Generic drug maker Watson Pharmaceuticals Inc. (WPI) is scheduled to report first-quarter results before the market opens Monday.
Watson is engaged in the development, manufacturing and sale of branded as well as off-patent drugs. The company has products for therapeutic categories, such as central nervous system, hormones and synthetic substitutes, cardiovascular, nephrology, and gastrointestinal.
Corona, California-based Watson operates in three segments: Global Generic, Global Brand, and Distribution. In fiscal 2009, of the total revenues of $2.793 billion, Global Generic generated $1.668 billion and Global Brand brought in $461 million. The Distribution segment's net revenue was $663.8 million in 2009.
In the just concluded quarter, Watson received the FDA's approval for its Trelstar 22.5 mg, a new twice-yearly formulation, indicated in the palliative treatment of prostate cancer. The drug is expected to be launched in May.
The company also received the FDA's approval for its abbreviated new drug application for generic Cardizem LA product indicated for the treatment of hypertension.
Late last week, Watson and larger rival Teva Pharmaceutical Industries Ltd. (TEVA) reached a settlement on a patent litigation related to Teva's birth control drug Seasonale. Watson makes Quasense, a generic equivalent of Seasonale. As per the settlement agreement, Teva granted Watson a fully paid-up license to the U.S. patents covering Seasonale and Watson would continue marketing Quasense.
On average, 16 analysts polled by Thomson Reuters expect Watson to have earned $0.74 per share in the first quarter, with estimates ranging between $0.69 and $0.78 per share. Revenue for the quarter is estimated to be $829.49 million. Analysts' estimates typically exclude special items.
In the first quarter of the previous fiscal, Watson earned $49.1 million, or $0.43 per share. The results included items related to Global Supply Chain initiative, loss on securities, gain on asset sales, and legal settlements. Adjusted net income for the first quarter was $66.5 million, or $0.58 per share. Revenue rose 6% from the previous year to $667.4 million.
In the fourth quarter of fiscal 2009, the company's net income was $56.9 million or $0.51 per share. Adjusted for Global Supply Chain initiative, acquisition and licensing charges, legal settlements and amortization, earnings were $94.4 million or $0.85 per share. Revenue in the quarter increased 22% to $785.7 million.
While announcing the fourth-quarter results, Watson said it continues to expect cash earnings per share between $3.05 and $3.30 in 2010. The company is likely to update this outlook today.
Among peers, Teva last week reported a 58% rise in first-quarter profit, as sales increased 16% from the prior year, helped partly by the continued strong performance of multiple sclerosis drug Copaxone. The Petach Tikva, Israel-based company reported net income attributable to Teva of $713 million or $0.79 per share in the first quarter, up from $451 million or $0.51 per share last year. Net sales for the quarter rose to $3.653 billion from $3.147 billion in the year-ago quarter.
Mylan Inc. (MYL), another generic drug maker, recently said first-quarter net earnings attributable to its common shareholders declined to $61.098 million or $0.20 per share from $71.30 million or $0.23 per share in the prior year period. Total revenues increased 7% to $1.292 billion from $1.21 billion in the comparable period.
WPI closed Friday's regular trade at $41.99, down $0.38 or 0.90%, on 3.58 million shares. For the past year, the stock traded in the range of $28.06-$43.76.
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