Perrigo applies for FDA approval (PRGO)
Perrigo said its HRA Pharma subsidiary applied for the approval of Opill, its daily birth control pill, for OTC sale. Since OTC birth control is not currently on the market and there is no existing monograph, Perrigo will have to seek approval from the FDA. Once the research on the drug determines it is safe, the approval process is said to take six months. The typical process takes about ten months. Opill is a non-estrogen pill that has been approved since 1973 for use with a prescription. Non-estrogen pills have fewer regulatory concerns than combination pills containing estrogen and progestin. 76% of women who participated in a survey felt they would benefit if they could receive their birth control pills from a pharmacist instead of requiring a physician visit. More women continued their medication regimen by receiving their pills from a pharmacy without a physician instead of through a clinic, according to another study. After FDA approval, it will take months, not years, before the product hits retailers’ shelves. Opill’s approval is one of several sources of upside to Perrigo’s EPS estimates over the next year. The approval process has been seven years in the making for HRA Pharma. Perrigo would have the market to itself for some time.
On-premise growth is vulnerable (TAP)
According to CGA, U.S. on-premise sales velocity increased 7% YOY for the week ended June 25, as seen in the chart below. Sales velocity trends have decelerated, with the latest 12-week period growing 25% YOY. According to BeverageTrak, the check value increased 8% YOY while the number of tickets decreased 1%. Texas and Florida were down YOY, while California, Illinois, and New York were up. The differences between states indicate the contribution of lapping on-premise restrictions last year. We have seen casual dining sales also decelerate, as Howard Penney reported in a note yesterday. On-premise growth is being driven by pandemic restriction base effects which make the underlying growth vulnerable to declines as the inflation headwinds for the consumer continues to build.
Alcohol imports accelerate (STZ)
Total beverage alcohol imports grew 18% over the 12 months ended May. Over the last three months, imports grew 37%, accelerating from the 21% growth in the three months ended March.
- Imported beer grew 4% by volume and 7% by value over the last 12 months. Over the last three months, beer imports grew 6% by volume and 10% by value, decelerating from 12% growth by volume and 16% by value in the three months ended April. In the month of May, beer imports decreased 0.6%, with YTD imports up 6.1%. Mexican imports slowed to 5.5% YOY growth from 10.6% in April. 79% of imported beer comes from Mexico. Constellation Brands represents a majority of Mexican beer imports and 60% of imported beer.
- Imported packaged wine for the last 12 months grew 23% by value. Over the last three months, volumes decreased 12% and by value grew 6%, flat from the three months ended April.
- Imported packaged spirits grew 27% by value over the last 12 months. Over the last three months, volumes grew 18% and value grew 31%. That compares to 21% volume growth and 37% value growth over the three months ended in April.
Exported beer grew 7% by value over the last 12 months. Over the last three months, exported beer grew 8% by volume and 57% by value. Exported packaged wine grew 20% by volume and 17% by value over the last three months. Constellation Brands’ shipments were up 17% in the quarter ended May, well above trend. Management attributed the strength to lapping supply challenges from weather impacts. Shipments appear to be normalizing in May after distributor sales to retailers only grew 0.4% in April. With distributor sales to retailers accelerating in May, shipments should follow.
