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.
