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The spate of acquisitions in the pharmaceutical industry continues with Perrigo Company (PRGO - Analyst Report) completing the purchase of the privately-held Cobrek Pharmaceuticals, Inc.  for approximately $45 million in cash. The transaction has been inked on a cash free and debt free basis.

We remind investors that Perrigo already owns 18.5% of Cobrek Pharma through a deal signed in 2008. In December 2012, Perrigo inked a definitive agreement to acquire the balance 81.5% stake in the privately-held entity.

Per the terms of the deal, Cobrek Pharma, whose primary source of income are the profit shares on offerings partnered with Perrigo, will forgo payments related to profit shares earned during Perrigo's fiscal second quarter 2013. We note that the company’s fiscal year ends on the last Saturday of June every year.

By acquiring the remaining stake in Cobrek Pharma, Perrigo aims to strengthen its position in the topical foam-based generic prescription pharmaceuticals space. The deal is expected to boost Perrigo’s adjusted earnings in fiscal 2013 by $0.04 per share.

We note that Perrigo also inked a deal with Cobrek Pharma in 2008 for developing the foam dosage versions of generic pharmaceutical offerings. The partnership has worked very well and is responsible for the development of two commercialized foam-based products. The products are the generic versions of Evoclin (clindamycin phosphate) foam 1% and Extina (ketoconazole) foam 2%.

Additionally, the deal has yielded two more foam-based products, which have been cleared by the Food and Drug Administration (FDA) but have not yet been launched. The products, expected to be launched in fiscal 2013, are Luxiq (betamethasone valerate) foam and Olux-E (clobetasol propionate) foam 0.05%.

We note that Perrigo has been quite active on the acquisition front lately. Earlier in 2012, Perrigo acquired the entire assets of privately-held Sergeant's Pet Care Products, Inc. Through this acquisition, Perrigo aimed to diversify its business into the lucrative pet care space.

Currently, we have a long-term Neutral recommendation on Perrigo, an S&P 500 stock. The stock carries a Zacks #3 Rank (Hold) in the short run. S&P 500 companies that currently look better-positioned include Mylan Inc. (MYL - Analyst Report). Mylan carries a Zacks #2 Rank (Buy).

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