(Reuters) - Perrigo Co Plc reported a higher-than-expected adjusted quarterly profit and said it would review strategic options for royalty rights from sales of multiple sclerosis drug Tysabri.
Shares of the Dublin-based company, which specializes in generic and over-the-counter drugs, were up about 4 percent at $86.75 in premarket trading on Thursday.
Perrigo has been under pressure from activist investor Starboard Value LP to make changes - including exploring options for Tysabri - that will boost its stock price.
Starboard disclosed a 4.6 percent stake in Perrigo in September.
The company’s stock had lost about 42 percent of its value through Wednesday’s close of $83.51 and the company has cut its earnings forecast twice.
Perrigo has blamed much of its troubles on former Chief Executive Joseph Papa who convinced investors to reject a $205 per share cash-and-stock bid from Mylan NV, worth about $26 billion when it was rejected last November.
Papa, now CEO of Valeant Pharmaceuticals International Inc, said Perrigo would be better off on its own.
Perrigo recognized $93 million of royalty revenue in the third quarter related to global net sales of Tysabri. The drug is marketed through a partnership with Biogen Inc, which paid more than $300 million in royalties to Perrigo.
Perrigo, run by CEO John Hendrickson, has hired Morgan Stanley as financial adviser to lead the review process for Tysabri.
Royalty Pharma, a privately held company that specializes in acquiring drug royalties, is among potential buyers, Reuters reported in September, citing people familiar with the matter.
Perrigo reported a net loss of $1.26 billion, or $8.76 per share, for the third quarter ended Oct. 1, compared with a profit of $113 million, or 77 cents per share, a year earlier.
The net loss includes a goodwill impairment charge of $804 million and a brand intangible assets impairment charge of $866 million related to its $3 billion acquisition of Belgian over-the-counter drugmaker Omega Pharma.
On an adjusted basis, the company earned $1.80 per share, beating analysts’ average estimate of $1.58, according to Thomson Reuters I/B/E/S.
Revenue rose 1 percent to $1.35 billion, including sales of $22 million from held-for-sale businesses. Analysts on average were expecting revenue of $1.28 billion.
The company said it expected to report a net loss of $9.04 to $9.34 per share for all of 2016.
Reporting By Aurindom Mukherjee and Akankshita Mukhopadhyay in Bengaluru; Editing by Gopakumar Warrier and Ted Kerr