Watson Pharmaceuticals Inc. (WPI, Financial) filed Quarterly Report for the period ended 2010-03-31.
Watson Pharmaceuticals Inc. has a market cap of $5.23 billion; its shares were traded at around $41.99 with a P/E ratio of 15.55 and P/S ratio of 1.87. 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 Edward Owens of Vanguard Health Care Fund, Jim Simons of Renaissance Technologies LLC, Jeremy Grantham of GMO LLC, Steven Cohen of SAC Capital Advisors.
R&D expenses within our Global Generic segment increased 40.5% or $12.1 million to $42.2 million for the three months ended March 31, 2010 compared to $30.1 million from the prior period. This increase in R&D expenses was mainly due to increased international R&D expenditures, ($15.2 million), (including those of the recently acquired Arrow Group), partially offset by lower test chemical costs ($2.0 million) and lower costs due to the implementation of our Global Supply Chain Initiative ($1.0 million).
Net revenues from our Global Brand segment for the three months ended March 31, 2010 decreased 18.5% or $20.7 million to $91.3 million compared to net revenues of $112.0 million from the prior year period. The decrease in net revenues was primarily attributable to the loss of Ferrlecit® ($35.8 million), as our distribution rights for Ferrlecit® terminated on December 31, 2009. The decline in revenues by the loss of Ferrlecit® was partially offset by sales of new products, including Rapaflo® and Gelnique®, incremental sales of certain non-promoted products and higher other revenues.
R&D expenses within our Global Brand segment increased 41.3% or $5.1 million to $17.3 million compared to $12.2 million from the prior year period primarily due to a $3.0 million milestone payment in the current year period, higher clinical spending ($0.7 million) and higher labor costs ($0.7 million).
Selling and marketing expenses within our Global Brand segment decreased 11.9% or $4.4 million to $32.5 million compared to $36.9 million from the prior year primarily due to lower promotional costs due to the loss of Ferrlecit® ($1.9 million) and lower field force personnel-related costs ($2.5 million).
Corporate general and administrative expenses increased 8.0% or $5.5 million to $74.4 million compared to $68.9 million from the prior year period due to higher international general and administrative expenses for the quarter ($11.3 million), higher legal and personnel costs ($4.5 million) and acquisition and integration costs related to the Arrow Acquisition ($4.3 million). The increases in general and administrative expenses were partially offset by a decrease in legal settlements as the prior year period included an $18.8 million legal settlement of a patent dispute with Elan Corporation and the current year period included a $3.0 million legal settlement.
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Watson Pharmaceuticals Inc. has a market cap of $5.23 billion; its shares were traded at around $41.99 with a P/E ratio of 15.55 and P/S ratio of 1.87. 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 Edward Owens of Vanguard Health Care Fund, Jim Simons of Renaissance Technologies LLC, Jeremy Grantham of GMO LLC, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations:
Cost of sales for our Global Generic segment increased 20.6% or $49.0 million to $287.5 million for the three months ended March 31, 2010 compared to $238.5 million in the prior year period. This increase in cost of sales was mainly attributable to the increase in international sales during the quarter ($70.3 million) and higher product sales from new product launches in the current year partially offset by manufacturing efficiencies as a result of the implementation of our Global Supply Chain Initiative. Cost of sales during the quarter include $11.8 million of additional inventory costs associated with the fair value step-up in acquired inventory.R&D expenses within our Global Generic segment increased 40.5% or $12.1 million to $42.2 million for the three months ended March 31, 2010 compared to $30.1 million from the prior period. This increase in R&D expenses was mainly due to increased international R&D expenditures, ($15.2 million), (including those of the recently acquired Arrow Group), partially offset by lower test chemical costs ($2.0 million) and lower costs due to the implementation of our Global Supply Chain Initiative ($1.0 million).
Net revenues from our Global Brand segment for the three months ended March 31, 2010 decreased 18.5% or $20.7 million to $91.3 million compared to net revenues of $112.0 million from the prior year period. The decrease in net revenues was primarily attributable to the loss of Ferrlecit® ($35.8 million), as our distribution rights for Ferrlecit® terminated on December 31, 2009. The decline in revenues by the loss of Ferrlecit® was partially offset by sales of new products, including Rapaflo® and Gelnique®, incremental sales of certain non-promoted products and higher other revenues.
R&D expenses within our Global Brand segment increased 41.3% or $5.1 million to $17.3 million compared to $12.2 million from the prior year period primarily due to a $3.0 million milestone payment in the current year period, higher clinical spending ($0.7 million) and higher labor costs ($0.7 million).
Selling and marketing expenses within our Global Brand segment decreased 11.9% or $4.4 million to $32.5 million compared to $36.9 million from the prior year primarily due to lower promotional costs due to the loss of Ferrlecit® ($1.9 million) and lower field force personnel-related costs ($2.5 million).
Corporate general and administrative expenses increased 8.0% or $5.5 million to $74.4 million compared to $68.9 million from the prior year period due to higher international general and administrative expenses for the quarter ($11.3 million), higher legal and personnel costs ($4.5 million) and acquisition and integration costs related to the Arrow Acquisition ($4.3 million). The increases in general and administrative expenses were partially offset by a decrease in legal settlements as the prior year period included an $18.8 million legal settlement of a patent dispute with Elan Corporation and the current year period included a $3.0 million legal settlement.
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