Perrigo Company (PRGO) is constantly entering into acquisition and collaboration agreements to expand its business. In keeping with this strategy, Perrigo announced two more agreements last week.
Perrigo announced that it has acquired a basket of value-brand over-the-counter (OTC) products from Aspen Global Inc. for $51 million in cash. These value-brand OTC products are sold in Australia and New Zealand and are expected to generate around $20 million annually.
These products include Aspen’s Herron range of analgesics, vitamins and supplements and are sold through a mass retail channel. The deal is expected to help Perrigo to expand its Consumer Healthcare portfolio. The company’s Consumer Healthcare segment recorded revenues of $536 million in the second-quarter fiscal 2014 (ended Dec 28, 2013).
In a separate announcement Perrigo announced that it has entered into multiple agreements with Transition Therapeutics Inc. (TTHI). As per these agreements, Transition Therapeutics will be responsible for all development activities and costs associated with Perrigo’s ELND005.
Transition Therapeutics will advance the clinical development of ELND005 in indications like Alzheimer's disease, bipolar disorder and Down syndrome. Perrigo is expected to make a $15 million investment for around 2.3 million shares of Transition Therapeutics. Perrigo is eligible to receive royalties and milestone payments in the event of ELND005 being commercialized. We note that ELND005 was added to Perrigo’s portfolio after it acquired Elan last year.
Perrigo currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks include Stryker Corporation (SYK) and Covidien (COV). Both stocks carry a Zacks Rank #2 (Buy).
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