Bloomberg News

Perrigo Premium Widens on FDA Generics Hearing: Israel Overnight

March 01, 2012

Perrigo Co. (PRGO) jumped in New York, pushing the premium over the generic drugmaker’s Israel-traded shares to the widest in six months, on speculation the U.S. will make more pharmaceuticals available without a prescription.

U.S.-listed shares of the Allegan, Michigan-based maker of generic over-the-counter drugs surged the most in three months to close $3.98 above stock traded in Tel Aviv, the largest gap since Aug. 16. MagicJack VocalTec Ltd. extended its advance this week to 17 percent as the Bloomberg Israel-US 25 Index (ISRA25BN) of the largest U.S.-traded Israeli companies gained for the first day this week, climbing 0.9 percent yesterday to 86.10.

The U.S. Food & Drug Administration scheduled a hearing this week to start March 22 to consider allowing more prescription-only drugs to be made available over the counter from mid-2014, according to an agency statement. The change may boost Perrigo revenue should its generic asthma and migraine medicines and copy of Pfizer Inc. (PFE)’s Lipitor cholesterol treatment become more available, according to Caris & Co.

“The fact that Perrigo could make a store-brand version of each of these drugs as soon as 2014 is huge,” Linda Bolton Weiser, a New York-based analyst at Caris who has a “buy” recommendation on the stock, said yesterday. “It opens up a whole other opportunity for growth.”

Perrigo, which was the best performer last year on Israel’s benchmark TA-25 Index, may get an additional $300 million in sales annually should generic cholesterol drugs go over the counter, Bolton Weiser said. Perrigo climbed 4.1 percent to $107.12 in New York yesterday after its shares in Tel Aviv rose 2.9 percent to 390.20 shekels, or the equivalent of $103.14.

FDA Switch

The FDA is considering switching asthma medicines, migraine treatments, blood-pressure drugs and cholesterol-lowering statins to over-the-counter status, Bolton Weiser said. The agency could issue a recommendation in as soon as six months time.

Teva Pharmaceutical Industries Ltd. (TEVA) the world’s largest maker of generic drugs, added 1.1 percent to a four-week high of $45.29 in New York yesterday. Teva shares traded in Israel rose 0.9 percent to 170.90 shekels, or $45.17.

Israel’s TA-25 Index advanced 1 percent to 1,091.98, the measure’s third increase in four days.

MagicJack, whose founders invented the technology used to make phone calls over the Internet, jumped 4.8 percent to $21.49, the highest price since April 2006. Investors are buying the stock after the company announced plans to release its first financial report to U.S. regulators during the week of March 12, said Tim Horan, an analyst at Oppenheimer Holdings Inc. in New York.

‘Radar Screens’

“A lot of investors only like to buy stocks that have U.S. filings,” Horan said. “The new products are selling extremely well, and as their volume has picked up, their market cap has grown as well, and the name is hitting more investors’ radar screens.”

Mellanox Technologies Ltd., an Israeli adapter maker partly owned by Oracle Corp. (MLNX), declined 1 percent in New York as Morgan Stanley said semiconductor companies continue to see weak demand. Mellanox fell to $37.80 a share, 39 cents below its Israeli shares, the largest discount since Feb. 20. Mellanox traded in Tel Aviv slipped 0.9 percent to 144.50 shekels, or the equivalent of $38.19.

Israel, whose population of 7.8 million is similar in size Switzerland’s, has about 60 companies traded on the Nasdaq Stock Market, the most of any country outside the U.S. after China. The nation is also home to more startup companies per capita than the U.S.

To contact the reporter on this story: Leon Lazaroff in New York llazaroff@bloomberg.net

To contact the editor responsible for this story: Emma O’Brien at Eobrien6@bloomberg.net


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