Good News for Perrigo Generics

Perrigo Company (PRGO - Analyst Report) recently received some good news when the US Food and Drug Administration (FDA) cleared its generic version of Clobex shampoo. Perrigo intends to launch the drug in the US immediately.

Perrigo’s generic version has been approved for treating patients suffering from moderate to severe scalp psoriasis. According to data released by Wolters Kluwer Health, total annual sales of the drug (branded and its generic equivalents) were approximately $57 million.

We note that Perrigo has received quite a few approvals on the generic front this year. In June, the company gained FDA approval for its abbreviated new drug application (ANDA) for its generic version of Duac Gel. Duac Gel, developed by Stiefel, a GlaxoSmithKline (GSK - Analyst Report) company, is a clindamycin phosphate and benzoyl peroxide 1.2%/5% topical gel for the treatment of inflammatory acne (pimples). Also in June 2012, Perrigo received FDA approval for its generic version of hyperphosphatemia drug, Phoslo Gelcaps.

The FDA also cleared Perrigo’s generic version of KV Pharmaceutical Company’s vaginal cream Gynazole. Moreover, the FDA gave final approval to Perrigo to market its generic version of Novartis’ (NVS - Snapshot Report) heartburn drug, Prevacid. Perrigo launched the drug in the US following the receipt of final approval from the FDA.

We note that the availability of generic equivalents will be easy on the pockets of patients as generic drugs are much cheaper than their branded counterparts.

Our Take

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 strong pipeline.