Perrigo jumps after buying GSK heartburn drug rights

Perrigo CEO Murray Kessler Photo: Perrigo PR

Perrigo will obtain exclusive rights to the drug in the US OTC market.

The share price of pharmaceutical company Perrigo Company (NYSE:PRGO; TASE: PRGO) is up 5% today in trading on the Tel Aviv Stock Exchange, following a 7% rise in the last two days of trading last week in New York. On Thursday, Perrigo announced the signing of an agreement with GlaxoSmithKlineto acquire rights to over-the-counter (OTC) sales of Prevacid, a drug for treatment of frequent heartburn (twice a week or more). No details about the price in the deal were disclosed. Perrigo will obtain exclusive rights to market, sell, and distribute the drug in the US OTC market.

Perrigo says that the acquisition is part of its self-care strategy. CEO Murray Kessler is leading this strategy, which focuses mainly on the consumer market, where multiples are higher than in the pharma market. Perrigo notes that its acquisition of rights reinforces its status as the leader in the US OTC market, and in the gastroenterology category.

Kessler commented, "The acquisition of the product based on Prevacid24HR is another example of how complementary acquisitions can expand our self-care portfolio." He added that the product would contribute to the company's profits and reinforce its standing in a leading category.

"I'm confident that our team will be able to enhance the brand's value," Kessler declared. "Perrigo is in a unique position to leverage its existing infrastructure and production expertise by promoting the active ingredient in the product, the extensive network of customers in the US, and our innovation pipeline in the gastroenterology category."

Perrigo's market cap is $6.6 billion, following a 33.3% drop in its share price over the past year, but the share price has risen 37% since hitting its low point this year.

Published by Globes, Israel business news - en.globes.co.il - on September 8, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

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Perrigo CEO Murray Kessler Photo: Perrigo PR
Perrigo CEO Murray Kessler Photo: Perrigo PR
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