Watson hits 2010 running

Watson Pharmaceuticals has had a busy start to 2010, with a number of events underscoring its future plans. On 28th January 2010, Watson announced that it had completed its acquisition of Eden Biopharm, in a deal worth some US$15 million. The acquisition of the Liverpool, UK-based Eden was part of Watson's larger acquisition of the Arrow Group; Arrow had owned a 36% stake in the firm, a biopharmaceutical development and contract manufacturing company. Eden will become part of Watson's Global Brands Division, maintaining its contract services model whilst providing Watson with biopharmaceutical development and manufacturing capabilities; something which must surely have been a bonus to Watson in its plans to acquire Arrow. A week before, Watson held an Investor Day meeting in New York in which the firm provided an overview of its expanded global operations, during which the firm reported that it expected 2010 revenues to be worth around US$3.5 billion, substantially up on the US$2.5 billion it reported for 2008. Much of the boost will come from the acquisition of Arrow, which Watson is to use to reshape its generics business. The acquisition will give Watson a presence in a number of international markets, whereas before the firm has concentrated its business in the United States. Watson believes its generics business will account for sales worth some US$2.3 billion in 2010.

On 1st February 2010, India's Indoco Remedies announced that it had finalised a generic product development alliance with Watson to develop and manufacture a number of sterile products for the US market. Indoco did not comment on what those products were, but noted that they formed a sizeable chunk of revenues. Indoco will develop, manufacture and supply the products, whilst Watson will deal with the regulatory issues to get them approved, and will then market, sell and distribute them across the US. The agreement was a significant deal for Indoco, giving the firm an alliance with a sizeable generic company. However, it was also an interesting move for Watson: forming an alliance with an Indian firm is not a common occurrence for the firm, and is perhaps a taster of the direction Watson will be moving in.

On the same day, Watson announced that it had entered into a licensing agreement with HRA Pharma through which Watson would become the commercial partner for ulipristal acetate in the US. The product is already marketed by HRA in Europe, and has been filed in the US as an NDA. Watson will make payments to HRA, and the firm commented that the move fitted in with its strategy to expand its position in the women's healthcare market. The agreement will no doubt also add to Watson's innovative products division, a much smaller part of the company than its generics division, but nonetheless significant for the firm.

In a related vein, on 8th January 2010, Watson filed an ANDA with the FDA for a generic version of Duramed's oral contraceptive, LoSeasonique. The ANDA was filed towards the end of 2010, and has led to a patent infringement lawsuit being filed against Watson in the US District Court for the District of New Jersey. Duramed was part of Barr Pharmaceuticals, which of course is now part of Teva, leading to the spectacle of one generic company suing another for alleged patent infringement. This is potentially one of two lawsuits Watson will start the New Year with. On 19th January 2010, Endo Pharmaceuticals announced that it was in receipt of notification that Watson had filed an ANDA for a generic version of Lidoderm, a lidocaine topical patch. At the time of writing, Endo had yet to say whether it would file a lawsuit against Watson as a result, but it seems that this will be a likely course of action. Watson has certainly started the year with a sense of determination.

Ian Platts – Editor, World Generic Markets