Zacks_Analysts' Blog : Perrigo Files for Generic Astepro - Analyst Blog

Perrigo Company (PRGO) recently announced that it has filed an application to manufacture a generic version of Meda Pharmaceuticals’ Astepro nasal spray to treat nasal symptoms caused by seasonal allergies or environmental irritants. Meda has filed a suit accusing that the abbreviated new drug application (ANDA) infringes its patent for the nasal spray. Perrigo’s partner for the generic is Impax Laboratories, Inc (IPXL) on an equal cost and profit sharing basis.

Earlier this month, Perrigo won a summary judgment in the patent case involving the generic version of Adams Respiratory Therapeutics’ drug Mucinex.  Adams Respiratory Therapeutics is a subsidiary of Reckitt Benckiser Group. Perrigo had received approval for its generic version of Mucinex in December 2011. It plans to launch the drug soon. Mucinex indicated to relieve chest congestion has been identified as one of the important product launches for the company in fiscal 2012.

Our Recommendation

We currently have a Neutral recommendation on Perrigo. The stock carries a Zacks #3 Rank (short-term “Hold” rating).

We believe Perrigo has a sustainable and diversified product portfolio. Besides, Perrigo’s strong position in the brand over-the-counter (OTC) pharmaceutical market and growing generics and active pharmaceuticals ingredient (API) businesses can help it deliver solid top- and bottom-line growth in the coming years. Perrigo also has a very strong and impressive pipeline which could drive growth in fiscal 2012 and beyond. We are, however, concerned about the competitive pressures faced by the Consumer HealthCare (CHC) segment which accounts for a majority of the company’s revenues.