Perrigo Seeks Generic Approval

Perrigo Company (PRGO - Analyst Report) recently confirmed that it has filed an abbreviated new drug application (ANDA) with the US Food and Drug Administration (FDA), seeking approval for its generic version of Teva Pharmaceutical Industries Limited’s (TEVA - Analyst Report) ProAir HFA inhaler. The application included contributions from Perrigo’s partner on the project, the privately-held Catalent Pharma.

ProAir is marketed for treating and preventing bronchospasm symptoms in patients aged 4 years and above. As per data released by Wolters Kluwer Health, annual sales of the inhaler were approximately $1.07 billion.

We note that Teva has already challenged Perrigo’s application, thereby initiating the litigation process under the Hatch-Waxman Act. Perrigo stated in its press release that it is the first company to seek approval for the generic version of the drug and is therefore entitled to 180 days of generic exclusivity.

We note that the generic segment at Perrigo (Rx Pharmaceuticals) performed exceptionally well in fiscal 2012 (ended June 30, 2012) with sales climbing 80% year over year to $274 million. The generic unit has seen quite a few approvals over the past few months including its generic versions of Clobex shampoo, inflammatory acne therapy Duac gel, hyperphosphatemia drug, Phoslo Gelcaps and vaginal cream Gynazole 1 for the local treatment of vulvovaginal candidiasis.

Our Recommendation

Earlier in the month, we downgraded Perrigo to Neutral from Outperform following the disappointing revenue numbers reported by the company in the fourth quarter of fiscal 2012.

Perrigo’s fourth quarter fiscal 2012 revenues of $832 million fell short of the Zacks Consensus Estimate of $854 million, primarily due to weakness in the Consumer HealthCare segment. The stock carries a Zacks #3 Rank (Hold rating) in the short run.