MORRISTOWN, N.J., May 10 /PRNewswire-FirstCall/ -- Watson Pharmaceuticals, Inc. (NYSE: WPI) today reported a 28 percent increase in net revenue for the first quarter ended March 31, 2010 to $856.5 million, compared to $667.4 million in the first quarter 2009. On an adjusted cash basis, net income increased 25 percent to $100.3 million or $0.81 per share, compared to $80.2 million or $0.69 per share in the first quarter 2009. GAAP earnings for the first quarter 2010 were $0.57 per share, compared to $0.43 per share in the prior year period.

For the first quarter 2010, adjusted EBITDA increased 26 percent to $198.9 million, versus $158.0 million for the first quarter 2009. Cash and marketable securities were $182.3 million as of March 31, 2010. Please refer to the attached reconciliation tables for adjustments to GAAP earnings. Watson’s results include a full quarter of Arrow Group results.

“Watson completed its first quarter with strong earnings and significant momentum for the remainder of the year,” said Paul Bisaro, President and CEO. “Our generics business benefitted from the first full quarter of sales from our newly acquired international business, the launch of Diltiazem LA, as well as growth of our Metoprolol business. We have entered into ten new patent challenges so far this year. In our global brands business, we received approval for a six month formulation of TRELSTAR® and completed several key product development deals, expanding our women’s health portfolio and furthering our biologics efforts.”

“Our overall performance in the quarter, combined with the proceeds from the sale of our interest in Scinopharm, permitted us to substantially reduce our debt, while continuing to support a strong investment in R&D. We also continued our focus on driving further efficiencies within our global supply chain, " Bisaro added. “Given the strong start to the year and the positive trends we see for the remainder of the year, we are increasing our forecast for 2010 and now expect our adjusted cash earnings to be between $3.25 and $3.45 per share.”

Global Generics net revenue for the first quarter 2010 increased 35 percent to $543.8 million, reflecting the addition of product sales from our new international markets and higher sales of extended release products, including Metoprolol. International product sales were $106 million.

Adjusted Global Generics gross margin increased eight percent to 50.2 percent in the first quarter 2010, due to the launch of new products and increased efficiencies resulting from our Global Supply Chain Initiative.

Global Generics research and development expense increased $12.1 million to $42.2 million in the first quarter 2010, due to higher international R&D expense. Watson currently has more than 100 ANDAs pending in the U.S., including tentative approvals, and more than 900 applications pending outside of the U.S.