Watson-Amgen to Develop Biosimilars - Analyst Blog

Watson Pharmaceuticals Inc. ( WPI ) and Amgen Inc. ( AMGN ) recently announced a collaboration agreement for the worldwide development and commercialization of oncology antibody biosimilar medicines.

According to the agreement, Amgen will be responsible for developing, manufacturing and initially commercializing the products. Watson Pharma will contribute $400 million towards the co-development of the biosimilars, which will include the provision of development support, along with sharing product development risks. Moreover, Watson Pharma will use its significant expertise for the commercialization and marketing of products, together with effectively managing the lifecycle of the biosimilar products.

The products developed under the collaboration will be sold under a joint Amgen/Watson label. Also, as a part of the collaboration, Watson Pharma will initially receive royalties and sales milestones from product revenues. Meanwhile, the terms of the collaboration prohibit the production of any biosimilars of Amgen's proprietary products.

We believe that this deal will help expand Watson Pharma's biosimilar and generic portfolio, which will help drive the company's long-term growth.

An Eventful Month

So far it has been quite an eventful month for Watson Pharma. Earlier during the month, Watson Pharma, along with partner Antares Pharma Inc. ( AIS ), announced the US approval of topical oxybutynin gel 3%. The US Food and Drug Administration (FDA) approved the drug for treating patients suffering from overactive bladder (OAB). By virtue of an exclusive licensing agreement, Watson Pharma plans to launch the drug in 2012.

Also this month, Watson Pharma announced the launch of a generic version of Teva Pharmaceutical Industries Ltd. 's ( TEVA ) LoSeasonique. The drug is used for the prevention of pregnancy. The launch of the generic drug took place as a part of a settlement agreement between the two companies.

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

ANTARES PHARMA ( AIS ): Free Stock Analysis Report

AMGEN INC ( AMGN ): Free Stock Analysis Report

TEVA PHARM ADR ( TEVA ): Free Stock Analysis Report

WATSON PHARMA ( WPI ): Free Stock Analysis Report

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

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

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