Guardian Pharmacy Services (GRDN) Stephens 26th Annual Investment Conference | NASH2024 summary

Business overview and market positioning

• Operates over 50 pharmacy locations nationwide, focusing on assisted living, memory care, and skilled nursing facilities.

• Holds a 12% national market share in the assisted living segment, with significant growth ambitions.

• Purpose-built to serve assisted living, addressing unique needs due to limited clinical staff in these settings.

• Offers tech-enabled services to optimize drug regimens and support medication adherence for elderly residents.

• Growth strategy combines organic expansion and M&A, supported by strong free cash flow conversion.

Regulatory and legislative environment

• 70% of revenue is derived from Medicare Part D, a stable and bipartisan-supported program.

• The Inflation Reduction Act (IRA) introduces price negotiations on certain branded drugs, impacting margins for long-term care pharmacies.

• Active advocacy in Washington aims to address IRA-related reimbursement issues, with bipartisan support for a legislative fix.

• Ongoing commercial negotiations with PBMs to mitigate IRA impacts, with confidence in resolving issues by 2026.

• Draft legislation is being socialized with key Senate Finance leaders to address industry concerns.

Growth strategy and market expansion

• Serves 180,000 residents, with two-thirds in assisted living and a third in skilled nursing; behavioral health is a legacy segment.

• Organic growth driven by new community onboarding, increasing resident adoption, and contiguous market expansion.

• M&A supplements organic growth, with recent acquisitions and greenfield startups contributing to scale.

• Focus remains on assisted living, with selective skilled nursing engagement and ongoing behavioral health service.

• Exploring adjacent markets such as hospice and PACE, with experimental service models under consideration.