Watson Pharmaceuticals, Inc.
(
WPI
) recently announced that it has filed an abbreviated new drug
application (ANDA) with the U.S. Food and Drug Administration (FDA)
seeking approval to market its generic version of
Warner Chilcott
's (
WCRX
) Lo Loestrin FE. Approval has been sought to market the generic
version of the drug for the prevention of pregnancy.
In response, Warner Chilcott filed a suit against Watson Pharma
in an U.S. District Court, to prevent the latter from selling its
generic version of Lo Loestrin FE prior to the expiration of the
drug's patents in the U.S.
By filing the patent infringement lawsuit, Warner Chilcott has
ensured that the ANDA cannot be cleared by the U.S. regulatory body
for up to 30 months from the date that Warner Chilcott received
notice of the ANDA filing or until the matter is resolved in court,
whichever happens earlier.
We note that the branded version of the drug was launched by
Warner Chilcott in January 2011. According to data released by IMS
Health, the drug recorded sales of approximately $86 million in the
U.S. for the twelve months ended March 31, 2012.
We note that Warner Chilcott received some disappointing news on
the generic front in April 2012 regarding the 150 mg dosage of its
dermatological product Doryx. On April 30, 2012, a U.S. district
court issued a verdict regarding
Mylan Laboratories
(
MYL
) and
Impax Laboratories
' (
IPXL
) applications to the FDA to sell their generic versions of the
drug. The court ruled that the generic versions of neither company
infringed the patent of Doryx. Following the verdict, Mylan entered
the U.S. market with its generic version of Doryx 150 mg.
Following the adverse court ruling regarding Doryx 150 mg,
Warner Chilcott trimmed its 2012 guidance. The company expects to
earn in the range of $3.30-$3.40 per share (on an adjusted basis)
on revenues between $2.4 billion and $2.5 billion. Earlier, the
company had said that it expected to end 2012 with adjusted
earnings in the range of $3.60-$3.70 per share on revenues between
$2.5 billion and $2.6 billion.
Neutral on Warner Chilcott and Watson Pharma
Currently, we are Neutral on both Warner Chilcott and Watson
Pharma in the long run. However, the short-term ratings are
different. While Warner Chilcott carries a Zacks #4 Rank (Sell
rating), Watson Pharma carries a Zacks #2 Rank (Buy rating) in the
short run.
IMPAX LABORATRS (IPXL): Free Stock Analysis
Report
MYLAN INC (MYL): Free Stock Analysis Report
WARNER CHIL PLC (WCRX): Free Stock Analysis
Report
WATSON PHARMA (WPI): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment
Research