PARSIPPANY, N.J., Jan. 24, 2012 /PRNewswire/ -- Watson Pharmaceuticals, Inc. (NYSE: WPI) today announced preliminary 2011 non-GAAP earnings per share of $4.75-$4.77, a 39 percent increase over 2010 full year earnings during its third annual Investor Meeting in New York City. Excluding the November 2011 launch of generic Lipitor® which is expected to represent a $0.64 earnings contribution, earnings grew at approximately 20 percent for the full year. The Company also reported preliminary full year 2011 revenues of approximately $4.57 billion, an increase of 28 percent over 2010.
"The strength of our integrated pharmaceutical business drove exceptional results last year, based on significant performance in our Global Generics business, and sound results for our Global Brands and Anda Distribution operations," said Paul Bisaro, President and CEO of Watson. "Total revenue grew at approximately 28%, supporting the exceptional 39% growth in earnings. We ended the year with a strong balance sheet that is enabling us to support both the organic growth of our business, while being in the good position to execute on strategic business development activities and investments into all three of our businesses."
The Company noted that its Global Generics revenues of approximately $3.36 billion were driven by the launch of generic Concerta®, by higher generic Lipitor® sales resulting from its ability to maximize the launch opportunity, as well the continued strong performance of its modified-release and oral contraceptive franchises. In addition, Watson's international generics business performed well, supported by the May 2011 strategic acquisition of Specifar. The Company said that Global Brands revenues of approximately $440 million, and Anda Distribution revenues of approximately $776 million were in line with its full year forecasts.
Business Segment Highlights for 2011
"In the Global Generics business, U.S. growth was driven by continued solid performance of our base business, complemented by the addition of generic versions of Concerta®, Lipitor®, Kadian®, Seasonique® and LoSeasonique®. We also continued to grow the international segment, reporting the highest growth rate of prescriptions in Canada; our UK business benefited from the successful launch of generic Nexium® under a license from AstraZeneca, and we saw growth in hospital sales in France," Bisaro told investors.
"Our Global Brands business continued to benefit from the growth of our Rapaflo®, Gelnique® Crinone® and Androderm® franchises, and we expanded the portfolio with the launch of Generess® Fe oral contraceptive and the Androderm® 2/4 mg strengths.
In light of the reduced number of new product launches by third-parties, our Anda Distribution business performed as expected. While we don't account for its contribution in divisional results, Anda provided strong execution support to Watson by playing a significant part in the successful launch of both generic Lipitor® and generic Concerta®.
Finally, the strength of our global supply chain enabled us to capitalize on market opportunities resulting from challenges faced by competitors in the generic space."
Business Development Accomplishments
The Company noted that business development activities, funded by its strong balance sheet, resulted in the strategic acquisition of Specifar in May. The company expanded its Global Brands business with the licensing of Antares' oxybutynin gel product, which will be launched in the U.S. and Canada in the first half of 2012. Additionally, the company announced its collaboration with Amgen for the development and commercialization of a portfolio of monoclonal antibody oncology products in late 2011.
Watson management also provided additional comment on the strategic acquisition of Ascent Pharmahealth Ltd. "Watson completed the acquisition of Ascent Pharmahealth Ltd., the Australia and Southeast Asia generic pharmaceutical business of Strides Acrolab Limited for approximately AU$375 million," Bisaro noted. "As a result of the acquisition, we are now the fifth largest generic pharmaceutical company in Australia. We also become the largest generic company in Singapore, and gain an established commercial base in Malaysia, Hong Kong, Vietnam and Thailand."
"With this acquisition, Watson joins the leaders in the Australian pharmaceutical market, the 13th largest in the world. The acquisition of Ascent also provides a successful business in Southeast Asia. We have a larger portfolio of products and will gain a broader pipeline of products to support continued growth. We anticipate a seamless and rapid integration of the Ascent businesses."
Update on Progesterone Vaginal Gel 8% Application
Regarding the vote by the FDA Advisory Committee for Reproductive Health Drugs, Bisaro noted that the Company was disappointed in the outcome and reiterated that the clinical studies supporting the application were conducted in accordance with a clinical plan agreed to by FDA prior to initiation and that the statistical analysis of the clinical data was based on a plan agreed to in advance by FDA. He said Watson and Columbia Laboratories will continue to work with FDA over the next few weeks to pursue all options related to the approval of this critical therapy.
"On Monday, I spoke with FDA Commissioner Margaret Hamburg to personally express Watson's concern that the FDA staff left the Advisory Committee with no option but to question the efficacy of the product," Bisaro said. "I remain concerned that by applying after-the-fact metrics to the agreed upon program, FDA staff has placed the Agency in the position of perhaps denying a life-saving therapy that has demonstrated results in preventing prematurity and has an exceptional safety record. I strongly urged the Commissioner to mobilize the Agency's most experienced experts to work closely with Watson and Columbia to approve this unique and life-saving therapy."
2012 Financial Outlook
"We remain in a strong position to deliver sustainable adjusted EBITDA and adjusted non-GAAP earnings per share growth in 2012 and beyond by leveraging our strengths as an integrated global pharmaceutical company, utilizing our strong balance sheet to continue to make strategic acquisitions of products, capabilities and companies, and continuing to fund our internal development activities at the levels necessary to drive sustainable growth in generics, brands and biosimilars. We have a balanced business, a number of potential earnings contributors, and a focus on sustainable shareholder growth that will come from execution of our strategies," Bisaro stated.
Watson estimates total net revenue for 2012 will be approximately $5.3 billion.
- Total Global Generics segment revenue of between $3.8 and $4.0 billion.
- Total Global Brands segment revenue of between $500 and $525 million.
- Total Anda Distribution segment revenue of between $850 and $900 million.
- Adjusted non-GAAP earnings for 2012 is expected to be between $5.25 and $5.55 per diluted share.
- Adjusted EBITDA for 2012 is expected to be between $1.28 and $1.35 billion
2013 Financial Outlook
Watson estimates that 2013 adjusted non-GAAP earnings per share will increase by approximately 10 percent year-over-year.
About Watson Pharmaceuticals, Inc.
Watson Pharmaceuticals, Inc. is a leading integrated global pharmaceutical company. The Company is engaged in the development and distribution of generic pharmaceuticals and specialized branded pharmaceutical products focused on Urology and Women's Health. Watson has operations in many of the world's established and growing international markets.
For press release and other company information, visit Watson Pharmaceuticals' Web site at http://www.watson.com.
