Watson Pharmaceuticals Inc. Reports Operating Results (10-Q)
Watson Pharmaceuticals Inc. has a market cap of $6.26 billion; its shares were traded at around $50.36 with a P/E ratio of 16.8 and P/S ratio of 2.3. Watson Pharmaceuticals Inc. had an annual average earning growth of 6% over the past 10 years. GuruFocus rated Watson Pharmaceuticals Inc. the business predictability rank of 4-star.WPI is in the portfolios of Francis Chou of Chou Associates Management Inc., Edward Owens of Vanguard Health Care Fund, Louis Moore Bacon of Moore Capital Management, LP, Paul Tudor Jones of The Tudor Group, Steven Cohen of SAC Capital Advisors, Mario Gabelli of GAMCO Investors.
Highlight of Business Operations: Net revenues from our Global Generics segment during the three months ended September 30, 2010 increased 45.1% or $179.6 million to $577.6 million compared to net revenues of $398.0 million in the prior year period. The increase in net revenues was mainly attributable to an increase in international product sales ($88.7 million) as well as revenue from new product launches in 2010 ($18.1 million), increases in sales of certain extended release products ($61.7 million) and an increase in other revenue ($5.9 million) partially offset by lower pricing on certain products.
R&D expenses within our Global Generics segment increased 46.3% or $17.1 million to $54.1 million for the three months ended September 30, 2010 compared to $37.0 million in the prior period. This increase in R&D expenses was mainly due to increased international R&D expenditures ($18.9 million), (including those of the recently acquired Arrow Group), partially offset by reduced R&D expenditures in certain domestic locations.
Net revenues from our Global Brands segment for the three months ended September 30, 2010 decreased 11.5% or $13.0 million to $99.7 million compared to net revenues of $112.7 million in the prior year period. The decrease in net revenues was primarily attributable to the loss of Ferrlecit® ($25.4 million), as our distribution rights for Ferrlecit® terminated on December 31, 2009. The decline in revenues from the loss of Ferrlecit® was partially offset by higher sales of Rapaflo®, Gelnique®, Androderm®, sales from our recently acquired progesterone business (acquired from Columbia Laboratories, Inc. (Columbia) during the quarter) and higher other revenues.
R&D expenses within our Global Brands segment increased 45.3% or $6.8 million to $21.7 million compared to $14.9 million in the prior year period primarily due to higher milestone payments in the current quarter ($5.5 million) and increased international R&D expenditures from recently acquired Eden ($2.2 million) which was partially offset by lower clinical spending in the current period.
Net revenues from our Distribution segment for the three months ended September 30, 2010 increased 35.4% or $53.7 million to $205.1 million compared to net revenues of $151.4 million in the prior year period primarily due to an increase in new product launches ($48.3 million).
Corporate general and administrative expenses increased 172.0% or $103.4 million to $163.5 million compared to $60.1 million from the prior year period primarily due to an accrual during the period for a proposed legal settlement ($89.9 million) and international general and administrative expenses for the quarter ($15.5 million).
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