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Good News for Warner Chilcott - Analyst Blog

Posted
4/15/2013 5:50:00 PM
By: Zacks.com
Referenced Stocks:IPXL;MYL;QLTI;WCRX

Warner Chilcott plc ( WCRX ) recently received encouraging news from the US Food and Drug Administration (FDA) when the regulatory agency approved the company's acne drug Doryx at 200 mg strength (delayed release tablets). The company intends to launch the 200 mg version of the drug in Jul 2013.

We are positive on the approval of Doryx (200 mg) as it has extended the life cycle of the drug at Warner Chilcott, following the genericization of the 150 mg dosage of Doryx last year. We note that Doryx, the sole dermatological offering at Warner Chilcott, has been facing declining sales following its genericization.

On Apr 30, 2012, a US district court issued a verdict regarding Mylan ( MYL ) and Impax Laboratories ' ( IPXL ) applications to the FDA to sell their generic versions of 150 mg of Doryx. The court ruled the generic versions of neither of the companies infringed the patent of Doryx. Following the verdict, Mylan entered the US market with its generic version of Doryx 150 mg in May 2012.

Doryx sales declined 58.7% to $19 million in the final quarter of 2012 due to competition from generics. Sales in 2012 declined 46.8% to $92 million. The approval of the 200 mg dosage of the drug should go a long way in arresting the declining trend.

We note that in Feb 2013, Warner Chilcott gained another FDA approval when the US regulatory body cleared the company's ulcerative colitis drug Delzicol (mesalamine).

Warner Chilcott currently carries a Zacks Rank #3 (Hold). QLT Inc. ( QLTI ) is a favorably placed company, in the pharma space, carrying a Zacks Rank #1 (Strong Buy).



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