Jul. 22--The disaster that is Michigan's economy has not squeezed the value out of every company in the state.

Stocks of Kalamazoo-based Stryker Corp., Detroit-based Compuware Corp. and even automotive supplier BorgWarner Inc. of Auburn Hills are all trading at prices about 50% higher today than they were two years ago. The Standard & Poor's 500 index has been flat over the same period.

Outshining all major Michigan stocks over that period, however, has been Perrigo Co. of Allegan, a pharmaceutical outfit that makes 30 billion pills a year. It is fast approaching annual sales of $2 billion and has seen value of its stock grow 140% during the past two years.

So why do most of us know so little and hear so little about Perrigo? A couple of reasons:

--All of the pills and bottles of cough syrup and liquid antacids it makes are sold to consumers under other names, as store-brand, over-the-counter drugs, by Wal-Mart, CVS, Kroger and hundreds of other retailers.

--Perrigo's hometown, where nearly half of its 6,400 worldwide employees work, is nestled in a quiet corner of southwest Michigan, 169 miles west of Detroit and 151 miles around the bend of Lake Michigan from Chicago.

Even when the company makes major news, as it did last week by announcing an expansion that will create 400 very welcome jobs in Michigan, Perrigo gets overshadowed. On the same day as Perrigo's expansion news, General Motors Corp. unveiled its $15-billion plan to avert bankruptcy and Dow Chemical revealed it will build a Detroit-area headquarters with 800 jobs for its K-Dow joint venture with a Kuwaiti oil company.

Joseph Papa, chairman and CEO of Perrigo, told me last week that he sees lots of growth potential for his small-town company, even though it already has a whopping 65% market share in the store-brand drug business.

Perrigo looked at New York and New Jersey as possible spots to expand -- "they have a good talent pool out there," Papa said -- but he has been pleased during his 22 months at Perrigo's helm at the combination talent and a business culture in west Michigan that helps the firm produce sophisticated products at low cost.

"Baby boomers are just starting to enter their 60s," Papa said, "and at the same time, in a challenged economy, they find they can't afford the name-brand health care products. We see a solution in store brands, which the retailers like because the store brand gives them a better profit margin and the customer a lower price."

To keep Perrigo's dominant position as a supplier of store-brand drugs, Papa is stressing quality and speed to market new products as patent protection for big-name prescription drugs expires.

In March, Perrigo was first to market in the United States with Omeprazole, the generic form of heartburn drug Prilosec OTC.

The company has boosted its capital spending budget from just above $25 million in 2004 to $70 million this year.

Perrigo might not get a lot of fanfare out in laid-back Allegan, but maybe that's part of the secret -- avoiding all the noise and rancor of dysfunctional metro Detroit.

David Sowerby, portfolio manager for Loomis, Sayles & Co. in Bloomfield Hills, said Perrigo is "pound for pound, one of the top companies in Michigan. It's exactly what we need more of."

Amen to that.

Contact TOM WALSH at 313-223-4430 or twalsh@freepress.com.

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Story Source: Detroit Free Press