Perrigo Company (NYSE:PRGO; TASE:PRGO) inaugurated its new plant in Yeruham only three years ago, having invested NIS 180 million. Now that the company has announced its intention to abandon the prescription drug sector, the fate of the plant hangs in the balance between continued operation for Perrigo and being put up for sale.
Perrigo is a drug company from the US, currently registered in Ireland, dealing mostly in private brands of over-the-counter (OTC) drugs. It also has activity in generic prescription drugs, but last August presented a plan for abandoning this sector.
Perrigo said that the plan followed a strategic assessment that this measure would increase value for its shareholders and enable the company to focus on appealing to the consumer market. In 2016, activist fund Starboard Value LP, a shareholder in Perrigo, urged the company to sell its prescription drug business. Perrigo's plan is either to spin off its prescription drug business into a separate company and distribute the shares to investors as a dividend in kind, or sell the business to a third party. Perrigo expects to complete its exit from this field in the second half of 2019.
The plant in Yeruham is used for both the prescription and OTC drug sectors. It covers an area of 3,000 square meters with 10,000 square meters of built space. Perrigo acquired Israeli company Agis Industries, which operated on the site, in 2004. When Perrigo inaugurated its plant there in 2016, its announced that it would hire 200 employees, 150 of whom have since been hired.
According to Perrigo's figures, it has 800 employees in Israel, and is one of the largest employers in the Negev. Over 500 of the employees work in a plant for developing and manufacturing generic drugs in Yeruham, and the rest in Perrigo's commercial and logistics units in the Shoham industrial park.
Published by Globes, Israel business news - en.globes.co.il - on February 5, 2019
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