Perrigo Company's (NYSE:PRGO; TASE:PRGO) bad news is good news for Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA). Perrigo announced Friday that it did not expect marketing approval from the US Food and Drug Administration (FDA) for its generic version of the ProAir inhaler this year. The inhaler is one of Teva's leading branded products with sales of $130 million in the first quarter of 2018, 7% more than in the first quarter of 2017.
Perrigo reported that the FDA had notified it by telephone on Thursday that the company would receive a complete response letter (CRL) on the matter. This means a delay in obtaining approval and postponement of the launch scheduled for the fourth quarter of this year, according to Perrigo's previous guidance. Perrigo said that it would consider the FDA's comments and what to do about them after receiving the CRL.
As a result, Perrigo's profit guidance for the year, which the company confirmed only a few days ago when it reported its first quarter results, are being downwardly revised. Perrigo predicted that its generic version of ProAir would contribute $0.09 to its yearly profit per share, which it believed would be $5.05-5.45. Perrigo's share price was down 4.1% in Wall Street trading, while Teva's share price rose 1.8%.
Under the compromise agreement signed by Teva and Perrigo in 2014, Perrigo was entitled to launch its generic version of the inhaler immediately after receiving FDA approval, with no restriction on the quantity starting in June 2018.
Perrigo, currently managed by CEO Uwe Rohrhoff, has a market cap of $10.7 billion. Teva, managed by CEO Kare Schultz, has a current market cap of $19.7 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on May 13, 2018
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