Phlo today (April 4) announced its acquisition of the UK assets of US-based online prescription service Truepill for an undisclosed sum in a “landmark” digital pharmacy consolidation.
The UK digital pharmacy has also acquired Truepill UK’s business-to-business (B2B) healthcare partnerships, NHS patient base and technology solutions, it said.
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It follows a £10 million investment secured by Phlo in a successful “Series A” venture capital financing round.
And it comes as the pharmacy regulator’s former chair has raised concerns about whether a purely online pharmacy model is sustainable, suggesting it is “difficult” to make money.
“Landmark consolidation”
“This is a landmark consolidation in the sector and one of the most significant acquisition deals in the history of digital pharmacy in the UK,” Phlo said.
The acquisition makes Phlo the UK market-leading provider of B2B pharmacy services, medication dispensing and prescription delivery, according to the online pharmacy.
Phlo said it has acquired Truepill’s partnerships with “several of the UK’s most popular digital healthcare providers”, including contraceptive advice and support platform The Lowdown and London-founded gynaecological health platform Daye.
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Other partnerships include metabolic health companies Levels and Veri, as well as contraception and intimate care company Hanx, it added.
Phlo’s NHS digital pharmacy has acquired Truepill’s NHS patient base, while the company has also acquired Truepill UK’s technology infrastructure, including its full set of application programming interfaces (APIs) and prescribing technology, it said.
“Once integrated, Phlo’s technology will facilitate the prescribing, dispensing and delivery of prescribed and off-the-shelf medications and treatments directly to the users of these platforms,” it added.
“Highly competitive”
Phlo said that the acquisition came after Truepill’s “decision to focus solely on its US operations”.
“A highly competitive bidding process for the acquisition of the UK business was announced in the autumn of 2022,” it added.
It said that it “emerged as the preferred bidder” due to “synergies in technology infrastructure, patient care, and the pharmacy services provided both for NHS and private partners”.
Expansion plans
The consolidation will enable Phlo to “expand” its digital pharmacy services, including by extending “the geographic footprint of its operations”, it said.
The online pharmacy plans to launch “same-day on-demand medication delivery” in Manchester, alongside its services in London and Birmingham, it added.
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And Phlo plans to increase its headcount - which currently stands at 90 employees across the UK - with all of Truepill UK’s existing pharmacy and warehouse staff offered jobs with the company, it said.
The online pharmacy has “committed to support Truepill’s US partners should any of them look to launch into the UK market” as part of the commercial partnership attached to the deal, it added.
“Both organisations have also agreed to explore further joint ventures as appropriate,” it said.
“Stronger position than ever”
Phlo founder and CEO Nadeem Sarwar said that he is “delighted” that the consolidaiton will “enable further improvements to the excellent service that Phlo offers to patients and partners and also allow us to extend that service by welcoming new patients and partners across the country”.
He thanked the team at Truepill for “their assistance in making the sale a smooth one and for their commitment to their patients and partners during this time”.
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“Following our Series A raise, Phlo is in a stronger position than ever to lead digital transformation in the pharmacy sector and to play a pivotal role in improving health outcomes in the UK,” Mr Sarwar said.
Phlo chairman Jason McGibbon added that the deal “caps an incredibly busy and successful six-month period for the team”.
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Truepill UK managing director Shakil Ahmed said that he is “delighted to be continuing an ongoing commercial partnership with Phlo that will allow our US partners to launch in the UK in the future”, following the company’s “decision to focus on the US market”.
Phlo’s “long-standing advisers” Addleshaw Goddard's corporate team in Scotland advised it on the acquisition, while Brabners’ corporate team - which last year advised on £550 million worth of merger and acquisition deals - advised Truepill on the disposal, Phlo said.
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Phlo’s NHS service, Phlo Digital Pharmacy, currently provides a same-day NHS and private prescription delivery service to patients in Birmingham and London, plus 24 and 48-hour delivery options for patients across the UK.
Its B2B service, known as Phlo Connect, provides digital pharmacy infrastructure that enables healthtech companies and private healthcare providers to offer a seamless, complete digital pharmacy service.
Its existing partners include Babylon,Leva Clinic, SkinDoc, Syrona Health, and The Dermatology Partnership.
