The generic (Rx Pharmaceuticals) segment at Perrigo Company plc (NYSE:PRGO) has been performing well over the last few quarters. The generic unit has seen quite a few approvals over the past few months. Segmental sales climbed 25% to $204 million in the first quarter of fiscal 2014 (ended Sep 28, 2013). Sales of new products boosted segmental revenues by $15 million. The segment is expected to continue performing well. For fiscal 2014, revenues from the segment are expected to grow in the range of 25%–29% over fiscal 2013 levels
The generic unit at Perrigo was further strengthened earlier in the week with the U.S. Food and Drug Administration (:FDA) granting final approval to Perrigo’s abbreviated new drug application (ANDA) to sell its generic version of Valeant Pharmaceuticals International, Inc.’s (NYSE:VRX) Vanos cream (0.1%). The cream is approved for providing relief from inflammatory and pruritic manifestations of corticosteroid responsive dermatoses in patients aged 12 years and above.
With Perrigo being the first to file, the company will enjoy 180 days of marketing exclusivity. The estimated annual sale of the branded version is approximately $107 million.
The launch of the new product is in line with Perrigo’s focus on adding new products to broaden its product portfolio. Perrigo expects to launch more than 75 new products in fiscal 2014 contributing approximately $190 million to revenues.
Though impressed by the news on Vanos cream, we believe investor focus will remain on the performance of the newly formed Ireland based Perrigo Company plc, formed following the Dec 2013 merger of Allegan, Mich. based Perrigo Company and Elan Corporation. Following the completion of the $8.6 billion deal, Perrigo’s revenue stream has been boosted as it is now eligible to receive significant royalties on multiple sclerosis drug Tysabri from Biogen Idec Inc. (NASD:BIIB).
Perrigo currently carries a Zacks Rank #3 (Hold). Advaxis, Inc. (NASD:ADXS) is an example of a better–ranked stock with a Zacks Rank #2 (Buy).