Watson Pharmaceuticals Inc.
) recently announced the filing of a lawsuit against the US Food
and Drug Administration (FDA), challenging the regulatory body's
decision related to Watson's entitlement to the shared exclusivity
for its generic version of
Takeda Pharmaceutical Co. Ltd.
) diabetes drug, Actos.
Actos (pioglitazone hydrochloride - 15mg, 30mg and 45mg tablets)
is used for the treatment of type II diabetes in patients.
Due to the FDA's decision, Watson's Abbreviated New Drug
Application (ANDA), which was filed in 2003, can now get delayed by
up to six months. The company filed the lawsuit after the
discussions with the FDA failed to resolve the dispute and ensure
timely approval of the drug.
Watson stated that the FDA had improperly denied the company's
shared exclusivity for Actos, in spite of the company complying
with the FDA's requirements received from the latter regarding its
Paragraph IV certification.
As per IMS Health, US sales of Actos amounted to $2.7 billion,
for the twelve months ended May 31, 2012.
We note that Watson intended to launch generic Actos on August
17, 2012 based on the prior settlement agreement with Takeda on
March 10, 2010. Watson believes it is entitled to share a 180-day
period of generic marketing exclusivity under the provisions of the
However, Watson said that even if the FDA fails to approve its
ANDA for generic Actos, it will still be able to achieve its full
year 2012 guidance of $5.5 billion. It would result from recent
favorable regulatory updates of other generic drugs along with
improved condition in the US generics market.
We currently have a Neutral recommendation on Watson Pharma. The
stock carries a Zacks #2 Rank (Buy rating) in the short run.
We expect new generic product launches over regular intervals to
help drive the company's Global Generic segment sales which climbed
26% during second quarter 2012 to $995 million, driven by the
generic launch of
) Lipitor and
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