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Perrigo’s Diversified Prescription Pharmaceuticals Franchise

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Oct. 7 2015, Updated 12:07 p.m. ET

Diversified prescription pharmaceuticals franchise

Perrigo (PRGO) has a significant presence in the generic and specialty prescription pharmaceutical (or Rx Pharmaceuticals) drugs segment in the United States and the United Kingdom. In 2015, the segment accounted for about 22% of the company’s total revenues.

Perrigo’s Rx Pharmaceutical portfolio comprises topical dosage forms, injectables, hormones, women’s health products, oral solid dosage forms, and oral liquid formulations.

The The above diagram shows that that Perrigo does not excessively depend on any single product in its Rx Pharmaceuticals business. Additionally, the brand value of this drug portfolio is greater than $3.5 billion.

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Business Strategy

Perrigo manufactures the majority of its Rx Pharmaceutical products in the United States, Israel, and the United Kingdom.  The company also has production-related expertise in controlled substances and hormonal products.

Perrigo offers over-the-counter (or OTC) products, which are marketed under its name. Termed as ORx (over-the-counter-by-prescription) products, these drugs are reimbursed by healthcare plans and US Medicare and Medicaid programs if a physician refers them to a patient.

The company currently markets 800 generic, prescription, and ORx products. In fiscal 2015, the company also acquired a women’s health–related product portfolio from Lumara Health to strengthen its Rx offerings.

Perrigo is currently targeting its development efforts in areas such as oral liquids, metered dose inhalers, injectables, and transdermal products. In fiscal 2015, the U.S. Food and Drug Administration (or FDA) approved 24 Rx applications belonging to the company, and ten Rx applications are in the review process.

Rx Pharmaceuticals markets its products to major wholesalers such as AmerisourceBergen, Cardinal Health, and McKesson as well as to national and regional retailers. Perrigo faces significant competition from generic drug manufacturers such as Allergan (ACT), Teva Pharmaceutical (TEVA), and Mylan (MYL).

You can get exposure to Perrigo’s Rx Pharmaceutical business while avoiding excessive risk by investing in the Health Care Select Sector SPDR ETF (XLV). Perrigo accounts for 0.90% of XLV’s total holdings.

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