You may not have heard of Perrigo, but you've probably bought its generic and house-brand drugs at Wal-Mart, Target, and CVS.
Unlike big pharma companies that wage patent wars to protect their key brands, Perrigo sells cheaper versions via partnerships with major retailers. Its business model works especially well right now, says CEO Joe Papa, because demand is increasing even as customers continue to pinch pennies.
Some of the industry's biggest players are facing imminent patent cliffs, which means they will lose exclusive rights to the formulas for their top products. Without much in the pipeline to replace them, their long-standing strategy of banking on blockbuster drugs is crumbling.
Not so for Perrigo. "We're probably about as far away from a blockbuster as anyone can be," says Papa. "I don't have any critical products, but we have great diversity."
That diversity leaves plenty of room for growth. For the 2011 fiscal year, Perrigo launched 50 new products which brought in more than $192 million in sales.
The growth should continue, Pappa says. "People still have their headaches. In fact, one might argue that because of the weak economy, they might have more headaches. But they've got to cut back somewhere."
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