Why Perrigo Company plc Ordinary Shares (NYSE: PRGO) stock is rising

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Perrigo Company plc Ordinary Shares (NYSE: PRGO) rose 14% in the last five days (as of 12:49PM EDT; Source: Google finance). Meanwhile, the Food and Drug Administration has granted Perrigo the green light to sell it’s over the counter version of AstraZeneca plc. (ADR) Nexium 24hr capsules. The approval as per the executive vice president, Jeff Needham, has affirmed the company’s tremendous capabilities in the store brand OTC platform. AstraZeneca Nexium capsules had generated sales in excess of $300 million last year. PRGO is currently finalizing launch plans as it moves to flex its muscles in the space.

Further, the launch of the Nexium generic capsules is expected go a long way in strengthening PRGO’s product offerings in the over the counter market. In 2015, the company had acquired Omega Pharma a transaction that provided it with access to well established OTC bands such as Niquitin and Coldrex. The same year the company had acquired Scarway, that provided it with an entry into the branded OTC business in the U.S.

Moreover, in addition to gaining regulatory approval for the OTC equivalent of Nexium, PRGO has also reached a settlement with AstraZeneca in relation to patent litigation for its generic drug. The settlement had allowed the company to launch its generic capsules in September.

Additionally, Perrigo Company is in the process of offloading its active ingredients business to investment firm SK Capital LP for $110 million. The unit develops generic APIs and the transaction is poised to close in the fourth quarter. PRGO has also divested royalty stream for its multiple sclerosis drugs, Tysabri for $2.85 billion. The selloff comes on the heels of activist investor, Starboard, urging the company to divest a number of non-core assets.

On September 7th, 2017 Oppenheimer had started covering Perrigo Company with a rating of “Outperform”. On August 11th, 2017 the stock rating was rated “Neutral” by Goldman Sachs a boost from the previous “Sell” rating.

In addition, Perrigo Company had declared a dividend that was paid on June 13th, 2017. The dividend was $0.160 per share for the quarter or $0.64 on an annualized basis.

 

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