Perrigo Company (PRGO) is constantly looking for acquisitions or licensing deals to drive growth. Perrigo acquired Elan Corporation late last year in a bid to boost its revenue stream and save taxes. Following the acquisition, Perrigo shifted its headquarters to Ireland to cut its tax bill. Perrigo also receives significant royalties on multiple sclerosis drug Tysabri from Biogen Idec (BIIB) following the Elan acquisition.
Earlier this week, Perrigo transferred some of the early stage assets gained from the above acquisition to Imago Pharmaceuticals. In exchange of the transfer, Perrigo will receive an upfront payment, milestone payments in addition to royalties in the event of any offering from the transferred portfolio managing to enter the market. Further financial details of the deal were not disclosed.
Perrigo said that the assets transferred included intellectual property, candidates in preclinical development and a 500,000 compound, CNS-focused, diversity-driven, small-molecule library. We believe that this out licensing deal will enable Perrigo to develop products based on its areas of strength/expertise.
Perrigo, which fared impressively in fiscal 2014 (ended Jun 28, 2014), recording higher-than-expected revenues and earnings, hopes to perform well in fiscal 2015 as well. The company expects adjusted earnings per share in the range of $7.20 to $7.50 in fiscal 2015, up 13% to 17% over fiscal 2014 levels. The Zacks Consensus Estimate for fiscal 2015 is $7.40, well within the company’s guidance range. We expect Perrigo to achieve the guidance.
Investors interested in the medical sector may consider stocks like Abaxis (ABAX) and Haemonetics Corporation (HAE).
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