in its former headquarters in South San Francisco, Calif., and moved most of its operations to Memphis, Tenn.
Drugs for oncology and HIV patients are often among the newest and most expensive pharmaceuticals on the market. PlanetRx currently fills such drugs only on a case-by-case basis, Beindorff said.
As part of its new focus, PlanetRx has signed a letter of intent to acquire an existing specialty pharmacy and that pharmacy's customers. PlanetRx executives declined to name the company being acquired or to disclose how much the deal will cost, saying they will release more details later this month once they complete the deal. The acquisition primarily will be a stock-based transaction, Beindorff said.
PlanetRx will base its business around the company it is acquiring, Beindorff said. He will remain the company's CEO but will split the chairmanship of the combined company with an executive from the company PlanetRx is acquiring, he said.
PlanetRx will refer customers to Drugstore.com as part of a short-term marketing agreement between the two companies. PlanetRx executives declined to say how much the deal is worth. Beindorff said PlanetRx will only share customer information with Drugstore.com if its customers ask it to.
PlanetRx has begun notifying customers that it is getting out of the mainstream pharmacy business.
Backed by Benchmark Capital, PlanetRx went public in summer 1999, just months after opening for business.