The ruling by the U.S. Supreme Court to overturn Roe v. Wade and leave the decision of abortion to the states has been a big topic over the last few days. An analyst singles out a pharmaceutical company that could benefit from increased purchases of over-the-counter contraceptives.
The Perrigo Analyst: Raymond James analyst Elliot Wilbur has an Outperform rating on Perrigo Company (NYSE:PRGO).
The Analyst Takeaways: Wilbur cites Perrigo as a possible benefactor of the Supreme Court ruling thanks to a switch to over-the-counter initiatives the company has made.
Related Link: 3 Women's Health Stocks Are Soaring Following Roe V. Wade Ruling
“PRGO should be at the forefront of any discussions regarding potential financial beneficiaries from changes in the reproductive health landscape that will likely emerge from the ruling,” Wilbur said.
Perrigo acquired HRA Pharma in May 2022 and the analyst points to this acquired company as being overlooked by investors. HRA is expected to file an application for an over-the-counter daily birth control pill by the end of 2022, the analyst noted.
Over-the-counter contraception is a market worth $5.5 billion in the U.S. with oral contraceptives worth $2.8 billion.
The analyst sees Perrigo being able to get a piece of this market that belongs to large pharmaceutical companies with the new HRA Pharma drug.
“While total contraceptive usage is almost certain to increase, we believe the total volume lift will be marginal.”
An over-the-counter option could increase accessibility in both cost and to women who don’t want to speak to a doctor about their birth control options.
The analyst sees potential annual sales of the HRA pill hitting $100 million to $200 million based on 50 cents per pill as the cost and hitting 5% to 10% of the contraceptive market.
Emergency contraceptive usage could go up after the ruling, Wilbur adds. The HRA acquisition also gave Perrigo ownership of Ella, a prescription-based emergency contraceptive. Ella is effective up to five days after unprotected sex.
“Ella could continue to benefit from an overall lift in emergency contraceptives even at the Rx level based on increased ‘just in case’ co-prescribing with standard oral contraceptive regimens.”
PRGO Price Action: Perrigo shares closed up 0.95% to $41.57 on Monday versus a 52-week range of $31.32 to $50.89.
See Also: Supreme Court Overturns Roe V. Wade
Photo: Reproductive Health Supplies Coalition on Unsplash
