Cardinal Health Releases 2025 Report on Cell and Gene Therapy Industry

Cardinal Health (NYSE: CAH) has released its inaugural 2025 Advanced Therapies Report, highlighting the transformative potential and pressing challenges of the rapidly evolving cell and gene therapy (CGT) sector.
The report, built on surveys from over 100 healthcare professionals and interviews with experts and a CAR T-cell therapy patient, explores the promise of CGTs in treating complex diseases like cancer, heart disease, diabetes, and inherited conditions. It predicts over 200 therapy approvals and treatment of more than 100,000 U.S. patients by 2030.

Key findings include:
• Access barriers remain critical, with 56% citing cost and 54% citing reimbursement challenges.
• Collaboration needed, as 69% of respondents support payer-manufacturer initiatives and 53% favor decentralizing treatment beyond academic hubs.
• Patients still face treatment gaps, with 64% identifying lack of social support and 57% pointing to prior authorization denials.

Cardinal Health emphasizes the importance of addressing these barriers to fully realize the potential of CGTs. The full report is available on the company’s website.

Cardinal Health reported strong third-quarter fiscal 2025 results, with notable improvements in profitability and a raised full-year guidance.

Financial highlights:

- Revenue was $54.9 billion, flat compared to the same quarter last year, but up 19% when excluding the expired OptumRx contract.
- GAAP operating earnings rose to $730 million from $369 million, a 98% increase.
- Non-GAAP operating earnings rose 21% to $807 million.
- GAAP net income reached $506 million, or $2.10 per share, up from $261 million or $1.07 per share.
- Non-GAAP net income was $568 million, or $2.35 per share, compared to $511 million or $2.09 per share a year earlier.

Segment results:

- Pharmaceutical and Specialty Solutions revenue was flat at $50.4 billion, but rose 20% excluding OptumRx. Segment profit increased 14% to $662 million due to brand and specialty product growth and positive generics performance.
- Global Medical Products and Distribution revenue grew 2% to $3.2 billion. Segment profit rose 77% to $39 million, aided by cost optimization efforts.
- Other segment revenue (including at-Home Solutions, Nuclear, and OptiFreight) grew 13% to $1.3 billion. Segment profit increased 22% to $134 million.

Cash and capital highlights:

- Operating cash flow for Q3 was $2.9 billion.
- Adjusted free cash flow was $2.8 billion.
- Cash and equivalents stood at $3.3 billion.
- Long-term debt increased to $7.1 billion.
- Shareholder deficit narrowed to $1.9 billion.

Updated fiscal year 2025 guidance:

- Non-GAAP EPS range increased to $8.05–$8.15 from the previous $7.85–$8.00.
- Pharmaceutical and Specialty Solutions segment profit growth guidance was raised to 11.5–12.5%.
- Other segment profit growth guidance was raised to 16–18%.
- GMPD profit outlook narrowed to $130–$140 million.

Fiscal year 2026 outlook:

- Double-digit EPS growth is expected, with continued strength in Pharmaceutical and Other segments.
- GMPD segment profit expected to be at least consistent with fiscal 2025.
- More details will be provided during the June 12, 2025 Investor Day.

Key developments:

- Completed acquisition of Advanced Diabetes Supply Group.
- Expanded MSO platform through acquisitions in the urology space.
- Completed a $375 million accelerated share repurchase.
- Partnered with GE Healthcare on a new diagnostic agent for coronary artery disease.
- Named one of America’s Most Innovative Companies by Fortune for the third consecutive year.

Cardinal Health, Inc. has announced the appointment of Robert W. Musslewhite and Sudhakar Ramakrishna to its Board of Directors, effective immediately. Musslewhite, formerly CEO of Definitive Healthcare Corp., will serve on the Audit and Human Resources and Compensation Committees, while Ramakrishna, President and CEO of SolarWinds Corporation, will join the Audit and Risk Oversight Committees. Both directors have been determined to be independent under NYSE and SEC regulations.

Their terms will last until the 2025 annual meeting of shareholders, where successors will be elected. The new directors will receive compensation in line with other non-employee board members. Cardinal Health issued a press release on March 10, 2025, confirming the appointments.

Cardinal Health reported second-quarter fiscal year 2025 revenue of $55.3 billion, a 4% decline from the prior year, primarily due to the expiration of a large customer contract. Excluding this impact, revenue grew 16%. GAAP operating earnings rose 9% to $549 million, and GAAP diluted EPS increased 10% to $1.65. Non-GAAP operating earnings also grew 9% to $635 million, driven by strong performance in the Pharmaceutical and Specialty Solutions segment. Non-GAAP diluted EPS increased 2% to $1.93.

The company raised its full-year fiscal 2025 non-GAAP EPS guidance to a range of $7.85 to $8.00, up from the previous range of $7.75 to $7.90. The revised guidance reflects stronger growth in the Pharmaceutical and Specialty Solutions segment and the completion of acquisitions, including a 73% ownership stake in GI Alliance.

Segment performance varied, with Pharmaceutical and Specialty Solutions revenue down 4% to $50.8 billion due to the contract expiration but increasing 17% excluding this impact. Segment profit rose 7% to $531 million, driven by growth in BioPharma Solutions and specialty pharmaceutical sales. The Global Medical Products and Distribution segment saw revenue increase 1% to $3.2 billion, while segment profit rose to $18 million due to cost optimization initiatives. The "Other" segment, which includes at-Home Solutions and Nuclear and Precision Health Solutions, reported 13% revenue growth to $1.3 billion, with segment profit increasing 11% to $118 million.

During the quarter, Cardinal Health completed acquisitions of GI Alliance and Integrated Oncology Network, strengthening its specialty healthcare offerings. The company also started routine production of actinium-225 for cancer treatment, launched a new at-Home Solutions distribution center, and introduced the Kendall SCD SmartFlow™ Compression System in the U.S.

Despite a $400 million net cash outflow from operations in Q2, the company secured $2.9 billion in new debt financing to support acquisitions. The effective tax rate declined to 21.4% from 27.9% in the prior year.

Looking ahead, Cardinal Health expects Pharmaceutical and Specialty Solutions segment profit to grow between 10% and 12%, higher than the previous 4% to 6% estimate. However, guidance for Global Medical Products and Distribution segment profit was lowered to $130 million to $150 million due to a write-off in its WaveMark business.

The company remains focused on specialty healthcare expansion, operational efficiencies, and strategic acquisitions to drive future growth.