) announced that is has inked a partnership deal with KanPak, in
which Golden State Foods, one of the largest diversified food
processors and distributors in the U.S., has a controlling
According to the deal, the Nutritionals unit of Perrigo will
manufacture store brand versions of nutritional drinks for adults
which are comparable to offerings under the Ensure product line.
KanPak, one of the leading suppliers of beverages and desserts,
utilizes its aseptic processing technology which leads to highly
effective beverage packaging, shipping and storage.
Furthermore, the deal permits Perrigo to supply retailers with
six store brand versions of the six nutritional drinks which are
currently marketed under the above product line. According to
data released by the Symphony IRI group, the market for adult
nutritional drinks is worth $900 million in terms of annual
branded sales for the last 12 months. Given the significant
commercial potential, we are positive on the deal and believe
that it is a step in the right direction which will help
Perrigo's nutritionals unit to grow further.
The nutritionals segment performed well in the second quarter
of fiscal 2014 (ended Dec 28, 2013) with sales climbing 15% to
$140 million. All the sub-groups of the segment witnessed growth
during the reported quarter.
We note that Perrigo is constantly entering into acquisition
and collaboration agreements to expand its business. Last month,
Perrigo acquired a bunch of value-brand over-the-counter (OTC)
products from Aspen Global Inc. These value-brand OTC products
are sold in Australia and New Zealand and are expected to
generate around $20 million annually.
Moreover, Perrigo entered into multiple agreements with
Transition Therapeutics Inc.
) last month. As per these agreements, Transition Therapeutics
will be responsible for all development activities and costs
associated with Perrigo's ELND005. We note that ELND005 was added
to Perrigo's portfolio after it acquired Elan last year.
Perrigo carries a Zacks Rank #3 (Hold). Some better-ranked
). Both stocks carry a Zacks Rank #2 (Buy).
PERRIGO CO PLC (PRGO): Free Stock Analysis
SURMODICS (SRDX): Free Stock Analysis Report
TRANSITN THERAP (TTHI): Get Free Report
MERIDIAN BIOSCI (VIVO): Free Stock Analysis
To read this article on Zacks.com click here.