UnitedHealth Group's (UNH) - Get Report purchase of pharmacy benefits manager Catamaran is "bearing large fruits," Sterne Agee CRT analyst Brian Wright wrote in a note Tuesday, citing PBM contracts awarded to UnitedHealth's OptumRx last week representing more than $10 billion in combined new business.

Last week, the California Public Employees' Retirement System said it has picked OptumRx as its new PBM. The five-year contract is worth an estimated $4.9 billion. The Employees Retirement System of Texas also tapped OptumRx for a six-year contract with a total value estimated to top $9 billion, including the Employer Group Waiver Plans Medicare component, Wright said, who has a buy rating on UnitedHealth's stock.

The contract awards demonstrate that UnitedHealth "has achieved sufficient scale in the PBM business to be a highly effective competitor for external PBM contracts," he wrote.

The two clients, he wrote, represent two of the largest and most sophisticated purchasers of health benefits in the country. "As such, we expect this to be just the beginning of a significant increase in OptumRx's share of the PBM market."

UnitedHealth completed its $12.8 billion acquisition of Catamaran in July 2015 and combined it with its OptumRx business.

UnitedHealth shares on Wednesday climbed 83 cents, or 0.63%, to $133.42.

In April, Minnetonka, Minn.-based UnitedHealth reported first-quarter earnings per share of $1.81, exceeding analysts' estimates of $1.72. Revenue during the quarter ended March 31 came in at about $44.53 billion, north of analysts' expectations of $44.34 billion. 

Optum had revenue of $19.7 billion during the first quarter, up 54% year-over-year, and earnings from operations of $1.1 billion, up 49% from the year-ago period. OptumRx, the pharmacy care services business of Optum, generated $14.3 billion of revenue, representing a 72% rise year-over-year fueled by acquisitions and organic growth.

OptumRx acquired AxelaCare Health Solutions, a provider of home infusion solutions, in November.