Image source: Perrigo. 

What: Shares of Perrigo (NYSE:PRGO), an over-the-counter and generic specialty pharmaceutical company, tumbled 24% in April, according to data from S&P Global Market Intelligence. The culprit can be traced to a press release on April 25, which updated Perrigo's first-quarter results and full-year guidance and announced the resignation of its long-tenured CEO.

So what: The big news was the announcement that CEO Joseph Papa, who led Perrigo for 10 years and transformed it into the over-the-counter juggernaut that it is today, resigned in favor of taking the CEO role at Valeant Pharmaceuticals. Papa leaving is certainly not what investors expected, especially with Perrigo coming so far off its recent highs. The concern with any CEO change is that a company's strategy can take an unexpected turn with a new individual in charge. If there is some solace here, it's that Perrigo decided to appoint from within, choosing its former president, John Hendrickson, as its new CEO.

Image source: Perrigo.

The other clobbering came from Perrigo's preliminary Q1 results and full-year guidance. Perrigo guided net sales to between $1.33 billion and $1.35 billion, and anticipates adjusted EPS of $1.71-$1.77. Comparatively, Wall Street's consensus had called for EPS of $1.89. Furthermore, its full-year adjusted EPS guidance of $8.20-$8.60 is another sharp cut from its prior forecast of $9.50-$9.80 in full-year EPS. Perrigo primarily blamed pricing pressures in its prescription segment and overall competitive pressure within the sector for the reduced forecast. 

Now what: It was an awful month to be a Perrigo shareholder, and, unfortunately, it doesn't look like May will offer any refuge. Growing competition in Perrigo's generic drug business has weighed on pricing, and will likely continue to do so in the coming quarters. At the same time, as reported by Bloomberg, Perrigo's shrinking margins could precipitate Standard & Poor's to cut its credit rating even further, after already having cut it in April to BBB-, the lowest investment grade level.

Adding more fuel to the fire, specialty pharmaceutical company Endo Pharmaceuticals (NASDAQ:ENDP) drastically cut its guidance last week, falling well short of Wall Street's expectations. Endo's cautionary tale on generic pricing and margins suggests that this is an industrywide phenomenon and not just something specific to Perrigo.

For the time being, I would suggest monitoring Perrigo from the sidelines. As a large OTC and generics company, it certainly could benefit from increased demand and prescriptions over the long run. But this bump in the road could extend many quarters out.