Elan deal hits Perrigo profits

US drugmaker Perrigo has incurred once-off costs of nearly $285m (€205m) through its takeover of Irish biotech firm, Elan, dragging its current year profits down by nearly 80% so far.

The New York-listed company — the leading maker of generic over-the-counter drugs in the US — yesterday reported third quarter net profits of $48.1m for the three months to the end of March, down by 57% on a year-on-year basis.

For the first nine months of its financial year (which runs to the end of June), the company posted a net profit of $73.4m, down by 77.3% on the same period last year.

A big hit to Perrigo’s bottom line growth came via the one-off costs related to its near $9.5bn purchase of Dublin-based Elan at the end of last year.

The acquisition-related costs included administration expenses of nearly $109m, $10m in interest payments and almost $166m lost on extinguishing Elan’s debt.

The US firm also paid cash consideration of $16.1m to Elan’s stock option and share award holders for the unvested portion of their awards in the second quarter of its current financial year.

The company incurred Elan takeover-related costs of $1.2m for the three months to the end of March. The $285m cost covers the first nine months of its current fiscal year.

Last year, Perrigo said that the company could benefit from around $150m in annual tax savings from acquiring Elan.

In yesterday’s earnings update, Perrigo said that ‘fiscal 2015’ should see it have a lower annual effective tax rate because of the deal.

Perrigo’s third quarter net sales amounted to just over $1bn, up from just under $920m last year, while its revenues for the nine months to the end of March rose by 3.4% year-on-year, to almost $2.92bn.

Basic earnings per share — for the nine months — jumped from 93.8c to 108.9c; with third quarter earnings going from 94c to 109.4c.

More in this section

IE_180_logo
Price info

Subscribe to unlock unlimited digital access.
Cancel anytime.

Terms and conditions apply

The Business Hub
Newsletter

News and analysis on business, money and jobs from Munster and beyond by our expert team of business writers.

Sign up
Puzzles logo
IE-logo

Puzzles hub

Visit our brain gym where you will find simple and cryptic crosswords, sudoku puzzles and much more. Updated at midnight every day. PS ... We would love to hear your feedback on the section right HERE.

Lunchtime
News Wrap

A lunchtime summary of content highlights on the Irish Examiner website. Delivered at 1pm each day.

Sign up
Revoiced
Newsletter

Our Covid-free newsletter brings together some of the best bits from irishexaminer.com, as chosen by our editor, direct to your inbox every Monday.

Sign up