Perrigo Announces Animal Health Acquisition, New Drug

ALLEGAN -- Perrigo Co. (Nasdaq: PRGO) Friday announced that it has signed an agreement to acquire Yardley, Pa.-based Velcera Inc. for $160 million in cash.

Perrigo also announced it had launched clobetasol emulsion propionate foam, 0.05%, the generic equivalent  of Olux-E Foam, 0.05%.

The acquisition of Velcera is expected to close during calendar year 2013 pending the satisfaction of closing conditions, including regulatory approvals.

Velcera's products, including the PetArmor flea and tick products, are available at major retailers nationwide, offering consumers the benefits of convenience and cost savings while providing high-quality care for their pets. Velcera marks Perrigo's second acquisition in the emerging OTC companion animal healthcare market, having recently acquired Sergeant's Pet Care Products Inc. last October.

Velcera, together with major retail partners, has been instrumental in developing an OTC market for pet health products traditionally dispensed only by veterinarians.  Retail sales of the PetArmor franchise exceeded $100 million during calendar year 2012, the value-brand's first full year on the market, having launched in April 2011. Velcera sales for the calendar year 2012 were approximately $60 million. The PetArmor franchise brand will be supported by a number of pipeline product candidates in both flea and tick and health and wellness categories that will continue to bring additional vet technologies to the hands of consumers in the mass market.

"Velcera's product mix represents a natural extension to the Sergeant's portfolio we acquired last October," said Perrigo chairman and CEO Joseph C. Papa. "The PetArmor franchise will accelerate our strategy to deliver compelling value to both our retail customers and American consumers. Additionally, we see an excellent opportunity to leverage our existing commercial, manufacturing and distribution capabilities, and our customer base, as we aim to make quality, affordable pet care products available to consumers everywhere."

Assuming the transaction allows for a full 12 months of sales in fiscal 2014, Velcera is expected to be neutral to "marginally dilutive" to net income after the inclusion of intangible amortization, transaction and integration related expenses. The transaction is expected to add to earnings by 2015.

As for the new drug, Perrigo will commence shipment of the product immediately. As Perrigo was the first generic filer against this product, it has 180 days of generic exclusivity. The launch date was agreed upon in a 2012 litigation settlement between Perrigo and GlaxoSmithKline.

Clobetasol emulsion propionate foam, 0.05% is indicated for the treatment of moderate to severe dermatosis of the scalp. Generic annual sales were approximately $38 million, as measured by Symphony Health Solutions.

Perrigo develops, manufactures and distributes over-the-counter and generic prescription  pharmaceuticals, infant formulas, nutritional products, and active pharmaceutical ingredients. The company is the world's largest manufacturer of over-the-counter pharmaceutical products and infant formulas, both for the store brand market. The company's primary markets and locations of manufacturing and logistics operations are the United States, Israel, Mexico, the United Kingdom and Australia.

More at www.perrigo.com.