|Perrigo CEO Joseph Papa|
Perrigo ($PRGO) has a lot on its plate since fending off Mylan's $26 billion hostile takeover attempt in November, including a $2 billion share buyback and a promise by CEO Joseph Papa to cut costs and grow the company. Complicating that is the fact that it is having to recall its store brand versions of two popular meds, children's Mucinex and allergy med Zyrtec.
It was already in the midst of having to strip from retailers' shelves hundreds of thousands of packages of its copy of the number-one allergy pill sold through CVS ($CVS), Kmart, Kroger ($KR), and other retailers when today it issued a recall for its grape version of children's Mucinex.
According to the most recent FDA Enforcement Report, Perrigo is recalling 14 batches of its private label version of Zyrtec. That amounts to 209,256 cartons of blister packs of cetirizine HCl 10-mg tablets. While it is just now showing up in the FDA Enforcement report, Perrigo initiated the recall of the antihistamine in late September after it found that the products potentially contained an impurity.
Then today, Perrigo issued a recall for two batches of children's guaifenesin grape liquid and three batches of children's guaifenesin grape liquid DM because the dosing cups may have incorrect dosing markings. While there have not been reports of adverse events, the company pointed out that some small children who could have a toxicity from taking too large a dose over several days, leading to vomiting, diarrhea and stomach pain.
"Perrigo is taking this action to maintain the highest possible product quality standards for our retail customers and consumers. We are taking this action because it is the right thing to do," Papa said in a statement.
The recall follows a bruising, months-long battle as Perrigo fended off Mylan's ($MYL) hostile takeover attempt, convincing shareholders they had more upside if the OTC specialist remained independent. Only about 40% of shares were tendered for the deal that required at least a 50% buy in. Part of Papa's persuasion was a plan to slash 800 jobs and kick-start a $2 billion share buyback program. Papa also pledged to grow the business, in part by buying other producers, indicating he was most interested in "consumer facing" businesses. As such, Perrigo may find itself bidding against its former nemesis.
Many analysts thought all along that Mylan Chairman Robert Coury was overpaying for Perrigo and would be better off going after Sanofi's ($SNY) newly-on-the-block generics business or Pfizer's ($PFE) established products should the pharma giant split into two following the close of its $160 billion merger with Allergan ($AGN). But Coury insisted Perrigo's strong position on retail shelves was the perfect complement to Mylan's generics business.
Papa was first to make a move after fending Mylan and Coury off. Days after that development, Perrigo announced a $380 million agreement to buy the U.S. rights to AstraZeneca's ($AZN) Crohn's disease drug Entocort, as well as an authorized generic that's been marketed by Par Pharmaceuticals.
- here's the Perrigo antihistamine recall
- here's the Perrigo cough med recall