perrigo company (prgo) earnings report: q3 2015 conference ... · perrigo company (prgo) earnings...

CompanyName:PerrigoCoPLCCompanyTicker:PRGOSector:HealthCareIndustry:Drugs

EventDescription:Q32015EarningsCallMarketCapasofEventDate:22.92BPriceasofEventDate:149.66

©2014TheStreet,Inc.Al l R ightsReserved Page1of26

PerrigoCompany(PRGO)EarningsReport:Q32015ConferenceCallTranscriptThefollowingPerrigoCompanyconferencecalltookplaceonNovember16,2015,03:00AMET.Thisisatranscriptofthatearningscall:

CompanyPart icipants

ArtShannon;PerrigoCompanyPLC;VPofIRJoePapa;PerrigoCompanyPLC;Chairman&CEOJudyBrown;PerrigoCompanyPLC;EVP&CFO

OtherPart icipants

MarcGoodman;UBS;AnalystRandallStanicky;RBCCapitalMarkets;AnalystLouiseChen;GuggenheimSecuritiesLLC;AnalystElliotWilbur;RaymondJames;AnalystUnidentifiedParticipant;Stifel;AnalystGreggGilbert;DeutscheBank;AnalystJasonGerberry;LeerinkPartners;AnalystDavidSteinberg;JefferiesLLC;AnalystTimChiang;BTIG;AnalystSumantKulkarni;BofAMerrillLynch;AnalystLindaBoltonWeiser;B.Riley&Co.;AnalystArielHerman;GoldmanSachs;AnalystDouglasTsao;BarclaysCapital;Analyst

MANAGEMENTDISCUSSIONSECTION

Operator :

Atthistime,IwouldliketowelcomeeveryonetothePerrigocalendar2015third-quarterearningsresultsconferencecall.

(OperatorInstructions)

Thankyou.Mr.ArtShannon,VPofInvestorRelations,youmaybeginyourconference.

ArtShannon (VPofIR):

Thankyou.WelcometoPerrigo'sthird-quarterearningscall.

Inlightofallthenews,andtogiveanadditionaltimeforQ&A,Iwouldliketonotethatthiscallwillbeextendedto90minutes.

Acopyoftheearningsreleaseandourreleaseannouncinganumberofactionstoaccelerateshareholdervalue,whichweissuedearlierthismorning,areavailableonourwebsiteatperrigo.com.Alsoonthewebsiteisaslidepresentationforthiscall.

BeforeweproceedIwouldliketoremindeveryonethatduringtheprocessofthiscallManagementwill




makecertainforward-lookingstatements.PleaserefertotheimportantinformationforinvestorsandshareholdersandSafeHarborlanguageregardingthesestatementsinourpressreleasesissuedearlierthismorning.

Inaddition,thispresentationcontainsnon-GAAPmeasures.ThereconciliationofthosemeasurestothemostcomparableGAAPmeasuresisincludedattheendoftheslidepresentation,acopyofwhichisavailableonourwebsiteatperrigo.com.

Thiscommunicationdoesnotconstituteanoffertobuyorasolicitationofanoffertosellanysecurities.InresponsetotheexchangeoffercommencedbyMylan,Perrigohasfiledasolicitationrecommendationstatementonschedule14D-9withtheSecuritiesandExchangeCommission.

Securityholdersareurgedtoreadthissolicitationrecommendationstatementandotherrelevantmaterialsifandwhentheybecomeavailable,becausetheywillcontainimportantinformation.ThesolicitationrecommendationstatementandotherSECfilingsmadebyPerrigomaybeobtainedwhenavailablewithoutchargeattheSEC'swebsiteatSEC.govandattheinvestorrelationssectionsofthePerrigowebsiteatperrigoinvestorroom.com.AndnowI'dliketoturnthecallovertoPerrigo'sChairmanandCEOJoePapa.

JoePapa(Chairman&CEO):

Thankyou,Art,andwelcomeeveryonetotoday'scall.JoiningmetodayisJudyBrown,Perrigo'sExecutiveVicePresidentandChiefFinancialOfficer.Weareheretodaytotellyouwhyweareexcited,veryexcitedaboutPerrigo'sfutureinthenearterm,themediumterm,andthelongterm.

Manyofyouhavebeenaskingaboutour2016guidanceforquiteatime.Asyouarewellaware,weareanIrishcompanyunderthejurisdictionoftheIrishtakeoverlawandanyprofitforecastwemakemustbeexpertized.

Andnowwith2016onthehorizon,I'mexcitedtoprovideyouwiththatguidanceandexplainthecomponentsofvalueunderscoredbyonceagainstrongquarterlyearningsduetoPerrigo'steams'relentlessfocusinthepursuitofexcellence.Thisallleadsmetotoday'sagenda.

FirstIwillprovideafewoverallcomments,nextJudywillgothroughtheadditionaldetailsonthequarter,thenIwillwalkthroughtheactionsthatwearetakingtooptimizeourplatformtocreateenhancedvalueforourshareholdersandournew2016earningsguidance.WewillalsocontrastMylan'ssubstandardofferwithPerrigo'sexcellentexcitingfuture.

FinallyyouhaveanopportunityforQ&A.Beforewediveintotheagenda,however,IwanttostartbythankingPerrigoemployeesfortheirdiligenceandfocus.

Ourdedicatedemployeeshavedeliveredonourbusinessgoalsonceagain,achievingadjustednetincomegrowthof38%.Evenwithallthenoiseoverthepastsixmonths,ourunrivaledteamdeliveredonourBasePlusPlusPlusstrategy.

IamtrulygratefulfortheexcellentworkofourteamandIsaythankyoutotheteam.Nowlet'sgototheresultstherecentlyconcludedquarter.Youcanseethatthiswasagreatquarter,highlightedbyrecordthird-quarternetsalesofmorethan$1.3billion.

Turningtoslide5,onaconstantcurrencybasisoverthelastyearthisrepresents44%growthinconsolidatednetsales,organicconsolidatednetsalesgrowthof10%,consumerhealthcaresegmentnetsalesgrowthwas8%,andRxsegmentgrewbyanimpressive34%.Thisquarter'sperformanceclearlyspeakstoourbusinessmodel'sabilitytodeliverstrongorganicgrowth.




Evenmoreimportant,wegrewourtoplineinanincreasinglyprofitablewaywhileinvestinginourfuture.Adjustedgrossprofitmarginexpanded460basispointstoathird-quarterrecordfromacombinationofourconsumerhealthcaresteams'leadingmarketpositionandoursupplychainsteams'continuinghighqualityefficientoperations.

Wealsoinvested13%moreinresearchanddevelopmentversuslastyear,furtherenablingourorganicgrowthprofileforthefuture.Intotaladjustedoperatingincomegrew45%versuslastyear,whichishighlightedbyanearly600basispointadjustedoperatingmarginexpansioninconsumerhealthcare.

Thisquarterprovidesyetagainevidenceofouruniquecatch/paybusinessmodel,thestrengthofourglobalplatform,andtheunrivaledpositionofourconsumerhealthcarebusiness.Judywillnowwalkyouthroughthequarter.

JudyBrown (EVP&CFO):

Thanks,Joe.Goodmorning,everyone.Yetagainouruniquebusinessmodeldeliveredanotherexcitingrecordthirdquarter.

Onaconstantcurrencybasiswegenerateddouble-digitorganictoplinegrowth.Ithinkit'scriticallyimportanttoremindyou,again,thatnearlyallofourrevenuesareinsulatedfromthecurrentpricingdramayouseeplayingoutinthepharmaceuticalindustrytoday.

Yetagainourworld-classteamandhighlyefficientoperationsdeliveredexpandingmargins.Yetagaintheteamdeliveredonourbottom-lineguidance,growingadjustednetincomeanimpressive38%.

Yetagainwebelievethatwewillbeontracktodeliveronfull-yearrecordadjustedearningspershareasstatedinApril.Nowlet'sdiverightintotheresultsforthebusinesssegments,beginningwithareviewofourresultsinconsumerhealthcareonslide7.

TheCHCteampostedagreatquarter,asnetsalesof$675millionweremorethan5%higheryearoveryear,or8%onaconstantcurrencybasis,drivenbystrongnewproductlaunchesand7%growthinUSOTC,doublethegrowthofUSstorebrandtotalOTCaccordingtoIRIMULOdata.

ContributionsfromstorebrandversionsofPrilosecandMucinex600milligramERpropelledtheOTCperformance,whiletheimpressivehighsingle-digitnetsalesgrowthwithintheinfantnutritioncategorywasdrivenbystrongconsumerdemandforstorebrandversionsofeasilydigestibleformulas.Whilenetsaleswithintheanimalhealthcategoryexperiencedsomeheadwindsandwereloweryearoveryear,solidseasonaldemandsforthehigher-marginfleaandtickproductsintheportfoliooffsetanyimpacttooperatingmarginswithinthecategoryinthequarter.

NetsaleswithintheVMScategoryweremorethan5%higheryearoveryear,drivenbynewproductlaunches.Thecategory'ssolidgrowthoverthelastfewquarterspositionsitwelltocontinuegrowingandthrivingunderdifferentownership.

CHCdeliveredanall-timerecordadjustedgrossprofitmargininthequarterof36.2%.Thisisanincreaseof440basispointsoverlastyearduetoproductmixandhigheryear-over-yearproductionefficienciesandvolumesinconjunctionwithfavorablecommoditiespricing.Adjustedoperatingmarginbenefitedfromloweroperatingexpensesyearoveryear.

Onslide8youcanseethatnetsalesinourbrandedconsumerhealthcaresegmentwere$302million,asthetop20brandsgrew6%yearoveryear.Additionally,weclosedtheacquisitionsofNaturvalandtheGSKproductportfolio,whichcontributedanadditional$13millioninnetsalesduringthequarter.Thedistributionbusinesswithinthissegmentwasdownsequentiallyandcomparedtotheprioryeardueprimarilytotimingofinventorysell-throughatourwholesalepartnersaswellassomechanneldynamics




associatedwiththeMylansituation.

Certaincontractsinthisbusinesscontainedchangeofcontrolprovisions.Giventhisfact,marketconcentrationbycountry,andtimingofsellthroughatourpartners,thedistributionbusinessexperiencedsignificantlylowervolumeswhichareexpectedtocontinueuntiltheMylansituationisbehindus.

Turningtoslide9.YoucanseethecontinuedstrengthofourRxbusiness,whichposted34%netsalesgrowthdrivenbyanincreaseinexistingproductsandstrongnewproductlaunches.AdjustedmarginswereunchangedduetocontinuedinvestmentinR&Dandinourspecialtypharmasalesforces.

Turningtoslide10.Specialtysciencenetsaleswere$85millioninthequarterandwereessentiallyflatonaconstantcurrencybasis,astherewere14shippingweeksofproductlastyearversus13intheUSinthethirdquarterthisyear.Also,asmanyofyousawyesterdayBiogenannouncedtheresultsofitsphaseIIIclinicaltrialevaluatingTysabriforuseinpatientswithsecondaryprogressivemultiplesclerosis,reportingthatthetrialdidnotachieveitsprimaryandsecondaryendpoint.Aswe'vealwaysindicated,wehavenevermodeledanycontributionfromSPMSintoourcurrentorfutureplans.

Turningtoslide11.WeareconfirmingouradjustedEPSguidancearoundthesamemidpointwehavehadoutstandingsinceApril,andnarrowingtherangetobetween$7.65and$7.85pershare.Consistentwithourstrongperformanceyeartodate,weareraisingouradjustedoperatingmarginguidance100basispointsfrom27%to28%.

Asyoucanseeonthisslide,ourrevenueguidanceisbeingupdatedtoreflectthedynamicsinbrandedconsumerhealthcareIhavejustreviewed.Pleasenotethisguidanceexcludestheimpactofanyoftheactionsoutlinedinourpressreleaseissuedthismorning,whichdetailsactionsthatwearetakingtoaccelerateshareholdervalueintothefuture.Furthermorethisguidanceexcludesanyimpactfromthe$2billionsharerepurchaseprogramalsoannouncedtoday.

Joe?


Thankyou,Judy.Asyouknow,wehaveawell-definedstrategytodelivertoplinegrowth

Our2016revenueguidance,whichyoucanseeonslidenumber13,exemplifiesourconfidenceinourabilitytodeliverrealresults,turningthatstrategyintotangiblegrowth.Ourfundamentalgrowthdriversfortheneartermpositioneachofoursegmentstoachievetheirthree-yearCAGRexpectationspublishedintheFebruary2014analystday.

Andnow,includingourbrandnewconsumerhealthcaresegment,wehave5%to10%forconsumerfacingbusinessand8%to12%forourRxbusiness.Thesegrowthratesareinclusiveofourpreviouslyannounced$1billionofnetnewproductsalesfrom2015to2017.

Todayweareannouncingthesevenactionsthatwillbuildonthatstrategy,leveragethepowerofourglobalplatform,andacceleratevaluecreationforshareholders.Whatwearedoingisamplifyingtheprofitandcashflowprofileofthebusinesswhichwillallowustoaccelerateprofitgrowthin2016andbeyond.

Foreverydollarofrevenuewearegoingtoachievemoreprofitability.Ourcontinuedorganicandinorganicgrowthwilldriveevenstrongerprofitaccretion.Butletmebeclear,theseactionsarereadilyachievable.

Theyarethenaturalprogressionofourglobalexpansionandongoingfocusonoperationalefficiency,




quality,innovation,andshareholdervalue.Ouractionsinvolvedfourmaincomponents.

Numberone,consolidationofourglobalsupplychaininIreland.Numbertwo,Organizationalenhancements.Threeforusisstrategicportfoliorefinement,andfinallyasharerepurchaseplan.

WhileI'lldiscussalloftheseinmoredetailonthefollowingslides,I'dliketoquicklyaddressthe$2billionsharerepurchaseplanweannouncedthismorning.Thisincludes$500millionwhichweplantocompletebytheendof2015,andanother$1.5billionwhichweintendtousetorepurchasesharesoverthesubsequent24to36months.

WewillfundtheserepurchasesfromtheCompany'savailableliquidity.ThesharerepurchaseplanwillbeginaftertheexpirationoftheMylantenderoffer.

This$500millionsharerepurchasewillbeexecutedinquarterfourandisexpectedtoadd$0.15adjustedearningspersharein2016.Tobeclear,thispacketisnotreflectedintheCompany'scurrent2015or2016guidance.

TheadoptionofthisrepurchaseplandoesnotmeantherewillbeanychangestotheM&AcomponentofourBasePlusPlusPlusstrategy.WewillcontinuetopursuefinanciallyandstrategicallycompellingM&AopportunitiesthatmeetourROI'sdeepthreshold.

ThesharerepurchaseplanisreflectiveofourbeliefintheCompanyanditsprospectsforgrowth.Simplyput,Perrigoisagreatbusinessandcontinuestobeagreatinvestment.

SincewereceivedMylan'sunsolicitedoffer,wehaveconsideredabroadrangeofoptions.InfilingafullreviewwebelievethatPerrigorepresentsthebestinvestmentforPerrigoshareholdersatthistime.Thegreenboxesatthebottomoftheslideprovidedagoodsnapshotofthevalueweareoffering.

Weexpecttheseactionstoachievebenefitsof$175milliononatotalrunratebasis.Combinedwithoursharerepurchaseplan,wefeelthisisremarkablycompellingvalueproposition.

We'llgetintothenumberslater,butrestassuredthisisvaluewellinexcessofanythingMylancanoffertous.I'dliketotalkaboutoursupplychainactionsinthebroadercontextoftheglobalplatformthatwebuilt.

Inlate2013weacquiredElanPharmaceuticals.TheElantransactionprovidedPerrigowithagatewaytoglobalexpansion.

Earlierthisyear,webuiltuptheplatformwiththeacquisitionofOmega,whichhasenabledustoprovidequalityhealthcareproductstohundredsofmillionsmoreconsumersglobally.Wearecontinuingtobuildonthisplatform,realizingevengreaterbenefitsthanweinitiallyexpected.

Asanexample,ourrecentlypurchasedportfolioofleadingOTCbrandsfromGSKandtheadultnutritionproducts,weadd15moreproductstothebackofourEuropeantrucksdeliveringtoallofourcustomers.Todayisthenextstepinoptimizingourglobalpresence.

Wearecapitalizingonthepotentialofthecolorfulglobalplatformwebuiltandcreatingoperationalstructurethatwillaccelerateourearningspotential.Tothatend,wearetakingimmediatestepstoconsolidateouroperations,supplychain,andprocurementmanagementactivitiestooneglobalcenterofexcellenceinIreland.

Byeliminatingredundancyandenhancingpurchasingpowerwewillfurthermaximizevalue.Onafullrunratebasistheseactsareexpectedtodriveoperationalandtaxbenefits,reducingoperatingcostsbyanestimated$105million.




Next,wearegoingtoincreaseourorganizationalefficiency.I'mveryexcitedtoannouncethatJohnHendrickson,formallyExecutiveVicePresidentofGlobalOperatingandSupplyChain,willbepromotedtotheroleofPresidenteffectiveimmediately.

With26yearsofexperienceatPerrigo,hehasadeepunderstandingofourbusiness,provenmanagementskills,andastrongcompetitivedrivetoensurePerrigocontinuestodeliveratthehighestlevelinourindustryintermsofquality,efficiency,andinnovation.TheshiftwillalsoallowmetopersonallyfocusevengreaterattentiononPerrigo'soverallstrategyandparticularlyourM&Aopportunities.

We'vealsoannouncedinitiativestoacceleratetherealizationofactionsonthesharedservicesmodel.Wearealreadyaleanorganization,butwearealwaysseekingcontinuousimprovement.ItisinourDNA.

Wearethustakingstepstoright-sizetheorganization,eliminateredundantadministrativefunctions,andgenerallystreamlineourorganizationalstructure.Operator,thereisacallerthatisnotmuted.Ifyoucouldpleasemutethatcall,please.

Operator :

Okay.


Thankyou.Thatsaid,theseeffortstoslimdowndon'tmeanwewillloseourmuscle.Theseplanswillinnowaycompromiseourrelentlessfocusonqualityandinnovation.Qualityandinnovationarepillarsofourbusiness.

Forexample,ourinvestmentinR&Disslatedtoincreasebyapproximately20%nextyear.Inallweanticipatetheseorganizationalenhancementswillyieldcostsavingsof$35millionatafullrunrate.

Thethirdactionweannouncedtodayiscomprisedofinitiativestostrategicallyenhanceourportfolio.Inkeepingwithourcontinuousattemptstoimproveourefficiency,wewillbeevaluatingaspectsofourbusinessanddivestingcertainassetsthatdonotmeetourROICthreshold.

Forexample,whileourUSVMSbusinessdeliversexcellentproductstoourlong-standingcustomers,wethinkthatitwillthrivemorefullyundernewownership.Whilewehaverecentlyimprovedthisbusiness,it'sdivestiturewillenhanceourrevenueandoperatingmargins,earnings,andROIC.

Weestimatethattheseactionstoenhanceourportfoliowilldeliveroperationalefficienciesatacostsavingsof$35millionatafullrunrate.Asyoucanseehereonslide17,thecumulativeheadcountimpactofthisstrategicportfolioenhancementandorganizationalenhancementinitiativesIoutlinedontheprecedingslide,willresultinatotalworkforcereductionof800positions.

Iwouldnotethattwo-thirdsofthesereductionsrelatetoassetsplannedfordivestiture.Ineedtonotethatenhancementrunsbothways.

WewillcontinueexecutingonourstrategytomakeaccretiveM&Atransactions;wewillcontinuetopursuefinancialandstrategicallycompellingtransactionsaspartofourstrategytogrowshareholdervalue.Asweannouncedthismorning,weanticipatethesecombinedactionswilldeliverincrementalbenefitsof$175milliononcethefullrunrateisachieved.Includingthesesavings,Perrigoexpectstodelivera2016adjustedEPSof$9.30,anincreaseof20%overourcalendar2015EPSguidancemidpointof$7.75pershare.

Iwouldremindyouthatbothofthesenumbersareexpertized.Additionally,wejust[faced]thecalendar




year2015portionofoursharebuybackplan,encompassing$500million,willaddapproximately$0.15toour2016EPSnumber.

Whenyouatthe$0.38ofvaluefromouroptimizationactionsannouncedtoday,thefullproformarunratewithtoday'sactionswouldbringusto$9.83ofadjustedEPS.Inshort,wearedeliveringsignificantgrowthoverlastyearandhavethemomentumandstrategynecessarytocontinuetodrivethatgrowthoverboththeshortandlong-term.

Theseareclearandreadilyachievableactionsthatweareannouncingtoday.Manyarealreadybeingcompleted,andwebelievethattheyaregoingtocreatetremendousshareholdervalue.

Whilewehavebeenhardatworkonreturningthesegreatresultsandactionplansyouhaveseentoday,MylancontinuesitsattemptstodistortthefactsanddeceiveshareholdersinordertostealourCompany.TheydidsoagainintheirmostrecentpresentationonOctober13.

Fromthebeginningofthisprocesswe'vebeencommittedtoprovidingtransparentinformationtoshareholders.Judyisgoingtowalkthroughafewofthesefacts.


OnOctober13youheardfromtheMylanManagementteamandBoardofDirectors.Theyoutlinedfourkeyclaimswhichhavelittlebasisinreality.

Onslide22youcanseeMylan'sdistortionofthefactsversustherealitywearegoingtoremindyouoftoday.One,thisofferrepresentsadiscounttooursuperior,multiple,andasub-substandardpremium.

Two,thisisnotanaccretivetransaction.InfactitisdilutivetoMylanEPSuntilatleastyearfour.Three,thereisvirtuallynoalignmentbetweenourbusinessesthatwouldserveasthebasisforgeneratingatleast$800millioninsynergies.

Four,MylanwouldultimatelydestroyvaluethatbelongstoPerrigoshareholdersacrosseverymetric,yieldingalowertradingmultipleandalowergrowthrate.I'mgoingtotakeafewminutestotalkyouthrougheachoftheseelementsnowingreaterdetail.

Aswe'venotedbefore,Mylanclaimstheyareofferingarobustmultiple.Butyoucanseeonslide23thatprevioustransactionsinvolvingcomparablecompaniesintheindustryhaveprovidedsignificantpremiumvaluationstoshareholders.

ButMylandoesn'tjustfallshort[ofthecomps],itimpliesnopremiumtoPerrigo'sdurabletradingmultiple,amultiplethatPerrigohasearnedthroughitssuperiortrackrecord.IntheirpresentationMylanattemptstodiscreditPerrigo'svaluation.

Thereality,asyoucanseeonslide24,isthatwetradelikeourconsumerpeersandhavedonesoconsistentlyovertime.WhenyoucomparethistoMylananditspeersthedifferenceisstark.

OurconsumerfacingbusinessputsusatasustainablecompetitiveadvantagetoMylananditsgenericspeers,andpositionsuswell,asIsaidearlier,toconformtorecentpharmaceuticalindustryvolatility.

Slide25furtherunderscoresthegapinvaluationofourtwocompanies,whichhasbeenaconsistentoneovertime.RecentlyMylanhasfallenwellbelowitspeers,downover25%sincetheychasedTempoaway,achangethatcan'tjustbeexplainedawaybymarketvolatilityandnoise.Wearen'ttheonlyoneswhohavenoticedthatMylanmaybetheonlycompanyinS&P500withoutarealisticexpectationofatakeoverpremium.

Corporategovernanceisnotjustasoundbite.Ithasrealvalueramificationsandboilsdowntoasimple




fact.

WehavehistoricallytradedatapremiumtoMylan;wedeservetotradeatapremiumtoMylan;andwewillcontinuetodosointhefuture.Whywouldwewanttoexposeourshareholderstoastockthatistrading,andjustifiablyso,ataninetimesmultiple?

Mylanclaimsthistransactionwouldbequote,meaningfullyaccretivetoshareholders,unquote.Theydosobyinventingyetanothercreativeinterpretationofwellunderstoodterms.

Asyoucanseeonslide26,nomatterwhatwordstheyattempttoputaroundit,theysimplycan'thidethatthisisadilutivetransactionforMylanshareholders.Ifyoutender,thisisthestockyouwillreceive.

AsISSrightfullypointsout,whywouldshareholderstakeontheriskofaManagementteamthatdoesnotofferaccretionuntilatleastyearfour?Mylanclaimsthattheyarewellpositionedtocapturethebenefitsoftheproposedtransaction.

Onslide27youcanseethelimitedopportunitiesforsynergies,aswellasasignificantintegrationandexecutionrisk.Ourconsumerfacingbusinessesrepresentapproximately75%ofouroperatingexpensesinnetsales.

Mylanhasvirtuallynopresenceintheconsumerfacingspace,whichmakesverticalintegrationandstreamliningacompletelyunrealisticwayofattainingsynergies.OfallMylan'sAPItheyhaveonlysixthatwouldsupportproductionofthe4,900OTCproductswemake.

Theydon'tmakeibuprofen,theydon'tmakeguaifenesins,theydon'tmakeacetaminophen.Meanwhile,RobertCouryandtheMylanteamhavetriedtoindicatethattheyarewell-positionedtocapturecostofgoodssoldsynergiesthroughverticalintegration.

Thisissimplynotthecaseanditdemonstratesthetruth.Theydon'tunderstandthisbusiness.

AsashareholderyouneedtoaskyourselfdoyoureallythinkMylan,withoutanyexperienceinthespace,canrunPerrigo'sworld-classOTCsupplychainandoperationsbetterandmoreprofitablythanwecan?IntheirpresentationMylanindicatesthattheirfourthtenantisquote,immediatevalueforPerrigoshareholders,unquote.

Asweandotherthirdpartiesseeit,thisisabaddeal.Wehaveaconsumerfacingbusinessatatimewhenquestionshavebeenraisedaboutprescriptionprices.

WewantnothingmorethantohavetheMylanofferlapseandtobeabletodeliverleadingshareholderreturnswithoutbeingtiedtoMylan'sanemicprospects.OurshareholderscandobetterthanhavetheirfortunetiedtoMylan.

Ultimately,ourrespectivehistoricallong-termreturnsspeakforthemselves.AgainIhavetoask,whywouldyoutradeourstockfortheirs?

Onslide30youcanseethattheguidanceweputforthearliertodayfor2015and2016isunderscoredbytheconsistencyofourtrackrecordindeliveringearningsgrowth.Historicallywe'vedeliveredanEPScompoundannualgrowthrateof19%,andeveryyearwehavedonesoonanincreasinglybiggerbase.

Thisisaleadinggrowthratethatdistinguishesusinthemarketplace.Andyoucanseeonslide31thatweareconfidentthistrendwillcontinue.

Further,wearecommittedtoleveragingourearningsgrowthtoreturnvaluethroughinitiatives,likethesharerepurchaseplanweannouncedtoday.AndthisisevenbeforeweincludetheadditionalupsidefromfuturestrategicM&A.




Iwouldliketowalkthroughthebuildingblocksonslide32togiveyougreaterclarityonthefinancialtruth.PerrigotodayoffersyougreatervaluethantheMylanofferonthetable.Letmeexplain.

Mylanhasreported$800millioninsynergiesbyyearfour.Usingbasicmathifyouassume25%synergyachievementin2016,thefirstyear,andaPerrigoshareholderownershipof40%,thisis$65millioninafter-taxnetincomebenefitin2016toPerrigoshareholders.

Incontrast,theoptimizationactionsweannouncedtodayataneffectivetaxrateofbetween14%and15%,wouldgenerate$94millioninafter-taxbenefitflowingdirectlytoPerrigoshareholdersin2016.Sotokeepitverysimple.

Justbyexecutingonourexistingplans,PerrigobeatsMylan'snumbers.AndPerrigoshareholdersretaincontroloftheCompanythathasdrivensuperiormultiplesyearafteryear.

Perrigoshareholderscomeoutaheadinnetincomeimpact,evenbeforeyouconsidercapitalization.Thestarkdifferenceincapitalizationofourtwocompaniesonlyamplifiesthisdifference.WhyseekcontroloftheCompanywithstandalonePerrigocanprovideyoumorevalue?

IntheirpresentationMylanreliedheavilyonaninventionconcept,ahypotheticalunaffectedsharepremium,orHUSP,whichisentirelyself-createdandself-serving.Asyousawinthelastslideyoucanseeagainonslide33,ourshareholdersshouldnotbeinterestedinamadeupHUSP.

They,likeus,arelookingattheveryrealmath.Nomatterhowyourunthenumbers,ourimpliedvaluerangesfrom$190to$202.Butdon'tjusttakeourwordforit.

Thisalignswithstreetestimates,whichcomeinatanaveragepriceof$203.AllofthesenumbersrepresentasignificantpremiumtowhatMylanisoffering,which,asablacknight,standsatapproximately$169pershare.PlusyouretainfullownershipandcontrolwithoutthetransactionorexecutionriskassociatedwithMylan'sbaddeal.Withthat,IwillturnitbacktoJoe.


OverthelastsixmonthsIsaiditcountlesstimes,thePerrigoBoardofDirectorsiscommittedtocreatingvalueforourshareholders.Thatmeansvalueinthenearterm,mediumterm,andthelongterm.

Youhavetwooptionsinfrontofyou:Mylan'soffer,whichdestroysvaluewithameagerpremium,lowfuturemultiple,limitedprospectforfuturegrowth,andaBoardandManagementteamthathaveshownablatantdisregardintheiractionsforshareholders'interest.AndthenthereisvaluerepresentedbyPerrigo'sdurablebusiness.

Weearnedourstrongmultiple,onethatwearepoisedtocontinuedeliveryonintothefuture.Wehavedeliveredconsistentdouble-digitbottomlinegrowthtimeandtimeagain,andthisasanoutstandingquarterisnodifferent.

We'vecommittedtoaccesstodaythatcombinedwithoursharebuybackprogramandourexistingstrongorganicgrowth,willgenerateanexpected$9.83inEPSvalueforshareholdersoverthefuture.AndthereisfurtherdrivehowevertousetowardsinorganicgrowthaswecontinuetoexecuteunderM&Astrategyasanaturalacquirerwithapremiummultiple.

Whenyoulookattheside-by-sideitispainfullyclearthatMylanistryingtostealthisCompany.Itbearsrepeating,wearestrongaCompanydeliveringvaluewellaboveMylan'soffertoday.

AllthisleadsmetoreiterateourconclusionthatthePerrigoBoardofDirectorshasreiterateditsstrongrecommendationsthatyouprotectyourinvestmentinPerrigoandnottenureyoursharesintoMylan's




inadequateoffer.Ourfutureisbrightinthenearterm,themid-termandthelongterm,andweareexcitedtohaveyoualongwithusaswemoveforward.

Operator,Iwouldnowliketoopenupforquestions.

QUESTIONS&ANSWERS

Operator :

(OperatorInstructions)

MarcGoodman,UBS.

MarcGoodman (Analyst-UBS):

Iguessfirstofallthebrandedconsumerlookedalittlelightthisquarter.Couldyouspecificallyaddressthat?Andthenonthe$35millionofsavingsfromtheVMSbusinessdivestiture,Iwasalittleconfusedbywherethesavingsactuallycomefrom.Thankyou.


Iwillstartwiththebrandedconsumer.Andyouarecorrect.Thereissome--thatnumberisalittlebitbehind.

OneofthethingsthatMarc,thatyouactuallypointedoutinavideoyoudid,isthatourbrandedconsumerbusinessdoeshavesomedistributionofproducts,forgenericproducts,andasaresultofthisMylanofferwearehavingsomedifficulty,orwhatIwouldrefertoanegativesynergy,inshippingsomeofourproductsfromtheOmegaCompanyintoourdistributor.Thisisoneoftheabsolutelynegativesynergiesthatwepointedoutinthepast,andwe'reseeingtherealizationofthatasthecurrentdistributorisactuallyputtingofftheacceptanceofanyadditionalproductuntilwegetthisofferbehindus.

Andthatwehope,asIsaid,onNovember13thiswillbebehindusandwewillthengobackintoasituationwherewewillhaveabettersituationthere.ThebrandedconsumerbusinessIthinkJudymentioned,Iwouldsimplymentionasaresultofsomeofthedistributionproductsalesthathavenotoccurredduringthecurrentquarter.Judy,youwanttotakethesecondpartofthatquestion?


Absolutely.Hi,Marc.The$35millionisreferencedspecificallyonpage17ofthematerialswherewediscussstrategicportfoliorefinement.

VMShasbeenabusinessthatwe'vetalkedaboutpossiblylookingatstrategicalternativesforsometime.Group'sbusinessisperformingwellnowandwebelieveitiswell-positionedtodaytobedrivingundernewownership.

Butdon'tbeconfusedthatthispagedoesnotrepresentexclusivelyactivitiesthatrelatetoVMS.Thereareotherportfoliorefinementthatarealsoembeddedwithinthisexpertizednumber,andtheyarepartofour2015and2016plans.

We'respecificallyreferencingVMStodaybecausewearegoingtokickthatprocessoffsoon.Butsufficeittosaythereareotherthingswithinthatcompriseto$35millionofrunratebenefitonago-forwardbasis,wearejustnotspecifyingthosetodayindetailaswekickoffthoseprocesseslater.

Butsufficeittosayagain,thosenumbershavebeenreviewedindetailwithourauditorswhohavegone




throughthisprocesswithustogivebothourBoardandyouconfidenceofourabilitytodeliveronthosesavingsintotherunratebeyond2017.


Operator,nextquestion.

Operator :

RandallStanicky,RBCCapitalMarkets.

RandallStanicky(Analyst-RBCCapitalMarkets):

DoesthisannouncementmeanthatyouarenownotevaluatingalternativetransactionstotheMylanoffer?AndmaybejusttalkaboutyourappetiteforM&Aingeneralandhowthatmayormaynotchangeaftertomorrow.AndthenIhaveonequickfollowup.


Yes.Ithink,Randall,thewayIwouldsayitisthatwebelievethattheMylanofferisabaddeal.Wehavesaidthatonnumerousoccasions.

Iwouldsaythatbecausetheyhaveputabaddealonthetablewedon'twanttoenterintoasecondbaddeal.IthinkJudysaiditverywell,peoplethatwantadealbadlydobaddeals.

Wewanttobesmartandthinkthroughoursituationinfrontofus.Havingsaidthatthough,itisclearthat--youknowusverywell.We'vedone27transactionsoverthelastnineyears,we'vedonefourtransactionssincetheinitiationofthisonApril8th.

Sowearegoingtocontinuetolookattransactionstobeclear,butaswe'vesaidtoyoutodaywethinkthebestinvestmentwecanmakerightnow,givensomeofthemarketuncertainty,it'sinourownshares.Wethinkthatisobviouslysomethingthat,atleastasyoulookatwhatthemarketplaceis,worthdoingrightnow.

Webelievethereisawonderfulopportunitytorepurchasesharesnowbasedonwherewethinkwearegoingtobeinthefuture,especiallywiththeseprogramsandactivitiesthatwe'velaidouttodayintermsofouractions.Soclearlywethinkthisistherightwaytogo.


Andjusttoaddcolortothat.Withthesharerepurchaseprogramwe'veannouncedtoday,wealsowanttogiveyouconfidencethatweplantofundthatthroughongoingcashflowsandtotheextentthatthereisanimportantM&Atransactionthatisinfrontofusthatwouldinanywayhinderourabilitytomaintaininvestmentgrade,wemaysuspendtheprogramforaperiodoftime.

Buttheintentionhereistokeeprebuyingoursharesthroughouroperatingcashflows.AndwebelievewecancontinuetoexecuteonaveryhealthyM&Astrategywhilemaintainingourveryhealthybalancesheetintothefuture,andcontinuetoaddincrementalorganicgrowthonago-forwardbasis.


Tobeclear,youcouldstillannouncewhetheritwillbeasmalldealoralargedeal.YoucouldstillannouncetransactionsupandtotheNovember13tenderdeadline,isthatcorrect?





Iwouldsaythefollowing,wearesubjecttotheIrishtakeoverrulesandwefollowthoseveryclosely.Wecanintroducenewinformationuntilthe23.

Ifwebelievethatthereisasignificantopportunity,wewouldseektheabilitytodothatwiththeIrishtakeoverpanel.Obviouslywewouldhavemoretime,assumingtheywouldgrantusthatabilitytodothat.

IthinktheanswerisrightnowwebelievethisisthebestactionwecantakeasaCompany,andthisiswhywe'recomingoutwiththeseactionsthatwe'vetalkedabouttoday.Ifsomethingdidcomeup,Ithinkwehavesomealternatives,butwe'dhavetoworkwiththeIrishtakeoverpanelforthat.


Gotit.AndJudy,youtalkedaboutlimitedtoAPIoverlapping,andyou'retalkingabout$175millionincostsynergiestoday.Mylanistalkingabout$800million,againwithlimitedAPIopportunity.Whatisthedisconnect?

Istheremoreopportunityfromyourperspectiveforyouorarewetalkingaboutcostsynergytargetsthatwouldtaketoomuchoutofthebusiness?Canyoutalkaboutwhatthedeltabetweenthosetwonumbersis?


LetmestartandthenJudy,Iwillturnittoyou.OntheAPIs,oneoftheobviousquestionis--becausethatisaquestionthatMylanhasasserted,thattheyhaveopportunitiesforverticalintegration.SoIwentthrougheverysingleAPItheymake.

Theymakeover176APIs.Ofthattherearelessthanhalfadozenthathaveanyapplication,anyproductsthatwemanufactureatthePerrigoCompany.

Rightnowtheydonotmakeacetaminophen.Theydon'tmakeguaifenesin;theydon'tmakeibuprofen.

WhenyouthinkaboutwhatanOTCcompanyutilizes,theyjustdon'tmakeit.Sotherealityforthemtosuggestthatthereissignificantverticalintegrationisajoke,withallduerespect.It'sjustnotgoingtohappenbecausetheydon'thavethoseproductsintheirportfolio.

IftheyweretostartwithanAPImanufacturingandgeneratingaDMFitwouldtakethree,four,fiveyearstogetthatproducttothemarketplace.Forthemtosuggestthatverticalintegrationis--lookatthedata.

I'dinviteallofyoutolookattheMylanAPIpageandwhatproductstheymake.TheymakeHIVdrugs.

Idon'tbelievethosedrugsaregoingover-the-counterasanexample.ThosearethethingsthatIthinkpeoplehavegottolookintothefacts.Judy?


Iwanttomakesurethatwe'renotcomparingapplesandoranges.Ourdiscussionsonpages15,16,and17thatoutlinethevaluecreationoftheannouncedbenefitsstemfromourowninitiativesthathavebeenunderwayforsometime,asJoereferenced,tofullyleverageandutilizetheplatformsthatwehaveinplace.AsyoumayrecallweclosedtheOmegatransactionameresevendaysbeforeIrishtakeoverlawsfelloveruswiththeannouncementofMylan'sintentiontomakeanofferforus.

Inthatperiodoftime,inthatquietperiod,wewerealreadycontinuingtheworkofplanningtheleverageofthisplatformthatwehadinplacepostedElan,postOmega.Andthesupplychainbenefitswe'retalkingabouttodayrelatetoourconsolidationofprofitsandonecenterofexcellence,aboutthefocusofacoresingleglobalteamfocusingondrivingvaluetothatcombinedtrulyglobalplatformnow,and




expandingthevaluecreationthatwillbepossibleallthewaythroughtheP&L,bothin2016andwellintothefuturewithotherconsolidationactivitieswithinoursupplychainandoperationsthatareoutlinedinthefollowingpages.

Wearenottryingtomixdiscussionhereonverticalintegration.WearefocusingonthevaluecreationpotentialofthemodelthatwehavewiththisManagementteamatoursuperiormultiple,andabletocapturequicklyincrementalenhancedvalueshareholdersimmediately.


Thanks,guys.

Operator :

LouiseChen,Guggenheim.

LouiseChen (Analyst-GuggenheimSecuritiesLLC):

Thanksfortakingmyquestions.Ihadafewhere.FirstquestionhereisjustcuriousifsomebodyelsecouldstillapproachPerrigoasanacquisitiontargetbetweennowandNovember13?Idon'tknowifthatfallsundertheIrishlaws.

Secondly,howshouldwethinkaboutorganicgrowthinthefourthquarterof2015?Wegotsomequestionsonthat.

AndthenlastthinkisIknowyouhaveanumberofpotentialnewproductlaunchesin2016;Nasacort,Flonase,theMucinexfamily.Iwaswonderingifyoucouldtalk--what'sincludingyourguidancethereandhowdoyouthinkaboutthoseopportunities?


Letmetakethem.There'sthreedifferentparts.CansomeoneelseapproachusthroughNovember13?Irishlawdoesn'treallyhaveaspecificruleonthis.Theycan'tpreventanyonefromapproachingus.WewouldtaketheactionsthatwouldneedtobetakenworkingwiththeIrishpanelshouldthatoccur.

Ithinkthereareclearlysomeopportunitiesthere,butIdon'twanttogetintoanyspecificsbecauseIwanttogobacktowebelieveafteranassessmentofallthefactsinfrontofusthatthebestactionwetakeistheactionthatwehaveinfrontofustoday.Especiallygivensomeofthemarketvolatilitythatwe'veallseeninthemarketplaceoverthelastthreetofourweeks.

Onthequestionoforganicandtherestof2016,IthinkwewouldstickwiththecommentsthatJudymade,andJudymaywanttoaddafewmorethings.Ijustwanttotalkalittlebitabout2016andyoucanperhapsaddress2015,Judy.


Sure.Thefourthquarter,aswe'vesaid,themaindriverofthesmallshiftintherevenueguidanceforthefullyearisprimarilyinthebrandedconsumerhealthcarebusiness.Ifyouareworkingyourmodels,whichI'msureyouare,basedonthebeginningoftheyearbroughtassumptionsaroundthetotalconsumerpoolgrowthyearoveryearandtheRXgrowthyearoveryear.

Youwillseethatyourmodelwillsaythatconsumer--sorry,pardonme,fourth-quarterrevenuegrowthwillbeslightlyslower.That'showtogetthemodeltowork.Butthat'salsoknowingthatwearemodelingintosloweryear-over-yearbasisversusthethirdquartergrowthrates.




Butsufficeittosaythatthatisalsousforecastingintothemiddleofthecough,cold,fluseason.SowehaveputourmodeltogetheronthebasisagainofanormalDecember31cutoffthecough,cold,fluseason.Andthere'salwaysthedynamismthatcanhappenastheseasonkicksoffintheDecembermonth.


Andthislastpartofyourquestion,Louise,youaskedaboutthe2016.WhatIwouldsaythereiswegobacktowhatwe'vepreviouslysaid;thatweexpecttolauncha$1billionofnewproductsoverthenextthreeyears.

Thatisapproximately$330millionayear.Whatthatreallycomesouttois,asyoupointedoutsomeoftheimportantones.

TheFlonaseopportunitywebelievewehaveearlyinthe2016timeframe.WehavetheremainingportionsoftheMucinexfamilyofproducts,andwesitwithourRXportfoliowiththebestportfoliowe'veeverhadintermsofR&Dprojectsandproductsthatwillbeapproved.

Iwouldsaythatreallythosewillbetheprimarythingsthatwewilltalkabout.Obviouslyaswetalkmoreabout2016atthebeginningoftheyearhaveotherthingswe'lladdtoit,butthosearereallythebigproducts,thatMucinexfamily,theFlonase,andthetotalofsomewhereinthe$330millionnewproductswell.


CanIjustaddoneotherthingabout2015tomakesurethateveryoneiscrystalclear,becausetheremaybesomeconfusion.Theguidancechartthatisinthematerialandthatreferencesthefull-yearnumbersfor2015andthetighteningoftheEPSrangeto$7.65,$7.85doesnotincludeanythingfortheannouncedsharerepurchaseprogramthatwouldcommenceinthesecondhalfofNovemberandrunthroughDecember.Anyvaluefromthatwouldbeincrementaltothatguidance.


Thankyoufortheclarification,Judy.

Operator :

ElliotWilbur,RaymondJames.

Elliot Wilbur (Analyst-RaymondJames):

Ijustwanttogobacktosomeofthefinancialmetrics,particularlyontheconsumerhealthcareside.AndIthinkIaskedthesamequestionlastquarter,butIthinkit'simportanttocalloutagainintermsofjustthestrongmarginexpansionperformanceoverthelasttwoquarters.

Andthatcertainlyisdrivenprimarilyatthegrossmarginlevel.Butyou'retalkingaboutimprovementsversuslongertermaveragesof400to500basispointsinaprettyshortperiodoftime.

Andcertainly[thebessuggested]there'sbeenastructuraluptickinthemarginprofileofthatbusiness.AndagainwantedyoutowalkthroughsomeofthekeydriversofthatbecauseIdothinkit'saveryimportantchange.


Sure.I'llstartandJudyyoucanaddsomethings.AsJudysaidduringthecall,oneofthethingsthatwe




aredoingincrediblywell,wehaveatremendousfocusintheorganization.

Theorganizationunderstandsthefocusthatneedstobebroughttothisquestion.Andthatfocushasbroughtwithitjustanincredibleefficiencyinourmanufacturingsupplychainprocurementandalsowhatwe'vebeenabletoaccomplishjustbyworkingwithourvendors.

WearethelargestconsumerprocureroftheAPIsfortheseproducts,sothereforewethinkwegetthebestpricesintheworld.OnceagainIthinkthatwe'rejustshowingtheleveragewehaveinourbusinessaswehavebeenrelentlesslyfocusingonthisoperationalefficiency.Judy,doyouhaveanythingtoaddtothat?


Joe,youhititspoton.It'sproductmix.Wehadfavorableproductmix.

Theoperationsteamisoperatingonallcylinders,andwhatisgreatisthattheteamcontinuedtomakeinvestmentsinthebusinessinconsumerhealthcare.Sotherewasnotasacrificeofinvestmentinthefutureorappropriatepromotionalspendtosupportproductlaunches.Andtheystillobviously,asyoucanseedidaterrificjobwiththeoperatingmarginexpansioninthequarterbothsequentiallyandyearoveryear.

Elliot Wilbur (Analyst-RaymondJames):

IfIcouldaskasecondquestionaswellitwouldbeappreciated.SpecificallywithrespecttoperformancetrendsintheRXgenericbusiness.

Historically,ofcourse,that'sbeenoneofthestrongercontributorsintermsofyear-over-yearoperatingprofitgrowth.Andoverthelastcoupleofquarterssaleshavestalledoutatthe$250million,$260millionlevelonaverage.

AndIguesssortofbackingintorevisiontofour-yeartoplineguidanceandthenwhatyoutalkedaboutintermsofthepercentagecontributionfromthatbusinesslastquarterwouldsuggestafourthquarternumbersomewherearoundthe$300millionmark.AndIdon'tknowifit'sstillrealistictoexpecttostepupthere.

ButJoemaybecanjusthitonsomeofthekeyperformancemetricsthereandwhetherornotweshouldbeexpectingsequentialgrowthofthatmagnitude.Andthenmaybemoreimportantly,obviouslyfinancialmarketshavebecomeveryconcernedaboutthepriceinflationcomponentofgrowth,bothonthegenericandbrandsidegoingforward.

Andcertainlythegenerictopicalbusinesshasbeenoneofthefewsegmentsofgenerichistorythathasreallybenefitedfromastrongoverallpricingdynamic.Andthinkingabout8%to10%growthnextyear,howmuchdoyouthinkthatisgoingtobedrivenbyprice?

Ordoyouthinkwe'vekindofhitaninflectionpointmaybewheregrowthmetricscanbefarlessdependentonprice,andmaybeweareactuallylookingatpotentialnegativeimpactonpricegoingforwardinthatsegment.Thanks.


Ithink,Elliot,youhadaboutthreeorfourthingsIwanttocommenton.Numberoneontheperformanceofthebusiness.IwouldrepeatIguessmycommentfromthesession.

Wedidsee34%improvementintheRXpharmaceuticalsegment.Soit'saverysignificantgrowthrateat34%.Iunderstandyourcommentaboutexpectations,butIwouldsimplysaythatweenterintothisfourth




quarterin2016withthebestpipelinethatwe'veeverhadinourRXproductcategory.Wefeelveryoptimisticaboutwherewe'regoingtogofortherestofthequarterandthenobviously2016basedonthesenewproductsflow.

Onthequestiononpricing,certainlyweseethatoutinthemarketplace,butIwouldremindtheaudiencetodaythatwhatwe'vealwayssaidaboutpricingisthatourpricingacrossourtotalbookofbusinessisupflattoupslightly.Whiletheremaybeaproductthatwedoraisethepriceon,thereareotherproductswe'retakingpricedown.

Ourtotalstrategyforpricing,asIhavesaidIthinkonnumerouscalls,istokeeppricingflattoupslightly.Whichmeansthatyes,somepartswemayattempttoraisepricesthere,butinotherproductswe'rebringingthepricedown.Sothinkaboutusaskeepingpricingflattoupslightlyasreallythewaywe'regoingtolookatourtotalportfolio.

Whetherwearetalkingaboutanyspecificproductoranyspecificcategoryoranysegmentofourbusiness,theoverallcommentisflattoupslightlyforourpricing.AndIthinkthat'sreallythebestplaceforthelong,sustainableconsistentapproachtopricingthatwe'vehadinthepast;wewillinthefuture.

Operator :

AnnabelSamimy,Stifel.

Unidentif iedPart icipant (Analyst-Stifel):

ThisisAndrewinforAnnabel.Ijusthadacoupleofquestions.DoyouseeanyotheropportunitiesinternationallyintheneartermtofurtherleveragetheOmegaplatform?

Areyoulookingtoexpandanywherethere?AndsecondiswhatisyourtimelineforthesaleofyourVMSbusiness?Thankyou.


Yes.Numberone,doIseeanyopportunitiesforaddingadditionalproductstoourOmegabusiness?Theanswerisabsolutelyyes.

WhatIwoulddescribetoyouisthatwebelieveOmegaisexactlyinthesameplacethatourconsumerhealthcareUSbusinesswaseightyearsago,nineyearsago.AgreatbusinessOmegahastoday,butwedobelievethere'sopportunitiestoboltonadditionalproductsandadditionalgeographiestosellmoreproductstoourexistingcustomers.

We'vegotagreatnetworkofsalesrepresentativesandpharmaciesthatwedobusinesswithtoday.Webelievethatbyadding--boltingonadditionalproductstothatcategorywecandrivesignificantlytheleverageinourOmegacapabilities.

ObviouslycouplethatwithourabilitytoreducethecostofgoodssoldforOmegabybringingmoreproductsintoourdistribution--I'msorry,intoourmanufacturingplants.WethinkthatwilldrivetremendousbottomlineforOmega.

OnthequestionofthetimelineforVMS,IthinkwewillstickwithourcommentthatweinitiatedtheprocessforsalebasedontheabilityfortheCompanytoturnaroundtheperformanceofthatbusinessoverthelastcoupleofyears.Wenowthinkthebusinessiswell-positionedforthesaleoftheasset,andwewillbeinitiatingthatprocess.Idon'twanttomakeanyspecificcommentsaboutwhenthatwillbeconcluded,butwehaveandwillmoveforwardwiththeinitiationofthatsalesprocessfortheBMSbusiness.




Unidentif iedPart icipant (Analyst-Stifel):

Great,thankyou.

Operator :

GreggGilbertwithDB.

GreggGilbert (Analyst-DeutscheBank):

Judy,firstcouldyouprovidecashflowfromopsinthequarter?

AndsecondlyforJoe,inthepastyou'vesuggestedthatifPerrigowereforsaletherewouldbeinterestedparties.Isthatstillthecaseandhasthatthemebeenfullyexplored?Thanks.


Greggonthequestionofcashflow,sufficeittosayweacceleratedourprocessandclosedtoannouncetodayearlierthanournormalprocess.WearefarenoughalongthatIcansaythatweareinlinewithourfull-yearoperatingcashflowguidanceprovidedearlier.

Wearenotdone,done,doneonoperatingcashflow,butitwasagoodcashflowquarter.Andwewillbeputtingallofthefinancialstatements,includingthebalancesheetandcashflow,outwiththe10-QwhichwillbefilednolaterthanNovember6.


Onthesecondpartofyourquestionarethereotherinterestedparties?Gregg,IthinkIwillgobacktomypreviousstatementthatImadeinApril.WhenthisdealwasfirstannouncedIdidreceiveseveralinboundphonecalls.

ThoseinboundphonecallswereinterestedinthePerrigoCompany.IthinkI'mgoingtostandwiththatcommentrelativetowhereI'llgowiththat.

Ithinkthemoreimportantcommentisthatasacompany,PerrigohasbeenveryactiveinM&Aasyouknow.JustbecausewehaveabaddealinfrontofusfromMylan,Idon'tthinkIwanttoputourselvesontheshotclocktosayokay,nowisthetimetosellthisbusiness.

Youobviouslyseewhatthemarketslooklikerightnow.WethinkthatthisisnottherighttimetosellourCompany.

IfthoughthereisanofferthatcomesonthetablethePerrigoBoardofDirectors,aswe'vesaidpreviously,isnotagainstdeals.Wejustdon'twanttodoabaddeal.

Ithinkwewouldcontinuetoevaluateanyotherdealthatcomesforward,butwe'renotonashotclocktosaylet'strytosellthebusinessrightnow.BecauseIreallydothinkthelinethatJudymentionedandweheardfromoneofourinvestorsisabsolutelytrue.

Ifyouwantadealverybadlyyou'regoingtogetabaddeal.AndIreallydon'tthinkthat'sthewayweshouldapproachthisgivenwhatwebelieveisaverystrongfutureforthePerrigoCompany,bothinthenear,themid-,andthelong-termpartofthisbusiness.Ithinkwewillleaveitatthat.

GreggGilbert (Analyst-DeutscheBank):

Thankyou.




Operator :

JasonGerberry,Leerink.

JasonGerberry(Analyst-LeerinkPartners):

IjustwantedtofollowupfirstonMarcGoodman'squestionabouttheOmegabusiness.Canyouquantifytherevenueimpactofthisdistributorissueasrelatestothebrandbusiness?

AndthenmysecondquestionontheOpExfront,canyoujusttalkusthroughthestepupin4Qinspendbasedonyourfull-yearguidancemetrics?Andhowmuchofthatishavingconservativediscretionaryspendintheeventthatthisconsumerbrandbusinesscomesuplightagainin4Q?Thanks.


I'mgoingtostartwiththat,thefirstpartofthequestion,andI'llprobablyjuststickwiththecommentthere.Intermsofthetotaldistributionbusinessthatwehave,it'sover$100milliononanannualbasis.Iwilljustleaveitatthat.

Relativetowhathappenedinthequarterthough,Ithinktheissueisreallythequestionofanegativesynergythatwepointedouttoyoubefore.Thisisjustareal-lifeexampleofithappening.

Asthe--thereisachangeofcontrolinthiscontract.Thatchangeofcontrolinthiscontractwouldbeexecutedshouldthetransactiongoforward.

Ijustthinkthisisareal-lifeexamplewearealreadyseeingofasituationthatIpointedouttoyoubeforethatifthereisachangeofcontrol,therewillbenegativesynergies.Hereisthefirstexamplethatyouareseeingthere.

Sufficetosayit'sover$100millionofrunrateforthisbusinessonanannualbasis.AndIthinkI'mjustgoingtoleaveitatthatpartofthequestion.Judy,doyouwanttotaketheadditionalcommentorquestionrelativetothefourthquarter?


Ijustwantedtomakethecomment,IthinkthequestionwasdirectedtowardsoperatingexpensesandthevariablespendorwhatManagementcanandwon'tspendandanyonequarter.IfIlookatjustourcoreconsumerbusinessspendontheSG&AfrontaswellasR&D,theycontinuetospendinthequarter.

Theycontinuetomakeinvestmentsandstillgrewoperatingmargin.Soyes,thereisvariablespendineachofourbusinessunitswithanoperatingexpense,butthosewerenotcompromisedinanywayinthisquarterandwecontinuetoplantomakeinvestmentsinQ4.Theresultsyouareseeing,theoperatingmarginexpansionwaswithcontinuingtomakethoseinvestmentsasopposedto,Ijustwanttoclarify,itisnotasifthesegreatmarginresultsinthequarteraretheresultofpullingbackonthosevariableexpensesandthosevariableinvestments.


ProbablybesttolookatthenumbersthatJudytalkedaboutforthegrossmarginexpansionthatreallyaccentuateswhatJudyjustsaid.Thatisreallywhereyouareseeingthesignificantimprovementsingrossmarginastheresultoftheefficiencyofouroperationsandsupplychain.

Operator :




DavidSteinberg,Jefferies.

DavidSteinberg (Analyst-JefferiesLLC):

FirstquestionisifMylanindeedwastolosethevotecouldPerrigothenprovidesomelonger-termguidancelikeFY17orevenbeyondtogiveinvestorsabetterperspectiveofwhatyourlong-termgrossprofilemightlooklike?


David,I'lljustgrabthisfirstandI'msureJoeisgoingtowanttoelaborate.Justtopointout,Icanfindthepageinthematerial.Inmyvernacular,withexpertizationsupportbehindusknowingthatthereisalotofsensitivityonquote,long-termguidance,Ibelievethatpage18representsawaytostartvisualizinglong-termgrowth.

WhatdoImean?We'vetalkedinthepastaboutonApril21confirmingourlong-termpromiseorgoalsettingintermsoftopline,5%to10%,andwe'vealsoprovidedonpage18awaytostartviewingcalendar2016,layeringonthevalueofareduceddenominator.

Sofewersharesoutstandingattheendof12/31/15whichwillprovideincrementalvaluethrough2016throughthesharerepo.Weexpectthesharerepotocontinuethroughout2016whichwillprovideadditionalincrementalgearingontoEPS.

Weexpectrunratesynergiestocontinueasweexit2016androllinto2017,andwehavehadexpertizationworkdonetoquantifyandexpertizethebenefitofthatactivitythatgoesinto2017.Asyouaremodelingyouarealreadyputtingintotheorganicgrowthrateon5%to10%,andourgoalonalwaysdrivingEPS,excludingalltheseothersharerepurchasepiecesandexcludingthesebenefitpieces,ofgrowthinexcessofthattoplinegrowth.

Withoutgivingyouanumberorathree-yearEPSnumber,wearealready,IbelievecreatingapictureofanillustrativeEPS[clutch]sharerepothatgoesintothefuture,andwewillcertainlybeinapositiontoprovideyoucoloronthosedriversandbetterclarityaroundthecomponentsthataregoingtogiveusconfidenceinoutyears.Butinmyvernacular,wehaveexpertizedgroundworkalreadylaidtolookatthatnumbergoingupandtotherightintothefuture.


IthinkJudystateditverywell.TheonlythingIwasgoingtoaddtoyourcommentisit'snotif,it'swhentheMylantenderofferfails.That'swhatIwouldaddtothecomment.AndI'dsayayearfromnowwewillbeastronger,better,morevaluablecompanyaswegettothefuture.Justwanttomoreimportantlyjustcorrecttheword,Ithinkit'swhennotif.Thankyou.

Operator :

TimChiang,BTIG.

T imChiang (Analyst-BTIG):

MyquestionisreallyjustonyourRXpharmaceuticalbusiness.Youknowyou'vegivensomeorganicnetsalestargetsforgrowth,8%to12%,andthat'sfinebutitdoesseemlikethattypeofgrowthisalotlessthanwhattypeofgrowthyou'reexperiencingtoday.

AndInoticedthatyouannouncedthestockbuybackprogram.ShouldIlookatthatandsortofviewitasyou'velookedatotherpotentialacquisitions,butatthispointyourbestoptionistobuybackstock.IsthathowIshouldlookatwhyyouaredoingthestockbuybackrightnow?





I'mgoingtostartwiththefirstoneaboutourRXpharmaceuticalbusiness,andthenIthink,Judy,youcanmakesomecommentsspecificallyaboutthesharerepurchaseprogram.OntheRXpharmaceuticalsbusiness,youarecorrect.Wehavestatedan8%to12%growthratefor2016.

Thatisabsolutelycorrect.Thatisbelowwhatwehavedonehistorically,butthefactthatwearedoingacouplethingswiththatbusiness.Numberone,stillgrowing8%to12%thinkisveryimportant.

Numbertwo,Ithinkwe'vegotourbestpipelineeverwiththatproductcategoryofRX.Sowestillfeelveryoptimisticaboutthefuture.Andthennumberthree,wealsofeelverygoodaboutthe--boththegrossmarginandtheoperatingmarginsinthatbusiness.

Couldwedoslightlybetter?Perhaps,butIthinkrightnowwefeeltherightansweristoputforthanumber,that8%to12%growth,webelievethat'stherightnumber.

Itwillbebasedonthenewproductintroductionswehaveinthebusinessasreallybeingthemajordriverforwherewearegoingwiththatbusiness.AndIdothinkthat'saverystrongbusiness,bothintermsofthetoplinegrowthandalsotheverystrongoperatingmarginsandgrossmarginswehaveinthebusiness.Judy,doyouwanttohandlethesecondpartofthequestion?


IhavetocommentinadditiontowhatJoejustsaidabouttheRXgrowth.Sufficeittosayatatimewhenthegrowthratesthatweprovidedwerelargerpercentages,thebusinesswashalfthesize.

Wehaveabusinessthatisover$1billion.We'retalkingaboutgrowingthatbusiness8%to12%intothefutureoff$1billionbaseandcontinuingtoaddnewproductsintotheportfolioonago-forwardaswell.

Andwithindustry-leadingoperatingmarginsthathavecontinuedtobestableforfull-yearrunratebasis.SoIthinkaboutthatinavery,verypositivelight,andI'minnoway,shape,orformlookingbackonthat8%to12%negatively.Ithinkit'saphenomenalnumbergivena$1billionbase.

OntopofthatIdon'tinanyway,shape,orformseethesharerepurchasethatwe'reannouncingtodaytobeanindicationofeitherthepipelineofcorporatedevelopmentgettingsmallerorrunningoutofideas.Infacttherearemanygreatideasoutthere.M&Atakestime.

Peoplewhodowanttodofeelbadlydobaddeals.WedotherightdealsattherighttimeattherightpricetodelivertherightshareholdervaluethatwecanfeelconfidentbringingtoourBoardandbringingtoyou.Atthistimewearecollectingcash.

Weareacashgenerativemachine,andthepositionofourCompanytodayissuchthatwebelievewecancapturewhatisanomalyinthestockpricerightnowwiththemarketvolatilityandtheoverhangthathasbeencreatedbythissituationwithMylantocapturethat.It'sagoodinvestmentforyouforustodothisrightnowinanacceleratedstyleofbuyingbeforetheendofthecalendaryear.

Tokeepthatondeckinto2016and2017,iftherightdealscomeforwardwewillabsolutelyseizethoseandkeepourbalancesheetcredentialsfirmandintact.Thatiswhoweareandwhatwestandfor,butweneedtocaptureanomaliesthatareobviouslyevidentinthismarkettoday.Anditdoesnotwaiveronourconfidenceandgrowththatwe'vequotedtodayinmanydifferentplacesinthismaterialaswellasourabilitytocontinuetogeneratecashandfindgreatdeals.


Thankyou,Judy,goodcomments.Operator,nextquestion.




Operator :

SumantKulkarni,BankofAmerica.

SumantKulkarni(Analyst-BofAMerrillLynch):

Thismightbebeatingadeadhorse,butcouldyoucharacterizethetypesofM&Aopportunitiesthatareoutthere?AndhowwouldthatchangeifOctober23wasnotaroundasapotentialdeadline?

Andsecond,couldyoualsotalkaboutyourOmeprazolefranchise,becauseitseemsliketherehasbeenarecentParagraphIVchallengeinthat.AndhowistheCompanythinkingaboutadditionalcompetitionthere?


OntheM&Asideyouarecorrect,asweareinthemidstoftheOctober23timing,wethoughjusttobeclear,Iwanttoprobablysaythisonemoretime.Irishlawisnotdesignedtolimitthealternativetoshareholders.Irishlawisdesignedtogetthebestforshareholders.Therearethingsthatwewillcontinuetolookatanddoandobviouslywewillneedtobeveryinclosecontactwiththetakeoverpanel,butclearlywewilldowhatwethinkisrightforourshareholders.

OnthequestionofM&A,beyondthatintermsofwhatwearelookingat,it'sallthosethingsthatwe'vetalkedaboutinthepast.WehaveduringthistimeperiodsinceAprillookedatanumberoftransactions.

Wehavecompletedfourtransactions;we'velookedatevenmorethanthat.Inlookingatthosetransactionswe'velookedfordealsthatarestrategic,accretivetoourearnings,andmeetourreturnoninvestedcapitalhurdles.

Thosearethekindofdealswe'regoingtocomebacktoyouon.AsI'vesaidinthepast,therearethingsthatweareinterestedin.Weareinterestedinopthalmics,we'reinterestedinadultnutrition,we'reinterestedinthediabeticarea,we'reinterestedinpetcare.

Thosecontinuetobetheareasthatwehaveinterestin.BeyondthatwedothinkwehaveaverystrongRXbusiness.ThatmakessensetoustocontinuetolookintheRXcategory,albeitthoughI'mnotgoingtotrytobethelargestplayerinRX.

Iwanttotrytocontinuetofindproductsthathavebarrierstoentry.Ourportfolioispredominantlyproductsareextendedtopicalsordermatology,respiratory,nasal,ophthalmic.

We'llcontinuetolookatthosetypesofproductorotherproductsthathaveasignificantbarrierssentry,likehormonalproductsorcontroldrugs,narcoticsforexampleoranythingthatisn'tinasustainedreleasecategory.Butthosewillbetheoneswepredominantlywilllookat.

FinalcommentIwanttomakeisrelativetogeography.WethinkthatthepipelineofopportunitiesthatwehavewithOmegaisverysignificantintermsoffindingadditionalproducts,additionalcategoriesthatwecanboltontotheOmegabusiness.

ThesecondpartofyourquestionIthinkwasOmeprazoleandthefranchise.Weclearlyareawareofthem,someadditionalParagraphIVfilingsonOmeprazole.Weareawareofit;weareworkingverycloselywithourpartnerDrexel.

Wethinkwe'vegotaverystrongposition.Youprobablyhaveseensomeadditionalproductsthatwe'vegottenapprovedintheOmeprazolefranchise;everythingfromthewildberrytotheOmeprazolemagnesium.




Weareverycomfortable.Wehaveanunderstandingofwhatishappeningthereandwhatwewillbelookingoutforthefutureinthatcategory.

Operator :

DouglasTsao,Barclays.


Operator,let'scomebacktothatquestionifthereisanotherquestion.

Operator :

LindaBoltonWeiser,B.Riley.

LindaBoltonWeiser (Analyst-B.Riley&Co.):

Iknowyouspokeaboutacoupleofthenewproductopportunitiesfor2016,butcanyoujustremindusallintermsofthetimingofthestorebrandNexiumproductthatyoucouldpotentiallybringtomarketwhenthatwouldpotentiallybe?Andthensecondly,sorryifyousaidthisalready,butintermsoftheseoperationalcostsavingsandactionsthatyouaretaking,werethesethingsthatyouhadplannedanyways?

Likethatwaskindofsomethingyouhadbeenthinkingaboutandyoujustacceleratedtheactiontodoit?AndiftherewasanythingthatyouincrementallycameupwithIguessaspartofthisprocess.Maybeyoucouldjustexplainkindofthebackgroundofhowthat--yourthinkingonthatsideofit?Thanks.


Sure.IwillstartwiththeNexiumcommentandtalkalittlebitaboutourapproachhereingeneral.ThenJudymaywanttomakesomeadditionalcommentsontheoperationalcostsavings.

Numberone;thestorebrandNexiumopportunityisa2017event.Thatistheexpirationof--thethreeyearsofexpirationofmarketexclusivity.Sowewilllaunchthatin2017.Astojustageneralcommentontheoperationalsavingsthatwe'velookedatandwhatwe'vedoneoncost,yes,it'ssomethingwe'vehadinourmindsforsometime.

OneofthethingsthatwhentheoffercameinfromMylanandputusintoanofferperiod,thatofferperiodmeansthatyouneedtogetthethingsthatyouhavedoneexpertized.Thatiswhatwehavedone,butit'sverydifficulttogetthingsexpertizedover12months.

Sowewerenotatapointwherewecouldreallytalkaboutituntilwejustgotheretoday,IthinkasJudymentionedandImentionedinmycomments.Ithinkwefelttodaywasthedaythatwearealmostessentiallyin2016;nowisthedaytoreallystarttalkingaboutit.


Talkinginvaguequalitativestrokesaboutinitiativesunderwaywithoutputtingdollarsonthemandattachingthemtoaguidancenumberorsomeframeworkthatyoucanuseinyourmodelingwouldwebelievecertainlyhaveperceivedaswishy-washy.Theinitiativeisunderway,postElan,establishmentofaEuropeanglobalbase,theacquisitionofOmega.

WetalkedatlengthatthetimeoftheacquisitionofOmegaaboutourusingthatasournextex-USglobalgeographicexpansionbase,leveragingourglobalsupplychain,utilizingourIrishheadquarterstopullouroperationstogetherandcreateabase.Wehavebeentalkingabouttheseitemsforsometime,




wejusthaven'tquantifiedthem.

AndasJoejustsaid,aswearenow10weeksoutfromtheendofthecalendaryearwearenowinapositiontobeabletobothexpertizeourcalendar2016andquantifyforyoutogiveyouasolidframeworkofunderstandingourconfidenceinthatyear-over-yearstronggrowthrate,whyyoushouldfeelgoodaboutthe2016numbersandtheunderlyinginitiativesthatbuttressthisplan.


AndIthinktheonlythingI'daddtowhatJudysaid,IthinkasJudywentthroughthenumbersIthinkitisveryclearthatifyoustartwiththe$9.30,youaddthesharerepurchaseofapproximately$0.15,yougetto$9.45.Andifyouthinkabouttherunrateofwhatwe'vesaidwillbearoundthe$9.83.

ThefundamentalquestionIthinkfortheshareholdersiswherewouldyouratherseethat?WouldyouratherseethatinaPerrigoPEmultipleofaballpark20times,orwouldyouratherseeitinaMylanPEmultipleofapproximately10times.Ithinktheanswertothatisveryclear,thatthePerrigosituationisamuchbettervaluecreationforourshareholders.

Operator :

JamiRubin,GoldmanSachs.

ArielHerman (Analyst-GoldmanSachs):

ThisisArielHermanonforJami.CanyouexplainhowyouarethinkingaboutthecompetitivelandscapeinmultiplesclerosisrelatedtoyourTysabriroyalty?AndspecificallyinlightofcompetitionfromRoche'snewdrug.

Andthenwiththegenericsbusiness,sothisyearyouhadabenefitfromgenericAndrogel,sohowshouldwethinkabout2016?IknowthatyouhaveasettlementforProAirintheendofDecember,butarethereanyotherbulkieritemsthatweshouldthinkfor2016?

Andthenjustlastlyquickly,isthereanyseasonalityinthebrandedbusinessortheOmegabusinessthatweshouldbeawareof?Thankyou.


Sure.LetmestartwiththeMSone,thengettotheRXportfolio,andthenwe'llgettobranded.OnthequestionofMS,wethinkweareinagreatspotwithTysabri.

WethinkTysabriasaproductisaveryimportant--inaveryimportantpositionforthepatientswithMSanditisinthehighlyeffectivecategory.Ibelievethatasadditionalproductscomingwithhighlyeffective,whattherealityisisthatpatientswillmigratemorefrequently,morequicklytothehighlyeffectiveproductsovertime.

Ithinkwe'llwaitandseehowthemarketplacedevelops,butwedothinkthatthereissomeimportantadvanceswiththesehighlyeffectiveproductsversusthewhatIwouldsaythecategoryoftheproductthatpatientsusuallystartontoday.SowedothinkthehighlyeffectiveproductswilltakeabiggerpositionasageneralruleinthetreatmentofMS.AndclearlywearedelightedtobeworkingwithBiogen,whowethinkisagreatpartnerforus.

OnthequestionoftheRXportfolio,I'mnotgoingtogointoallthespecificproducts,butjustsufficetosaywhatmycommentfrombefore,wethinkwehaveourbestpipelineeverofnewproducts.WewilltalkmoreaboutindividualproductsaswegetcloserintoJanuaryandFebruarytimeframe,buttherealityisit'stheportfoliowe'veeverhadandwelookforwardtosomeadditionalnewproductlaunches.




Youarecorrectthat2016wasfavorablyimpactedbytheequivalentoftestosterone,1%Androgel.We'vegotanumberofothernewproductsthatwe'llbelaunchingandgivesustheconfidencetotalkaboutthat8%to12%growthinourRXcategory.

Onthefinalpointonthebrandedbusiness,thereissomeseasonalitytothatbusiness.Itiseffectivelyonthecalendarquarter,itisthequarterthatisApril,May,andJuneisastrongerquarter.AndalsothequarterthatisIwouldrefertoitasOctober,November,Decemberwouldbethetwostrongerquartersaswegetreadyforeitherthesummerseasonorthecough,cold,fluseason.IthinkIansweredallthreeofyourquestions.


Summerseasonjustbeing,justtoclarify,thereareseveralproductsintheportfolioinEuropethatarefocusedonweightlossandslimming.Sothinkaboutitintermsofpeoplegettingreadyforthesummerbeachseason,justtokindofputaquiponit.

ArielHerman (Analyst-GoldmanSachs):

Great,thankyou.


Operator,wehavetimeformaybeonemorequestion.

Operator :

DouglasTsao,Barclays.

DouglasT sao (Analyst-BarclaysCapital):

Justifyoucould,Judyobviouslyranthroughsomeofthenumbersintermsofthelackofoverlap,trueoverlapwithMylan.IjustthoughtitwouldbemaybehelpfulforyoutowalkthroughsomeofthecapabilitiesontheconsumerhealthbusinessthataredistinctfromMylan'straditionalbehindthecounterpharmacyfirst?Prescription,genericbusinessandsomeoftheskillsetsandthingsthatarenotnecessarilyveryeasilyintegrated.


IwillstartwiththatandJudypleasejumpin.Onthequestionof--Ithinkthisgetstoaveryfundamentalquestion,whichmanagementteamdoyouthinkcanrunthestorebrandbusinessbetter?PerrigoorMylan?

Perrigohasa128-yearhistorywiththis,soIthinkthatbydefinitionanswersthequestion.Havingsaidthatthoughlet'stalkaboutthedifferences.

Thefirstcommentisthatourproductshavetobemasscustomized.Youhavetomakesuretherighttablet,rightbottle,rightlabel,rightcartongoestotherightcustomer.That'ssomethingthatwedoandwedoverywell.

NoonehasthecapabilitiesinthisbusinesstodothatlikePerrigodoes.I'vehadachancetobeinthisbusiness32years,IcantellyouthatI'vehadachancetoseealotofpharmaceuticalbuildings,alotofplaces,packaging,andlabeling.NoonehasthecapabilitiesthatPerrigohasasevidencedbythefactthatthat'swhywehavethemarketsharewehave.

Ithinkthesecondpartofthisisthatwearethelargestprocurerofrawmaterialsfortheover-the-counter




products.Webuyacetaminophenwebelievebetterthananyoneintheworld.Webuyaspirinbetterthananyoneintheworld;webuyibuprofenbetterthananyoneintheworld.

Tosuggestthatyoubecauseacompanycandoverticalintegrationthey'regoingtobeabletomakeourrawmaterialsatabetterpricepointisnotcredibleinthesensethattheydon'tmakethoserawmaterials.Theydon'tmakeguaifenesin,theydon'tmakeibuprofen,theydon'tmakeacetaminophen.

Forthatreasonclearlywethinkwehaveamuchpreferredpositionbecauseweknowhowtorunit,weknowhowtodomasscustomization,wemakerawmaterialsand/orprocurerawmaterialsforthebestpricesinthebusinessrelativetothe--becauseofthesizeofourbusiness.Forthosereasonswethinkwearethebetterteamtorunthisbusiness.


Justtoaddtheillustration,andIknowmanypeopleonthecallhaveseenourpresentationdozensifnothundredsoftimes.Wefrequentlytalkaboutourbusiness,ouruniquepropositionasathree-leggedstool.Athree-leggedstoolcannotstandononeleg.

Wearepharmaceuticalmeetscomplexsupplychainmeetsfast-movingconsumergoods.Thefast-movingconsumergoodsmasscustomizationconsumerpromotionalknow-howfallsawayasanoverlap.

Andthesupplychain,whilecertainlyMylanhasasupplychain,theyarenotmasscustomizedtofitthespecificrequirementsthatJoewasjustdiscussing.Tobeabletododifferentpackages,differentsize,differentendcapallcustomizedandvendormanagedonbehalfofourcustomersisdramaticallydifferentthantheclassicpharmaceuticalmodel.SoIcomebacktoathree-leggedstoolwithoneandone-quarterlegscannotstand.


Thankyou,Judy,forthosecomments.Thankyouagaineveryoneforjoiningusandtakingthetimetodaytolistentoourcomments.Weareveryexcitedaboutthefuture,andIthinkwe'velaidoutaprogramthatwebelievegivesusaverybrightfuturebothinthenearterm,themid-termandthelongterm,andweareexcitedtohaveachancetoshareitwithyoutoday.

We'lllookforwardtoifyouhaveotheradditionalquestionspleasegetintouchwithus.We'llbehappytotrytocontinuetobeoutthereandsharewithyouourexcitementforthefutureofthePerrigoCompany.Thankyouandhaveagreatday.

Operator :

Thisconcludestoday'sconference.

Allrightsreserved(c)2014TheStreet,Inc.

Pleasefeelfreetoquoteupto200wordspertranscript.Anyquoteshouldbeaccompaniedby"ProvidedbyTheStreet"andalinktothecompletetranscriptandwww.thestreet.com.Anyotheruseormethodofdistributionisstrictlyprohibited.

THEINFORMATIONCONTAINEDINEACHWRITTENORAUDIOTRANSCRIPT(the"TRANSCRIPT")ISAREPRODUCTIONOFAPARTICULARCOMPANY'SCONFERENCECALL,CONFERENCEPRESENTATIONOROTHERAUDIOPRESENTATION.THETRANSCRIPTSAREPROVIDED"ASIS"AND"ASAVAILABLE"ANDTHESTREETISNOTRESPONSIBLEINANYWAYNORDOESITMAKEANYREPRESENTATIONORWARRANTYREGARDINGTHEACCURACYORCOMPLETENESSOFTHETRANSCRIPTSASPRODUCED,NORTHESUBSTANCEOFAPARTICULARCOMPANY'SINFORMATION.




THETRANSCRIPTSAREPROVIDEDFORINFORMATIONALPURPOSESONLY.THESTREETISNOTPROVIDINGANYINVESTMENTADVICEORENDORSINGANYPARTICULARCOMPANY.

perrigo company (prgo) earnings report: q3 2015 conference ... · perrigo company (prgo) earnings...

Documents