Perrigo slashes full-year forecast again, shares plunge

(Reuters) - Perrigo Co Plc PRGO.N slashed its full-year earnings forecast for the second time, citing pricing pressure in its generic drugs business, sending its shares down as much as 13 percent and wiping out about $1.77 billion of market value.

Birds are seen on the logo of generic drugmaker Perrigo Co outside their new factory in the city of Yeruham, in southern Israel March 2, 2016. REUTERS/Amir Cohen

Perrigo's shares have halved since the company's stockholders rejected a $26 billion hostile bid from Netherlands-based Mylan NV MYL.O in November, raising concerns about the drugmaker's future as a standalone company.

Dublin-based Perrigo, which also reported a lower-than-expected quarterly profit for the second time in three quarters, also said on Wednesday it had lower performance expectations for its branded consumer drugs business as it reorganizes.

Chief Executive John Hendrickson has been working to stabilize Perrigo since he took over in May from longtime CEO Joseph Papa, who left to lead troubled Canadian drugmaker Valeant Pharmaceuticals International Inc VRX.TOVRX.N.

Perrigo’s announcement in May that it was cutting its forecast unleashed skepticism about Papa’s tenure at Perrigo.

The latest forecast revision showed that things are not yet on the mend, said Wells Fargo analyst David Maris.

“We were surprised by the magnitude of the guidance revision, given management’s prior conviction in the business,” Maris wrote in a client note.

Perrigo, with its large portfolio of consumer products, infant formulas and over-the-counter generic topical drugs, has long been seen as a potential takeover target.

The company, which had a market capitalization of $13.62 billion as of Tuesday’s close, said it now expected adjusted earnings of $6.85-$7.15 per share for the year, down from its earlier estimate of $8.20-$8.60.

Perrigo shares were down 10 percent at $85.18 in afternoon trading after falling as much as 13 percent to touch 5-year low of $82.50.

Up to Tuesday's close, Perrigo's stock had fallen 34 percent this year, making it the second-worst performing share in the S&P 500 healthcare index .SPXHC in percentage terms.

Reporting by Ankur Banerjee in Bengaluru; Editing by Ted Kerr