Pharmaceutical company Perrigo Company (NYSE:PRGO; TASE:PRGO) is preparing to sell its prescription drug activities. Perrigo reported this plan in its second quarter financial statement, saying that the step would help it focus on the consumer market (generic and OTC activities) and create value for its shareholders.
Already two years ago when Starboard took a position in the company, the activist investment fund called on Perrigo to sell its prescription pharmaceutical activities. Starboard currently has several representatives on Perrigo's board of directors, which has now made the decision on the prescription drug operations. Perrigo's prescription drugs include mainly dermatological medications and ointments.
Perrigo chairman Rolf Classon said that the board is committed to creating shareholders value. He added that both Perrigo's consumer and prescription drug operations are well placed but each market has a different dynamic and different needs and opportunities. He stressed that Perrigo was examining splitting off the prescription activities including a sale or merger or other route that will benefit shareholders from a tax point of view.
Perrigo CEO Uwe Roehrhoff said that the separation would allow management to focus on its main activities in a way that would help long-term growth. However, Perrigo is subject to certain restrictions following the acquisition of Elan several years ago but these restrictions expire in the second half of 2019.
Perrigo reported revenue of $1.2 billion in the second quarter of 2018, down 4.2% from the corresponding quarter of 2017. The company reported a net loss of $36 million, adjusted to a net profit of $169 million, 3.6% below the analysts' forecasts.
Published by Globes [online], Israel business news - www.globes-online.com - on August 9, 2018
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