Walgreens Wins Medly Bid, Closes All Pharmaca Locations
Last month, pharmacy giant Walgreens reached an agreement to acquire the 22-store, Boulder, Colorado-based Pharmaca Integrative Pharmacies, a deal that resulted in the closure of all locations by the end of February. Walgreens purchased the core assets of Medly Health Inc. – the digital-pharmacy that bought Pharmaca in June 2021 and then filed for bankruptcy late last year.
According to the U.S. Bankruptcy Court for the District of Delaware records, Walgreen Inc. will pay $19.35 million for Medly’s prescription records, pharmacy stock and intellectual property, including all trademarks and logos.
Walgreens spokeswoman Kris Lathan said in a statement released last month that Walgreens will close the Pharmaca locations, which include stores rebranded as Medly Pharmacy in Boulder. Another store at 17th and Pearl streets was shuttered in 2020. “We are pleased to have reached agreement to acquire the pharmaceutical records and other select assets across 22 Pharmaca Integrative Pharmacies and four Medly Pharmacies nationally,” Lathan said. “Although specific store details are being finalized given bankruptcy court’s ruling Tuesday, prescription files and inventory are expected to be transferred to nearby Walgreens by mid-February.” Lathan said patients’ pharmacy files will automatically transfer to a selected Walgreens store. “Patients will receive notice about any changes through mail and other means with details about continued access to their prescriptions and other services,” she said.
Walgreens outbid MedPharmaca Holdings Inc. at the bankruptcy auction February 3rd. When Medly sought Chapter 11 protection in December, MedPharmaca agreed to open bidding at $18.5 million for the majority of Medly’s assets, including the Pharmaca locations. However, the December filing indicated MedPharmaca would receive a $450,000 breakup fee and up to $500,000 reimbursement for expenses if another bidder won the auction. Brooklyn, New York-based Medly reported $110 million in secured debt at the time of the bankruptcy filing. Walgreens is the second-largest drugstore chain in the United States behind CVS Health Corp. (NYSE: CVS), which also was outbid for Medly’s scripts and other assets, according to court records.
Pharmaca, founded in June 2000 in Boulder, was the first integrative pharmacy group in the country offering conventional pharmacy services with natural health alternatives, including health and beauty aids. Medly filed for bankruptcy after failing to acquire a $100 million loan for which it applied in the middle of last year. The company stated in court documents that failing to get the loan resulted in their inability to buy the medications needed to fill patient prescriptions. As a result, more than 20 of its stores were forced to shut down.
Founded in 2017, Medly launched with only four digital pharmacies on the East Coast, banking on the profitability of prescriptions delivered same-day, to a patients home, for free. After acquiring the much-bigger Pharmaca, Medly relocated its corporate office to Boulder with Pharmaca’s CEO stepping into the role of Medly’s CEO. Medley’s Co-founder and former CEO, Marg Patel, left the company in August.