Amazon's Pharma Aspirations: Cowen Finds No New License Applications

Is Amazon.com, Inc. AMZN looking to enter the pharmacy space? A review of statewide pharmacy licenses answers the pressing question, according to Cowen. 

The Analyst

Cowen's Charles Rhyee does not directly cover Amazon's stock. The firm has an Outperform rating and $1,500 price target for Amazon. 

The Thesis

An analysis of state pharmacy boards indicates that Amazon isn't actively pushing itself into the pharma space, Rhyee said in a Friday report. (See the analyst's track record here.) 

Amazon obtained wholesaler licenses in 13 states, something the company said is needed to sell professional medical products, the analyst said. The most recent data shows that Amazon has allowed some of its licenses to expire and has only one remaining., he said. Perhaps more important, Amazon hasn't filed for any new wholesale or retail licenses in any of the states where it previously held licenses or had none.

"Until we begin to see more specialized licenses, such as those allowing AMZN to handle controlled substances, we think the competitive threat to the supply chain in the near-term remains low," Rhyee said. 

Cowen's John Blackledge said in November that Amazon's opportunity in the pharmacy space isn't as lucrative as many assume.

Rhyee said Amazon posted a job listing on its website for an experienced HIPAA professional, which isn't indicative of a major push into the pharmacy space. The listing is likely intended to find an expert who can help Amazon explore the multiple possibilities of entering the health care space, but with a "more diligent approach" to compliance, he said. 

Price Action

Shares of Amazon were trading up 0.35 percent at $1,297.85 at the time of publication Friday. 

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