Perrigo buys Paddock for US$540 million

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Perrigo buys Paddock for US$540 million

Home/Pharma News | Posted 04/03/2011 0 Post your comment

Perrigo Company may not be a household name, but nevertheless life is exciting for a medium-sized company in the pharmaceuticals world. Undeterred by a pending FDA warning letter about its Michigan facility, Perrigo recently entered into a definitive agreement to take over Paddock Laboratories in a cash deal worth Euros 394 million.

Perrigo develops, manufactures, and distributes OTC and prescription pharmaceuticals, nutritional products, active pharmaceutical ingredients and consumer products. It recorded net sales of US$2.7 billion in 2010 (Euros 1.95 billion), up 13.1% on 2009.

Paddock is a privately owned, Minneapolis-based company that focuses on the manufacturing and marketing of generic prescription specialty products. Manufacturing expertise encompasses a wide variety of dosage forms, including all types of semi-solids, liquids, powders, tablets, and capsules. The transaction is expected to close in the fourth quarter of its 2011 tax year, pending regulatory approval. The payment will be made over 15 years, for tax reasons.

Paddock brings with it a portfolio of 35 major marketed products, 20 products in development and approximately 25 Abbreviated New Drug Applications (ANDAs)* pending approval with the FDA. The acquisition is expected to expand Perrigo’s generic prescriptions business, particularly through its extended range of topical creams and gels, which fit nicely with Perrigo’s existing business.

The transaction is expected to increase Perrigo’s revenue by over US$200 million in its 2012 tax year. “This acquisition is an important next step forward in executing our strategy to expand our specialty portfolio of generic Rx products”, stated Mr Joseph C Papa, Perrigo Chairman and CEO. “It adds incremental scale, as well as excellent development and manufacturing capabilities across a spectrum of niche dosage forms”.

Business comments on the deal were mixed; nevertheless Perrigo’s share price was boosted on 25 January 2010, a few days after the deal was announced.

* An ANDA is an application for a US generic drug approval for an existing licensed medication or approved drug.

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Source: Genetic Engineering and Biotechnology News, Zachs