Watson Pharmaceuticals Inc. (WPI) filed Quarterly Report for the period ended 2009-09-30.
Watson Pharmaceuticals Inc. is a pharmaceutical company primarily engagedin the development production marketing and distribution of both branded and off-patent pharmaceutical products. The company's branded pharmaceutical business operates primarily in three specialty areas: Dermatology Women's Health and General Products. The company's products include therapeutic and preventive agents generally sold by prescription or over-the-counter for the treatment of human diseases and disorders. Watson Pharmaceuticals Inc. has a market cap of $3.68 billion; its shares were traded at around $34.83 with a P/E ratio of 15.8 and P/S ratio of 1.5. Watson Pharmaceuticals Inc. had an annual average earning growth of 6.8% over the past 10 years. GuruFocus rated Watson Pharmaceuticals Inc. the business predictability rank of 2-star.
Highlight of Business Operations:
the third quarter of 2008 ($76.0 million) offset in part by a decrease in other revenue ($5.9 million) and lower sales of certain products introduced in the prior year ($26.1 million).
Generic segment R&D expenses increased 16.6% or $5.3 million to $37.0 million in the three months ended September 30, 2009 compared to $31.7 million in the prior year quarter primarily due to higher biostudy costs ($5.6 million).
Net revenues from our Brand segment for the three months ended September 30, 2009 increased 6.4% or $6.7 million to $112.7 million compared to net revenues of $106.0 million in the prior year period. The increase was primarily attributable to higher sales within the Specialty Products product line ($7.4 million) and higher other revenues ($4.9 million). These increases were partially offset by lower sales within the Nephrology/Medical product line ($5.6 million).
Cost of sales for our Brand segment decreased 31.6% or $9.5 million to $20.7 million in the three months ended September 30, 2009 compared to $30.2 million in the prior year period. The decrease in cost of sales was primary related to a $7.7 million inventory reserve recorded in the third quarter of 2008 for potential quality issues involving certain batches of API for INFeD®.
Net revenues from our Distribution segment for the three months ended September 30, 2009 decreased 11.4% or $19.5 million to $151.4 million compared to net revenues of $170.9 million in the prior year period. The decrease was primarily due to lower levels of new product launches in the current year quarter ($15.8 million) compared to the prior year period along with price erosion and volume decreases in the current quarter. This reduction in net revenues was partially offset by higher levels of sales in the third party brand product category ($24.4 million).
Corporate general and administrative expenses increased during the three months ended September 30, 2009 as the prior year period was favorably impacted by the settlement of a tax-related liability ($5.9 million) and the current year period included higher litigation expenses ($3.9 million), a legal settlement ($3.5 million) and higher acquisition costs ($2.4 million).
WPI is in the portfolios of Edward Owens of Vanguard Health Care Fund.
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