Will This Company's Drug Cure Your Allergies?

Today, Perrigo

announced that the FDA has granted final clearance for Desloratadine, a generic version of Clarinex. Desloratadine is a stronger version of the commonly used drug Claratin for patients with more severe allergy symptoms. The drug has been under scrutiny as Perrigo had previously faced ligitation over a potential patent infringement involving the production of Desloratadine. Perrigo CEO Joseph Papa stated, "This is another example of Perrigo's continued commitment to bring new products to the market. Perrigo continues to be focused on our mission of making quality healthcare more affordable to consumers." News of Perrigo's FDA approval originally broke through Benzinga Pro. Check it out

. Perrigo is a company that specializes in developing generic drugs that compete with higher priced branded alternatives. Many consumers cannot afford to pay recurring high costs for prescriptions, and Perrigo takes advantage of this market through high production volume. Branded drugs come off patent protection constantly, and Perrigo is poised to take advantage of this expanding market. The company also faces a smoother path to FDA approval for its generic drugs, given that other companies have already faced the biggest hurdles through initial clinical trials. In addition to an expanding generic market, Perrigo benefits from more drugs moving from prescription based to over the counter. This move typically results in a sales spike of the affected drug, as consumers can purchase these drugs at will without obtaining a prescription. It also results in increased refills, as consumers don't need a physician's permission for them. "There are high margin drugs out there that are switching from Rx to OTC status, so that's good for Perrigo," stated Caris & Co analyst Linda Weiser. "The company is dominant in the generic brand sector, as they have a 70% market share of store brand drugs." Perrigo has been able to capitalize off its rivals problems. Johnson & Johnson

has faced a number of recalls over the past two years involving contact lenses, prescription medication syringes, and hernia devices just to name a few. The number of recalls is more than double that of Pfizer during the same period, and consumers have looked for alternatives in the wake of these recalls. As retailers such as Target

and Walgreens

become exposed to these issues, they may contract with Perrigo to produce their generic drugs. Perrigo benefits in that it operates a relatively recession proof business. As consumers look to cut back, or simply refuse to pay for high price branded drugs, they will turn to Perrigo's drugs regardless of the economic environment. As high margin drugs come off patent, Perrigo is primed to take advantage of markets that have already been made for them.