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Nearly three months after its much-publicized launch, San-Francisco, California-based online pharmacy PlanetRX.com, announced Monday that it was closing a $50 million (US$) round of capital investment.
The money comes from a wide-ranging variety of sources. Among the investors was News Corporation, the Rupert Murdoch-owned media conglomerate which will soon launch the Health Network channel on its FOX network, E*Trade, the online trading company, Tenet Healthcare Corporation, HealthSouth Corporation and a number of investment funds and firms.
"The Internet is exploding in the area of health-related information and products," said Fox Entertainment Group COO, Peter Chernin. "We recognize PlanetRX as a leading company in the online healthcare and pharmacy space. This relationship compliments our online health strategy."
PlanetRX said it would spend some of the money on rolling out a major branding and marketing campaign on television and radio. The company also said it intends to continue to build its infrastructure to support expansion, concentrating on its distribution center and pharmacy.
Online Drugstore Competition Heats Up
PlanetRX's announcement comes as yet another online pharmacy joins the fray. Rx.com, an Austin, Texas-based, privately-held company announced Monday that it was launching its new site, making it at least the fourth online pharmacy to come out in recent months.
Soma.com and drugstore.com, both based on the West Coast, unveiled earlier than PlanetRX, which came online in March.
The bunched-up timing has leveled the playing field for the time being, though the feeling is that Soma.com has been hurt by its lack of brand recognition and marketing muscle.
Drugstore.com has its 46% partner Amazon.com backing it, of course, while PlanetRX is well-funded -- as today's announcement indicates -- and is strategically branded. The company signed marketing deals with Yahoo! and AOL, the latter a three-year, $15 million arrangement.
No word yet on PlanetRx's sales results to date. At the time of its launch back in March, it had reportedly reached agreements with insurance benefit managers that serve only 30% of those insured, though the company is licensed to dispense prescriptions in all 50 states. Analysts say that figure will have to increase in order for PlanetRX to stay competitive.
