Drugstore.com's Rival Exits The Retail Trade
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Apparently unable to heal itself, San Francisco-based PlanetRx.com Inc. is exiting the retail pharmacy business and referring its 1.4 million members to rival drugstore.com.
The company, with a stock price in the 50-cent range, said it plans to acquire an unspecified existing specialty pharmacy business and focus on fulfilling specialty prescriptions through its existing site. Nasdaq delisted the company last December.
A workforce reduction among its 200 employees is expected, according to published reports.
The old online store will close on March 12 and prescription refills will be handled only until Feb. 26, according to a notice posted on the Web site. The new business apparently will focus on prescriptions for cancer, HIV and organ transplant recipients.
PlanetRx, founded in 1997, said it has already "begun implementing steps to monetize the company's distribution center and other assets not essential to the new business."
Putting the best face possible on it, Michael Beindorff, chairman and chief executive officer, said in a statement: "This is an effort that we have been working on for quite some time, and we are very excited about our future in the specialty pharmacy business. We are repurposing the extensive healthcare expertise, relationships, brand, and other assets of PlanetRx against a faster growing, less costly, higher margin business opportunity."
The company had been struggling for some time. Last August it announced plans to relocate its headquarters from San Francisco to Memphis, the site of its 175,000 square-foot distribution center, customer care organization and pharmacy. The company said then that the move would cut the burn rate in half, but clearly the effort was too little, too late.
To its customers, PlanetRx said it is providing the option to transfer prescription needs to drugstore.com. Participation in the referral program will be voluntary and customer information will be shared only at the request of the customer.
Drugstore.com stock was up almost 19 cents on the news in early trading, to $1.50. PlanetRx stock was down almost 20 percent in the early going. Drugstore.com has not been immune from business woes, either. It cut its staff by about 20 percent or 125 jobs last month and has never made any money.
The drugstore.com pharmacy offers access to licensed clinical pharmacists, an easy-to-understand drug interaction checker, personalized patient medical records, notification of Food and Drug Administration (FDA) safety warnings and recalls, and options to pick up prescriptions at a local Rite Aid store or have them mailed.
*Beth Cox writes for internetnews.com, a property of internet.com.