Perrigo to purchase GSK brands

Dublin-domiciled drug firm Perrigo is set to significantly strengthen its status as one of the world’s leading over-the-counter drugs makers by acquiring a selection of such brands from industry giant GlaxoSmithKline (GSK).

New York-listed Perrigo shifted its residency to Ireland two years ago when it bought Dublin-based biotechnology firm Elan for nearly €7bn.

It is ranked as the leading maker of generic over-the-counter drugs in the US.

Although it manufactures here, it is unclear whether or not it plans to move manufacturing of the GSK products it intends to acquire to Ireland.

Perrigo said yesterday that it intends to buy the portfolio of GSK products in an all-cash transaction, although it did not disclose the purchase price.

The combined net sales of the portfolio reached around $110m (€99m) last year. It covers areas such as nicotine replacement therapy and cold and flu treatment.

The products include leading nicotine replacement therapy NiQuitin and cold/flu treatment Coldrex in Europe and pain relief agent Panodil, as well as nasal decongestants Nasin and Nezeril in Sweden.

The deal will also cover the European rights to Novartis’s legacy cold-sore management products, inherited as part of its recent asset swap deal with GSK, which are marketed under the names Vectatone, Fenlips, Fenivir, Pencivir, and Vectavir.

According to Perrigo CEO Joe Papa, the deal demonstrates Perrigo’s unique ability to maximise its brand value across its leading European distribution network, which covers 36 countries.

It will also likely be immediately accretive to adjusted earnings per share in the current year.

“This acquisition demonstrates Perrigo’s ability to execute on our ‘base plus plus plus’ strategy, in which we make selective, accretive transactions to expand our durable base business,” said Mr Papa.

“We are building on the global platform we established with the Omega Pharma acquisition to capture an even greater share of the $30bn European over-the-counter market opportunity, with several well-established, complementary brands that bolster our over-the-counter product portfolio.”

Perrigo increased its European presence by buying Belgium’s Omega Pharma late last year, in a near $5bn deal.

Meanwhile, US drug firm Mylan has warned off Israeli suitor Teva, whose interest in the company could derail the former’s still active attempts to acquire Perrigo.