There are no benefits going into specific to this situation. There are no benefits going into 2024. So, it’s a — it will be a clean break.
Joanna Gajuk: Great. Thank you for that. And I guess, it’s somewhat related, because you mentioned by the ’24, it’s more of a normalized year, you don’t have like any major headwinds or tailwinds like you had in ’23, because, you exited business, then there were some therapies going away, but then you had this benefit from procurement, but ’24 maybe not. But I guess, there are couple of things that gets going around in the market. So like, there’s a biosimilar, I guess, for one of the infusion drug to Tysabri, coming to the market. So, I guess, how meaningful this could be or maybe that’s just a wash, because maybe there’s new therapies coming in. And I guess, Entyvio or [indiscernible] there’s — those — the makers of those drugs are working on subcutaneous formulations, maybe those are not coming ’24 maybe later.
But I guess as it relates to subcutaneous, kind of what do you expect the launches to actually happen and how would this impact your business? And to the point of — last point you were making around sweets and using those for injectables, is this something that you would have the Entyvio and [indiscernible] focus on both subcutaneous formulations being utilized in those locations? Thank you.
Mike Shapiro: Joanna, look, the one thing that we try to underscore as we engage with investors is, this is a very dynamic marketplace. It is not a static portfolio of therapies. And if you look at what we will infuse and inject into our patients in 2024, it’s markedly different than it was five years ago and it’s probably markedly different than what it will be five years from now. Our business development team — again, we have very direct lines into manufacturers. Nothing comes to market, no new administration method, no filing is hitting that is of a major surprise to us. And so as we look, whether it’s two months or 20 months out, we’re constantly trying to anticipate the dynamics in the marketplace. And so a lot of the manufacturers you talked, whose products you quoted, we have regular dialogues with them.
And we fully anticipate and have incorporated into our guidance therapies that will go subcutaneous or that will eventually have biosimilar entrants. And so that’s something that we stay well ahead of. When something — and again, just to remind, just when something goes subcutaneous, to John’s point, you need to read the labels, because sometimes something goes subcutaneous, it still requires healthcare professional oversight. And so — and even if it doesn’t require an HCP oversight that still remains within our clinical model, admittedly maybe with some different economics. And so all of those are developments that we’re constantly anticipating and incorporating into our commercial and operational strategies.
Joanna Gajuk: Thank you. If I may, last follow-up, I guess, on the commentary around very strong cash flow you still expect for ’24, obviously, there’s a year-over-year headwind of the termination fee that you got in ’23 that’s not going to repeat. But when it comes to acquisitions, any latest updates in terms of things that will be of interest? How far away are you willing to veer off of the core home infusion business? Any considerations for maybe expanding the drugs that you deliver, say, I mean, we talk about the injectables, but maybe more of the oncology track. So, any color of things kind of you’re looking at would be good to hear?
Mike Shapiro: Yes, Joanna. Look, I mean, we’re constantly focused on how do we grow. And we think that driving top-line and bottom-line growth is a surefire way to create value for our shareholders, whether it’s organic and utilizing our suites and infrastructure to add therapies to the bag, so to speak, or deploying capital through an M&A strategy. And I think — look, I think we’ve tried to alleviate concerns and reinforce our strategy on the corporate development front, which is to say, look, simply by generating more cash that doesn’t lower the bar. And John has preached that things have to be both of strategic and economic value that we can articulate to our shareholders. We’re very active on that front. We’re going to be very, very disciplined.
There’s a lot that we could do that’s strategic, that doesn’t represent an economic proposition and vice versa. And so we see a number of opportunities. I think, frankly, without laying out our playbook, we’re going to be disciplined and patient. The great thing is the base business we expect based on our guidance to perform very well this year. And so there isn’t the anxiety or pressure to do a deal just for the sake of doing a deal. And given our capital structure, I think we’re in a very advantageous position. And as John also highlighted, we also have the pressure valve of a share repurchase authorization. That’s another channel, through which we can deploy capital for our shareholders.
Joanna Gajuk: Thank you. Thanks for the questions.
John Rademacher: Thank you, Joanna.
Mike Shapiro: Thank you, Joanna.
Operator: Thank you. One moment for our next question. Our next question comes from Jamie Perse with Goldman Sachs. Your line is now open.
Jamie Perse: Hey, thanks. Good morning. John, you rattled off a number of therapies that are driving chronic growth at the moment. Can you spend a little more time on a few of those, the faster growing or larger categories? And where you think they are in their own life cycle? What visibility that gives you for chronic growth over the next couple of years? And just your sense of innovation upstream with biopharma for infusible drugs.
John Rademacher: Yes. So, in prepared remarks, I called out some of the products that we had launched. We had talked about VYJUVEK in previous earnings calls [indiscernible] as well as Cabenuva. I wouldn’t say these are outsized growth proportion on it. We feel privileged to have the partnerships that we do with an organization like Crystal and helping to be a channel partner to serve their patients or patients that require their gene therapy. Across the entire fleet on the chronic side, again, we continue to have a very diverse and a broad portfolio of products there. And as Mike just called out, they don’t move in tandem. We have things that are moving up. We have things that are moving down. It’s a dynamic environment there.
What we really appreciate and what we continue to hear and work with the biopharma partners is around the platform that we’re able to provide. That high-quality clinical knowledge and know-how, the logistics and the national platform in which we can serve patients and that ability now to have an expanded capability set to not only serve patients in the home, but in one of the infusion suites, all puts us in a really strong position to continue to work with biopharma to be a channel partner and to be able to continue to expand our list of limited distribution drugs or expand the list of products that we have within our portfolio. So, the focus of our business development team is around those relationships of continuing to focus around maximizing the value of our platform.
And we’ll continue to look for those opportunities with new and emerging products. As the second part of your question, we’re actively managing and monitoring what is that pipeline of new products. What of those products have the characteristics that fit well within our platform, and are active in conversations with those biopharma partners around the role that we can play in helping to support the launch of those products, the support of existing products and the ability to serve the patients in one of the settings that our clinical team is well equipped to serve.
Jamie Perse: Okay, great. And then, Mike, I have one follow-up on the procurement benefits. I know you guys were hesitant to talk about this two months while you were in the midst of getting those benefits. But at this point, are you able to say if the benefits came from a branded drug or a biosimilar? And on a question, I know you guys have been asked many times over the years, just the impact on gross margin from biosimilar or generic events. Does this experience over the last six months give us a signal on how those events might impact your profitability?
Mike Shapiro: Yes, Jamie. Look, I mean, obviously, for competitive purposes, we’re going to be reluctant. All I’ll say is it wasn’t one drug; it wasn’t one code. It was a little bit of a confluence of a limited number of therapies that have gone away. And again, I always say, we always have some puts and cases. There’s also some areas last year where we had some procurement headwinds on some of the nutritional therapies that we support. And the team tries to do their best to mitigate. Look — and on the biosimilar front, again, no two biosimilar events are exactly the same. It typically isn’t a bad development from our perspective. We provide therapy and we bill payers based on an ASP AWP or WAC spread. So as a category becomes more competitive, typically, there’s ASP and AWP pressure over time, it’s not overnight, which typically has headwind on our revenue.
However, when you have multiple manufacturers and providers that typically tips the scale from a procurement leverage and we can typically drive a gross margin rate expansion. How that manifests in dollars, all I’ll say is, look, it’s very much more of a revenue event for us than it is a gross profit dollar event. And from a supply chain risk management, it typically de-risks our supply chain. And given our direct relationships with virtually all of the manufacturers, we can be very responsive as payers want to actively manage formularies and can pretty much turn on a dime.
Jamie Perse: Okay, great. I’ll leave it here. Thank you.
Mike Shapiro: Thanks, Jamie.
John Rademacher: Thanks, Jamie.
Operator: Thank you. One moment for our next question. Our next question comes from Michael Petusky with Barrington Research. Your line is now open.
Michael Petusky: Good morning. Hey, I was worried that you were maybe not tired of answering procurement question for me. Let me ask one more real quick. The 33% to 35%, obviously, you guys have been talking about this issue throughout. It feels like most of ’23. But you did say, I think, Mike, that typically you do get sort of in a more normalized year some bit of tailwind because of your scale and contracts and all the rest of it. Can you just talk about what historically, I mean, that number has been in terms of — I mean, is it like $5 million, $10 million? What’s the typical procurement tailwind for you guys in a more normalized year?
