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Warner Chilcott Ltd. Reports Operating Results (10-Q)

August 07, 2009 | About:
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Warner Chilcott Ltd. (WCRX) filed Quarterly Report for the period ended 2009-06-30.

WARNER CHILCOTT is a leading specialty pharmaceutical company focused on developing manufacturing and marketing and selling branded prescription pharmaceutical products in women\'s healthcare and dermatology in the United States. They have established strong franchises in these two areas through their precision marketing techniques and specialty sales forces of approximately four representatives.They believe that their proven product development capabilities coupled with their ability to execute acquisitions and in-licensing transactions and develop partnerships Warner Chilcott Ltd. has a market cap of $4.02 billion; its shares were traded at around $15.99 with a P/E ratio of 10.8 and P/S ratio of 4.3.

Highlight of Business Operations:

Net sales of our oral contraceptive products increased $4.2 million, or 5.6%, in the quarter ended June 30, 2009 and $12.2 million, or 8.9%, in the six months ended June 30, 2009, compared with the prior year periods. LOESTRIN 24 FE generated revenues of $58.0 million in the quarter ended June 30, 2009, an increase of 15.5%, compared with $50.2 million in the prior year quarter. During the six months ended June 30, 2009, LOESTRIN 24 FE generated revenues of $110.4 million, an increase of 13.7%, compared with $97.1 million in the prior year period. The increase in LOESTRIN 24 FE net sales in both periods was primarily due to higher average selling prices and increases in filled prescriptions of 10.3% and 9.2% in the quarter and six months ended June 30, 2009, respectively, offset in part by the impact of higher sales-related deductions and a contraction of pipeline inventories relative to the prior year periods. FEMCON FE generated revenues of $12.4 million and $25.3 million in the quarter and six months ended June 30, 2009, respectively, compared to $10.7 million and $21.5 million in the prior year periods. The increase in FEMCON FE net sales in the quarter and six months ended June 30, 2009 was primarily due to higher average selling prices and increases in filled prescriptions of 6.3% and 10.9%, respectively, compared to the prior year periods, offset in part by a contraction of pipeline inventories relative to the prior year periods.

Net sales of our dermatology products increased $11.3 million, or 10.9%, in the quarter ended June 30, 2009 and $21.1 million, or 10.1%, in the six months ended June 30, 2009, compared with the prior year periods. Net sales of DORYX increased $13.2 million, or 41.6%, in the quarter ended June 30, 2009, compared to the prior year quarter, primarily due to a 41.6% increase in filled prescriptions and an expansion of pipeline inventories compared to the prior year period, which was offset in part by higher sales-related deductions. The increase in filled prescriptions primarily relates to DORYX 150 mg, which we launched in the third quarter of 2008 and to which we have dedicated significant promotional efforts, including our recently launched customer loyalty card program. Increased utilization of the customer loyalty card for DORYX 150 mg drove an increase in sales-related deductions in the 2009 periods. Net sales of DORYX increased $28.5 million, or 42.6%, in the six months ended June 30, 2009, compared to the prior year period, primarily due to a 31.9% increase in filled prescriptions, as well as higher average selling prices, which were offset in part due to higher sales-related deductions. Net sales of TACLONEX decreased $2.3 million, or 5.9%, to $36.5 million in the quarter ended June 30, 2009, compared to $38.8 million in the prior year quarter. Net sales of TACLONEX decreased $2.7 million, or 3.4%, to $73.1 million in the six months ended June 30, 2009, compared to $75.8 million in the prior year period. The decrease in sales in the quarter and six months ended June 30, 2009 is primarily due to a decline in filled prescriptions of 5.7% and 4.5%, respectively, as well as higher sales-related deductions, offset in part by the impact of higher average sales prices. Net sales of DOVONEX were relatively flat in the quarter ended June 30, 2009 as compared to the prior year quarter, and decreased by $4.7 million, or 7.0%, in the six months ended June 30, 2009, compared with the prior year period. The decline in DOVONEX net sales in the six months ended June 30, 2009 was due primarily to decreases in filled prescriptions of 24.6%, offset in part by higher average selling prices and an expansion of pipeline inventories relative to the prior year period. The decline in filled prescriptions was due primarily to customers switching to other therapies, as well as the introduction of generic versions of DOVONEX Solution into the market in the second quarter of 2008, including our authorized generic product. We expect DOVONEX net sales to continue to decline due to competition from other therapies and generic competition, specifically related to DOVONEX Solution.

Net sales of our hormone therapy products increased $3.9 million, or 9.1%, in the quarter ended June 30, 2009 and $4.5 million, or 5.2%, in the six months ended June 30, 2009, compared with the prior year periods. Net sales of ESTRACE Cream increased $7.0 million, or 33.1%, and $11.0 million, or 27.2%, in the quarter and six months ended June 30, 2009, respectively, compared to the prior year periods. We began promotional efforts for ESTRACE Cream in early 2009. As a result, the increases in net sales were primarily due to an increase in filled prescriptions of 21.2% and 18.3% in the quarter and six months ended June 30, 2009, respectively, and higher average selling prices. Net sales of FEMHRT decreased $3.3 million, or 19.9%, and $6.6 million, or 20.3%, in the quarter and six months ended June 30, 2009, respectively, compared to the prior year periods. Filled prescriptions of FEMHRT decreased 12.0% and 13.4% in the quarter and six months ended June 30, 2009, respectively. Also contributing to the decline in FEMHRT net sales was a contraction of pipeline inventories relative to the prior year periods. The resulting decrease in net sales was partially offset by higher average selling prices compared to the prior year periods.

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