Mild Flu and Cough Season to Cut Perrigo Sales: Israel Overnight

Sales for Perrigo Co. probably grew at the slowest average pace in four years in the latest quarter because of a milder cold season this winter, Canaccord Genuity Corp., Harel Finance Ltd. and Clal Finance Brokerage Ltd. say.

The largest U.S. maker of generic over-the-counter drugs -- which bought B’nei Brak, Israel-based pharmaceutical company Agis Industries Ltd. in 2005 -- has dropped 3.4 percent this year in New York, outpacing the S&P 500 Pharmaceutical Index’s 1.7 percent decline and compared with a 6.9 percent gain in the S&P 500 Index. The Tel Aviv shares gained 1.1 percent at 9:59 a.m. today, trimming this year’s drop to 7.1 percent. The Bloomberg Israel-US 25 Index of the largest New York-traded Israeli companies fell for the first time in five days yesterday, led by Teva Pharmaceutical Industries Ltd.

Perrigo’s sales probably rose 13 percent to $817 million from October to December, according to the median of nine analysts’ estimates compiled by Bloomberg, after jumping 23 percent in the same period last year. The number of people reporting influenza-like symptoms to their doctor in December and January was down 50 percent from 2011, U.S. Centers for Disease Control and Prevention data show.

“Most figures we’re seeing are pointing to a weak cough and cold season,” Randall Stanicky, an analyst at Canaccord Genuity Corp., which rates Perrigo “hold,” said by phone from New York yesterday. “Investors are concerned about the consumer health business and about Perrigo’s full-year target.”

The Bloomberg Israel-US index dropped 1 percent to 93, following U.S. stocks lower on concern Greece won’t agree on the spending cuts needed to get European Union aid and avert a default on its debt. The Standard & Poor’s 500 Index slipped less than 0.1 percent to 1,344.33. Israel’s TA-25 Index rose 0.1 percent to 1,117.85 today after dropping 1.1 percent yesterday.

Doctor Visits

Shares of Perrigo traded in Tel Aviv gained 1.1 percent to 347.60 shekels today, or the equivalent of $93.44. The Allegan, Michigan-based company was the best performer on the benchmark TA-25 Index last year as consumers switch from more expensive brand names amid sluggish economic growth.

The percentage of people going to the doctor for a respiratory or flu-like illness in the U.S. topped 1.5 percent during December and January, according to figures provided by the Atlanta-based Centers for Disease Control and Prevention. In the same period of 2011 it was as high as 4 percent.

Bradley Joseph, a spokesman for Perrigo, didn’t immediately return calls and e-mailed messages seeking comment.

“The weak flu season may lead to lower results and guidance than expectations in the market,” Jonathan Kreizman, an analyst at Clal Finance in Tel Aviv who rates the U.S.-traded stock “market perform,” wrote in a report e-mailed yesterday.

Perrigo will report fiscal second-quarter results today at 3 p.m. Tel Aviv time.

‘Negative Surprise’

Perrigo’s U.S. shares trade at 25 times reported earnings, more than twice the average 11.3 valuation for companies on the S&P 500 Pharmaceutical Index, data compiled by Bloomberg show.

“There’s more chance for a negative surprise from the company,” Steven Tepper, an analyst at Harel Finance who rates the stock “hold,” said by phone from Ramat Gan, Israel. “Shares may take a bigger blow because valuations are so high.”

While Perrigo has benefited from over-the-counter medication recalls by Johnson & Johnson, the world’s second biggest health-care company, Chief Executive Officer William C. Weldon said on Jan. 24 that most of the withdrawn products should be back on shelves by later this year.

“It’s not clear that the company will continue to benefit from these recalls,” Tepper said. “This will be a weak quarter.”

Allot Premium

Israel, whose population of 7.8 million is similar in size to Switzerland’s, has about 60 companies traded on the Nasdaq Stock Market, the most of any nation outside the U.S. after China. The nation is also home to more startup companies per capita than the U.S.

Allot Communications Ltd., a maker of high-speed networking equipment, climbed 5.7 percent to $17.96. The company’s Tel Aviv shares fell 0.5 percent to 62.30 shekels, or the equivalent of $16.76 yesterday. The $1.2 premium was the second-largest among dually-traded companies. The stock jumped 7.6 percent to 67.06 shekels, or $18.03, today.

The Hod Hasharon, Israel-based company was rated “buy” in initial coverage at Maxim Group LLC.

Teva, the world’s largest maker of generic drugs, dropped 0.8 percent to $45.36 after its Tel Aviv shares declined 0.7 percent to 169.20 shekels, or the equivalent of $45.51. The stock dropped 0.6 percent to 168.20 shekels, or $45.20, in Tel Aviv today.

Morgan Stanley cut its recommendation on shares of the Petach Tikva, Israel-based company to “equal weight” from “overweight,” citing valuation, as Teva’s American depositary receipts posted a 12 percent gain since the start of the year.

BioLineRx

BioLineRx Ltd. climbed the most in almost two weeks, rising 7.8 percent to $4.44. The Israeli biopharmaceutical developer jumped 20 percent to 1.87 shekels, or 50 cents, in Tel Aviv yesterday. One ADR represents 10 ordinary shares. BioLineRx signed an agreement with Genoscience and RFS Pharma to develop and market its oral treatment for hepatitis C, the second deal for the drug in less than a month.

SodaStream International Ltd., a maker of homemade soda machines, climbed to the highest level since Sept. 14 in New York, rising 4.6 percent to $42.31. The company will buy land to build a factory in the south of Israel, the Trade Ministry said in a statement e-mailed yesterday.

To contact the reporter on this story: Tal Barak Harif in New York at tbarak@bloomberg.net

To contact the editor responsible for this story: Emma O’Brien at eobrien6@bloomberg.net

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