Watson Pharmaceuticals Inc. (WPI) recently announced that it has filed Abbreviated New Drug Applications (ANDA) with the US Food and Drug Administration (FDA) to market its generic version of GlaxoSmithKline plc’s (GSK) Avodart, indicated for the treatment of benign prostatic hyperplasia (BPH), and Novartis AG’s (NVS) Pataday 0.2%, indicated for the treatment of ocular itching that is associated with allergic conjunctivitis.
In response, Glaxo filed a lawsuit against Watson Pharma in the United States District Court for the District of Delaware, and Alcon filed a lawsuit against Watson Pharma in the United States District Court for the Southern District of Indiana. Since both companies filed a suit within 30 days of the ANDA filing, the FDA cannot approve Watson Pharma’s generic Avodart and generic Pataday until November 17, 2013 and October 29, 2013, respectively, or until the court ruling, whichever is earlier.
According to IMS Health, Avodart sales amounted to $580 million and Pataday sales came in at $224 million, for the twelve months ended April 30, 2011.
Additionally, Watson Pharma said that the FDA approved its generic nabumetone for the treatment of osteoarthritis and rheumatoid arthritis. The company plans to launch the generic drug shortly in 500 mg and 750 mg dosage formulations.
Meanwhile, earlier this month, the FDA had approved Watson Pharma’s generic version of Pfizer Inc.’s (PFE) oral contraceptive Lybrel. Also this month, the company filed an ANDA with the FDA to market its generic version of Pfizer’s erectile dysfunction (ED) drug, Viagra (sildenafil citrate) tablets.
Our View
We currently have a Neutral recommendation on Watson Pharma, which carries a Zacks #3 Rank (short-term Hold rating). We expect the new generic product launches over regular intervals to help drive the company’s Global Generic segment’s sales, which are expected in the range of $2.9 billion to $3.1 billion in 2011. First quarter 2011 Global Generics sales amounted to $600.0 million, representing a year-over-year increase of 10%.
GLAXOSMITHKLINE (GSK): Free Stock Analysis Report
NOVARTIS AG-ADR (NVS): Free Stock Analysis Report
PFIZER INC (PFE): Free Stock Analysis Report
WATSON PHARMA (WPI): Free Stock Analysis Report
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