Perrigo Company (PRGO) recently announced that it has launched betamethasone valerate foam 0.12%. It is the generic equivalent of Stiefel Laboratories’ Luxiq foam. Stiefel is a GlaxoSmithKline (GSK) company.
We note that the product was approved by the US Food and Drug Administration (FDA) in Nov 2012 for the relief of corticosteroid-responsive skin conditions of the scalp or scalp psoriasis. The offering had annual branded sales of about $40 million.
We note that betamethasone valerate was developed by Perrigo in partnership with Cobrek Pharmaceuticals, Inc. Cobrek Pharma was acquired by Perrigo in Dec 2012. The deal is expected to boost its adjusted earnings in fiscal 2013 by 4 cents per share. Perrigo’s fiscal year ends on the last Saturday of June every year.
We note that Perrigo is entitled to the180-day exclusivity of generic Luxiq foam as it was the first-to-file. Following the acquisition of Cobrek Pharma, Perrigo is eligible to receive the entire profit from net sales of the generic equivalent of Luxiq foam.
The acquisition of Cobrek Pharma has strengthened Perrigo’s position in the topical foam-based generic prescription pharmaceuticals space. We note that Perrigo has been quite active on the acquisition front lately. In 2012, Perrigo acquired the entire assets of privately-held Sergeant's Pet Care Products, Inc. Through this acquisition, Perrigo aims to diversify its business into the lucrative pet care space.
Currently, we have a long-term Neutral recommendation on Perrigo, an S&P 500 stock. The stock carries a Zacks Rank #3 (Hold) in the short run. S&P 500 companies that currently look better-positioned include Mylan Inc. (MYL) and Eli Lilly and Company (LLY). Both Zacks Rank #2 (Buy) stocks are expected to perform well in the coming quarters.
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