Amazon’s acquisition of online pharmacy PillPack is a “shot across the bow” for retail pharmacy chains, said Anthony Chukumba, managing director of Loop Capital markets.
On Wednesday, a day before Amazon announced the deal, Loop Capital raised its price target for Amazon to $1,900 from $1,800. Chukumba told CNBC's Power Lunch on Thursday that PillPack sets Amazon up for rapid expansion in the pharmacy market.
“Amazon is able to snap its fingers, and now has licenses to distribute drugs in all 50 U.S. states," he said. "A lot of people thought it was going to take years to do.”
Although PillPack is relatively small, bringing in about $100 million in revenue last year, its relationships, licenses and technology are valuable, Chukumba said. Walmart was also bidding for the start-up, but Amazon came in with a cash offer of .
Large pharmacy companies tumbled on the news. Walgreens fell more than 9 percent, CVS dropped 6 percent and Rite Aid plunged 11 percent.