Pharmx and sigma sign strategic partnership

What it means for ASX PHX investors

What happens when a billion-dollar market cap company announces a deal with a microcap?

Yesterday, a bit out of the blue, Pharmx announced a strategic partnership with Sigma.

Sigma (Ticker: SIG) is one of the big pharmacy wholesalers until it merged last year with Chemist Warehouse, becoming the biggest pharmacy wholesaler/retailer in Australia and New Zealand.

Let’s put both companies side by side:

In other words, Goliath has agreed to back David.

In my original deep dive, the following schematic showed the business segments. I updated it in view of this transaction:

Before the merger with Chemist Warehouse, Sigma already operated on both sides of the model, with 600 pharmacies on the left and as a wholesaler on the right.

The merger with Chemist Warehouse creates Australia's largest pharmacy retailer, with 1200 pharmacies.

After the partnership, Sigma now owns 10% of Pharmx.

So let’s dive in and see if this deal is good or bad for the company. ⬇️