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Good News for Perrigo

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Perrigo Company’s (PRGO - Free Report) dominant position in the store brand over-the counter (OTC) drug market was further strengthened when it gained final approval from the U.S. Food and Drug Administration (FDA) to market its store brand version of Johnson & Johnson’s (JNJ - Free Report) Zyrtec allergy syrup (1mg/ml) for treating children aged two years and above. Perrigo intends to commence shipments of the offering, which is bubble gum flavored, during the upcoming cough/cold/flu season.

The children’s allergic Zyrtec syrup is part of the overall Zyrtec brand. Perrigo stated in its press release that the estimated annual sales of the drug are approximately $380 million. We remind investors that in Mar 2013, Perrigo made an important launch targeting the store brand market. The company launched its store brand version of an expectorant, Mucinex.
Another important launch at Perrigo targeted at the store brand market this year, was that of the OTC nicotine polacrilex mini lozenge, 2 mg (mint flavor) and 4 mg (mint flavor). We note that the product was approved by the FDA in Oct 2012 for reducing withdrawal symptoms like nicotine craving, associated with quitting smoking.

This is the first marketed mini lozenge product targeting the store brand market. The mint flavored mini lozenge can be compared to GlaxoSmithKline's (GSK - Free Report) Nicorette mini lozenge.

We note that 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 businesses are expected to drive growth in the coming quarters. We are also impressed by Perrigo's strong pipeline.

Perrigo currently carries a Zacks Rank #3 (Hold). Right now, Gilead Sciences Inc. (GILD - Free Report) looks attractive, with a Zacks Rank #1 (Strong Buy).

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