The Food and Drug Administration has granted final approval to Axiron Topical Solution, a drug manufactured by Perrigo Company plc Ordinary Shares (NYSE:PRGO). Axiron topical solution is used in the treatment of adult men who are suffering from low levels of testosterone or who lack any testosterone at all as a result of certain health conditions.
“This final approval is another example of making long-term investments in challenging new products. As always, Perrigo is committed to making quality healthcare more affordable for our customers and consumers around the world,” said John Hendrickson, the chief executive officer of Perrigo.
Divesting royalty rights
The approval comes in the wake of Perrigo divesting its royalty rights for Tysabri, a drug that is used to treat multiple sclerosis. The rights were transferred to Royalty Pharma’s RPI Finance Trust in a deal that was valued at $2.85 billion. A part of that amount was to be paid in cash while the rest was to be paid as milestone payments which would be dependent on the sales of Tysabri across the globe.
The chief executive officer of Perrigo clarified the deal was an effort to extract shareholder value by disposing of a non-core asset. Despite the fact that the deal would dilute the adjusted earnings per share, the CEO added that the cash receivable would let Perrigo de-leverage the balance sheet. This would be in support of the firm’s financial policy and would also help the company as it pursued its strategic plan.
Axiron sales
In the period of one year that ended in January 2017, sales of Axiron topical solution had reached a figure of $254 million. The Ireland-based drugmaker was founded in 1887 and has experienced immense growth over the years to become one of the largest makers of over-the-counter drugs in the world. It also manufactures infant formulas for stores. Perrigo is also one of the leading providers of generics in the United States as well as offering products mostly in Australia, Europe and North America.
On Wednesday, shares of Perrigo Company plc rose by 0.48% to close the day at $74.97.