The 4% rally yesterday in Perrigo shares was driven by the FDA's draft guidance titled Innovative Approaches for Nonprescription Drug Products, which helps advance the availability of over-the-counter drugs, Cantor Fitzgerald analyst Louise Chen tells investors in a research note. The analyst views the draft guidance as "meaningfully positive" for Perrigo given the company's "dominance in OTC store brand drugs." The draft guidance applies to drugs under the new drug application process and is intended to extend that NDA pathway to include therapeutic indications that have not, historically, been available for use without a prescription, Chen writes. She keeps an Overweight rating on Perrigo with a $107 price target.

Perrigo announced that pharmaceutical company Esteve Healthcare has signed a binding offer to acquire Perrigo's HRA Pharma Rare Diseases business for a total consideration of up to EUR 275M, consisting of an upfront cash payment of EUR 190M and up to EUR 85M in potential earnout payments based on the Rare Diseases business achieving certain sales milestones. Following the information and consultation process with HRA Pharma Works Council in France, Perrigo would be able to exercise the put option granted by Esteve and enter into a definitive agreement with Esteve for the sale of the Rare Diseases business. The proposed final transaction is expected to close during the third quarter of 2024, subject to the satisfaction of the HRA Works Council consultation and customary closing conditions, including receipt of regulatory approvals.