Watson Brings Lipitor's Generic - Analyst Blog

By
A A A

In what seems like one of the biggest generic launches in the history of US, Watson Pharmaceuticals, Inc. ( WPI ) announced the launch of an authorized generic version of Pfizer Inc. 's ( PFE ) drug, Lipitor. Pfizer markets Lipitor as an adjunct to diet to reduce elevated total cholesterol, LDL (bad cholesterol), triglycerides and to increase HDL (good) cholesterol.

According to the supply and distribution agreement, Pfizer will manufacture and supply all dosage strengths of the authorized generic product to Watson Pharma, who, thereafter, will market and distribute the same in the US. In return, Pfizer will receive a share of the net sales from Watson Pharma. The agreement, which runs until November 30, 2016, is expected to add about 48 to 53 cents per share to Watson Pharma's 2011 earnings.

According to IMS Health, Lipitor sales amounted to $7.8 billion for the twelve months ended September 30, 2011.


Earlier during the week, Watson Pharma announced that the US Food and Drug Administration (FDA) approved its abbreviated new drug application (ANDA) for Bayer 's ( BAYRY ) oral contraceptive pill Yaz. We note that Watson Pharma and Bayer are currently involved in a patent litigation lawsuit concerning this product.

According to IMS Health, Yaz sales came in at $173 million for the twelve months ended September 30, 2011.

Our View

We currently have an Outperform recommendation on Watson Pharma. The stock carries a Zacks #2 Rank (Buy rating) in the short run.

We expect the new generic product launches over regular intervals to help drive the company's Global Generic segment's sales, which climbed 39% during the third quarter of 2011 amounting to $802.5 million. Additionally, we expect Watson Pharma's 2011 results to be positively impacted by the sales of generic versions of Concerta and Lipitor.


 
BAYER A G -ADR ( BAYRY ): Free Stock Analysis Report
 
PFIZER INC ( PFE ): Free Stock Analysis Report
 
WATSON PHARMA ( WPI ): Free Stock Analysis Report
 
Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: BAYRY , PFE , WPI

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Stocks

Referenced

87%

Most Active by Volume

33,974,386
  • $17.98 ▲ 0.28%
20,763,901
  • $91.29 ▲ 2.06%
19,110,793
  • $7.26 ▼ 1.22%
18,528,869
    $8.33 unch
18,014,920
  • $4.19 ▼ 1.18%
16,448,919
  • $25.83 ▼ 0.19%
14,748,190
  • $7.60 ▼ 1.43%
14,144,383
  • $112.01 ▼ 0.47%
As of 12/24/2014, 02:12 PM


Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com