) recently received some good news when the U.S. Food and Drug
Administration (FDA) cleared its generic version of
) heart burn drug Prevacid. Approval was granted to treat patients
suffering from frequent heartburn (two or more days in a week).
Perrigo launched the drug in the U.S. following the
receipt of final approval from the U.S. regulatory body of
the abbreviated new drug application (ANDA) filed by Perrigo
seeking approval to market its generic equivalent of
Prevacid. Perrigo further stated that Prevacid's
over-the-counter sales in 2011 came in at approximately $220
We note that the approval of the generic version of Prevacid
would be easy on the pockets of U.S. patients as generic drugs are
much cheaper than their branded counterparts. By gaining the FDA
approval of its generic equivalent of Prevacid, Perrigo has further
strengthened its position as a dominant player in the store brand
over-the-counter (OTC) market.
Perrigo's broad line of store brand pharmaceutical products has
the same active ingredients and comparable quality and efficacy as
the national brands. This has helped the company become a dominant
player in the store brand OTC drug market. Perrigo boasts of
partnerships with retailers, pharmacies and mass merchandisers for
whom it manages a broad range of activities including regulatory
approvals, customized branding and packaging and in-store
We currently have a Neutral recommendation on Perrigo. The stock
carries a Zacks #3 Rank (short-term Hold rating).
We believe Perrigo has a sustainable and diversified product
portfolio. The company's strong position in the brand OTC
pharmaceutical market and growing generics and active
pharmaceuticals ingredient (API) businesses are expected to drive
growth in the coming quarters. We are also impressed by Perrigo's
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