Watson Pharmaceuticals Inc. (WPI) recently confirmed that it has filed an Abbreviated New Drug Application (ANDA) with the US Food and Drug Administration (FDA) seeking approval to market the generic version of GlaxoSmithKilne’s (GSK) benign prostatic hyperplasia (BPH) treatment, Jalyn.
In response, Glaxo has filed a lawsuit against Watson Pharma in the United States District Court for the District of Delaware. Since Glaxo filed a suit within 30 days of the ANDA filing, the FDA cannot approve Watson Pharma’s generic Jalyn (dutasteride and tamsulosin hydrochloride capsules) until December 30, 2013 or until the court ruling, whichever is earlier.
According to IMS Health, Jalyn sales amounted to $30 million for the twelve months ended May 31, 2011.
We remind investors that the company has made a number of generic filings in the recent past. Last month, Watson Pharma filed ANDAs with the FDA to market the generic version of Glaxo’s Avodart, indicated for the treatment of 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 Novartis 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.
Also last month, the FDA approved Watson Pharma’s generic version of Pfizer Inc.’s (PFE) oral contraceptive Lybrel. Moreover, the company filed an ANDA with the FDA to market the generic version of Pfizer’s erectile dysfunction (ED) drug, Viagra (sildenafil citrate) tablets.
Outperform on Watson
We currently have an Outperform recommendation on Watson Pharma. The stock carries Zacks #1 Rank (Strong Buy rating) in the short-run. 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.
