Aaron Katsman
www.IsraelNewsletter.com

Perrigo (PRGO) a company that develops, manufactures and distributes over-the-counter and prescription pharmaceuticals, announcedthat they received approval from the FDA to market for a Nicotine based smoking cessation gum.

This is another in a long line of wins the company has experienced of late. Shares of Perrigo have bucked the market trend over the last 6 months and have continued to move sharply higher. Commenting on the news, CEO Joseph C. Papa said, “This approval of orange-flavored, coated nicotine gum extends our leading store brand position. Our expanded range of smoking cessation products also includes coated mint-flavored gum, coated fruit-flavored gum, uncoated gum and lozenges.”

The estimated market for over-the-counter nicotine gum and lozenge products is around three quarters of a billion dollars. So this is clearly a big potential earnings  driver for the company.

I have never smoked so I have no idea what it’s like to try and stop. But from what I understand, the hardest part is trying to break the cravings from nicotine addiction as well as certain activities that you do when smoking. That those activities ‘call’ for you to smoke.  The nicotine gum helps negate the cravings associated with smoking, freeing you up to work on your ability to do certain activities without smoking.

As someone who chews gum like it’s going out of style, but also can’t refuse a cheese danish, I hope they come out with a gum, that helps cut the craving for eating and helps you to lose weight.

Disclosure: Author’s fund has a position in PRGO, fund has no position in any other stock mentioned as of 4/25/08.

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Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.

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