) soared to a 52-week high of $120.94 during the course of the
trading session on Apr 2, 2013 buoyed by a series of positive
developments. The closing price of the company on that day was
$37.94, representing a solid 1-year return of 14.2% and an
impressive year-to-date return of 12.3%.
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PERRIGO COMPANY (PRGO): Free Stock Analysis
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Moreover, this Zacks Rank #2 (Buy) company has delivered positive
earnings surprises in each of the last four quarters with an
average beat of 6.09%. The long-term expected earnings growth
rate for this stock is 13.8%.
Velcera Deal - A Smart Move
On Apr 1, 2013 Perrigo announced that it has completed the
acquisition of companion animal health company, Velcera, Inc. for
approximately $160 million in cash.
The deal, which has strengthened Perrigo's position in the
over-the-counter (OTC) retail pet healthcare market, looks good
to us. The acquisition adds the erstwhile Velcera's PetArmor
franchise of Flea and Tick therapies to Perrigo's product
Perrigo has lately been quite active on the acquisition front. In
Feb 2013, Perrigo acquired UK-based privately held pharmaceutical
company, Rosemont Pharmaceuticals Ltd. By acquiring Rosemont
Pharma, Perrigo aims to strengthen its position in the UK oral
liquid formulations space.
In Dec 2012, Perrigo acquired privately held Cobrek
Pharmaceuticals, Inc. for approximately $45 million in cash. In
Jan 2012, Perrigo inked a deal to acquire the assets of
Georgia-based private company CanAm Care, thereby expanding its
presence in the diabetes care market. In Jul 2011, Perrigo
acquired Paddock Labs to expand its generic Rx business. We are
impressed by Perrigo's growth-by-acquisition strategy.
Launch of Mucinex- Another Positive for Perrigo
In Mar 2013, Perrigo commenced the shipping of its generic
version of Adams Respiratory Therapeutics' expectorant Mucinex
(600mg extended-release tablets). Adams Respiratory Therapeutics
is a subsidiary of Reckitt Benckiser Group.
The launch of the store brand version of Mucinex further
strengthens its dominant position in the store brand OTC drug
market. Perrigo boasts partnerships with retailers, pharmacies
and mass merchandisers for which it manages a wide range of
activities including regulatory approvals, customized branding
and packaging, and in-store advertising.
We are also impressed by Perrigo's strong pipeline. Perrigo has a
strong pipeline and expects to launch more than 60 new products
in fiscal 2013 contributing approximately $150 million to
revenues. The company's fiscal year ends on the last Saturday of
June every year.
Other Stocks to Consider
Apart from Perrigo, which develops, manufactures and distributes
OTC and generic prescription pharmaceuticals,
) is another Zacks Rank #2 stock in the generic space. Meanwhile,
stocks such as
Osiris Therapeutics, Inc.
) carry a Zacks Rank #1 (Strong Buy) and are worth