Perrigo gears up for cough-cold season
ALLEGAN, Mich. Perrigo is steeling for a potential volatile cough-cold season this year, because even as news of the continued H1N1 pandemic dominates the American conscience, the fact is recent cough-cold seasons have been historically weak.
“The H1N1 influenza outbreak is a cause for concern for all of us,” commented Perrigo president, CEO and chairman Joe Papa to analysts. “We take this outbreak very seriously and our retailers are preparing for the flu season right now,” he said, noting that the category represents approximately 12% of Perrigo revenues.
Outside of cough/cold, however, Perrigo’s next fiscal year looks very promising, especially given an economically-driven move to private label and the better value equation of store brand, over-the-counter products. “The overall OTC consumer market was up 4% in the [fourth] quarter versus last year as national brands were essentially flat,” Papa said, discussing Perrigo’s fourth-quarter results for the fiscal year ended June 27. “Store brands gained 13% on the strength of new product launches and increased market share … the analgesic and gastrointestinal categories were up more than 4% during the quarter. National brands were relatively flat in those categories but store brands grew 9% and 20% respectively in those categories.”
Overall consumer healthcare fourth-quarter net sales increased 9% to $407 million, results that are pared against the very successful launches of omeprazole and cetirizine. “That means this is a 9% incremental growth on top of those launches last year,” commented Judy Brown, Perrigo EVP and CFO. “Approximately 7 percentage points came from both new and existing product sales growth and another 9% came inorganically from the acquisition of JB Labs, Unico, Diba and Brunel.”
Perrigo is projecting revenue growth of between 6% and 8% in the coming fiscal year. “Our plan does factor in competition in the gastrointestinal and smoking cessation category during the year,” Brown said. “We are also aware of the FDA reviews related to acetaminophen-containing products and believe the impact to our consumer healthcare business will be limited during the transition to new product lines.”
Perrigo is planning to launch as many as 20 new products in the coming year, including potential private-label competition to Schering-Plough’s laxative MiraLax (brand sales of approximately $200 million and growing 20% per year) beginning in Perrigo’s fiscal second quarter this fall.
Perrigo also plans to launch store-brand versions of Reckitt Benckiser’s cough/cold remedy Mucinex and McNeil Consumer Healthcare’s Monistat-1 this year. Annual brand sales for Mucinex are approximately $150 million, Perrigo reported.
Monistat-1 currently has $80 million in annual branded sales, Pap stated.