Perrigo Co.

Perrigo Co. (PRGO - Analyst Report) recently announced that it has received final approval from the FDA to sell a generic version of McNeil Consumer Healthcare's Zyrtec allergy medicine over the counter. In early December, the Zacks #1 Rank (strong buy) company stated that the FDA granted final approval to its partner Dexcel Pharma Technologies Ltd. for over-the-counter generic heartburn drug tablets. The company’s guidance and Wall Street estimates advanced higher on the news of the heartburn drug, and PRGO shares started to reach 52-week highs with the current share price trading slightly below a 52-week high. Perrigo’s ROE of 14% sits above the industry average of 9%.

Full Analysis

Perrigo Company is a leading global healthcare supplier that develops, manufactures and distributes over-the-counter (OTC) and prescription pharmaceuticals, nutritional products, active pharmaceutical ingredients (API) and consumer products. The Company is the world's largest manufacturer of OTC pharmaceutical products for the store brand market. The Company's primary markets and locations of manufacturing facilities are the United States, Israel, Mexico and the United Kingdom.

The company recently announced that it has received final approval from the U.S. Food and Drug Administration for its Abbreviated New Drug Application (ANDA) for over-the-counter (OTC) Cetirizine Hydrochloride Tablets, 5 and 10 mg. Perrigo noted that this product will be marketed under store brand labels and is comparable to McNeil Consumer Healthcare's Cetirizine Hydrochloride Tablets, 5 and 10 mg, which will be marketed as Zyrtec® Tablets, indicated for allergy and hives relief.

In early December, the Zacks #1 Rank (strong buy) company stated that the U.S. Food & Drug Administration (FDA) has granted final approval to Dexcel Pharma Technologies, Ltd. for 20 mg Omeprazole delayed-release tablets. As the exclusive marketer and distributor of this product for the store brand over-the-counter (OTC) market in the United States, Perrigo expects to begin shipping its product during the first quarter of calendar year 2008, with full year annual sales to be in the range of $150 - $200 million.

PRGO noted that due to the Omeprazole launch, full year earnings for fiscal year 2008 are now expected to be in the range of $1.32 to $1.47 per share. Wall Street lifted forecasts to match the new outlook. For the year ending June of 2008, all three covering analysts increased estimates from last month’s $1.24 per share to $1.43. Three months ago, the consensus estimate was $1.11.

The three analysts also upped projections for the following year to $1.67 per share from last month’s $1.46. The most accurate earnings expectation for the year ending in June of 2009 is currently at $1.79. The company’s earnings per share expected to grow by 21% over the next 3 -5 years, while the industry average stands at 14%.

Perrigo’s share price has been advancing quite nicely after the Omeprazole launch and the increased earnings forecast, hitting 52-week highs in late December. The company’s shares are currently trading just slightly below a 52-week high.

The dividend yield for PRGO is at about 0.6, which is better than the industry average. The company’s ROE of 14% is above the industry average of 9%.

Read the full analyst report on PRGO