Perrigo has been constantly making acquisitions to expand its business and drive growth. The company’s 'Base Plus Plus Plus' strategy is focused on the expansion of the company’s durable base business by pursuing selective, accretive transactions. Earlier this year, Perrigo acquired Omega Pharma in a cash-and-equity transaction valued at approximately €3.8 billion.

Our Take

Although the generics segment at Mylan has been performing well, we remain concerned about the performance of the company’s Specialty segment. The company is facing competitive market conditions for EpiPen Auto-Injector and has lowered the average net selling price. The Perrigo acquisition would have been a strategic fit for Mylan’s portfolio and driven long-term growth. The combined company could have become a leading generic and over-the-counter (OTC) player.

Mylan holds a Zacks Rank #2 (Buy). A couple of other favorably ranked stocks in the health care sector are GW Pharmaceuticals plc GWPH and Conatus Pharmaceuticals Inc. CNAT. While GW Pharma sports a Zacks Rank #1 (Strong Buy), Conatus holds a Zacks Rank #2 (Buy).