Watson Pharmaceuticals Inc.: PharmaVitae Model

Datamonitor, March 2009, Pages: 118

This analysis examines the historical and forecast performance for Watson in the prescription pharmaceutical sector. The profile encompasses global company strategy, portfolio and pipeline analysis with 1-6 year sales forecasts for key drugs. An interactive forecasting and analysis tool provides continually updated quantitative and qualitative information.

Reasons to Purchase:

- Benchmark Watson's performance against key rivals in the prescription pharmaceutical sector
- Assess how large scale M&A activity undertaken by a number of Watson's peers has intensified competitive threat to future sales growth
- Analyze how Watson will seek to bolster its performance in the generic pharmaceutical market via its branded offering and distribution business

CHAPTER 1 ABOUT THIS PROFILE 2
Executive summary 2
Watson: PharmaVitae forecasts at a glance 4
Quarterly news update 5
Company introduction 5
Company sales 5
Company financials 5
Key products and competitors 5
Data sourcing 6
Sales data 6
Analyst consensus 6

CHAPTER 2 EXECUTIVE SUMMARY 7
Key findings 7
Prescription pharmaceutical sales performance, 2001-13 8
Financial performance, 2001-13 9
Watson: PharmaVitae forecasts at a glance 10
Strategic insight 11
Watson - Left behind by M&A activity 11
Over-reliance on US market - overseas expansion to be expected? 13
Removal of OAI status for manufacturing plant 14
Anda distribution business 14
SWOT analysis 15
Strengths 15
Weaknesses 16
Opportunities 17
Threats 18

CHAPTER 3 QUARTERLY NEWS UPDATE 22
Product developments 22
Deals and alliances 23
Product deals 23
Technology deals 24
Company announcements 24
Future product milestones 26

CHAPTER 4 COMPANY INTRODUCTION 27
Key findings 27
Background 28
Key corporate developments 28
M&A history 29
Andrx acquisition 31
M&A strategy 32
Deals and alliances 32
Current corporate structure 33

CHAPTER 5 COMPANY SALES 34
Key findings 34
Prescription pharmaceutical sales and growth rate analysis, 2001-13 35
Product analysis 38
Product analysis, 2001-07 38
Product analysis, 2007-13 41
Launch portfolio analysis 44
Launch analysis, 2007-13 44
Therapy area analysis 47
Therapy area analysis, 2001-07 48
Therapy area analysis, 2007-13 49
Therapy area focus, 2001-13 50
Geographic analysis 51
Geographic analysis, 2001-07 52
Geographic analysis, 2007-13 53
Geographic focus, 2001-13 54
Molecule type analysis 55
Molecule type analysis, 2001-07 56
Molecule type analysis, 2007-13 56

CHAPTER 6 COMPANY FINANCIALS 57
Key findings 57
Reconciliation between PharmaVitae-formatted prescription pharma sales and company-reported total sales, 2001-07 58
Financial statements, 2001-07 59
Profit and loss account, 2001-07 59
Balance sheet, 2001-07 61
Operating costs and profit analysis 63
Operating costs and profit analysis, 2001-07 64
Operating cost ratio and profit margin analysis, 2001-07 65
Operating cost ratio and profit margin analysis, 2007-13 67
Operating costs and profit analysis, 2007-13 69
Return on capital employed analysis 70
Capital employed analysis, 2001-07 71
Return on capital employed (RoCE) analysis, 2001-07 73
Market capitalization analysis 76
Market capitalization analysis, 2001-07 76
Total shareholder returns analysis, 2001-07 78

CHAPTER 7 KEY PRODUCTS AND COMPETITORS 80
Overview 80
Central Nervous System 81
Hydrocodone/APAP 81
Overview 81
Sales forecast 82
Bupropion HCl XL 83
Overview 83
Sales forecast 84
Oxycodone APAP 85
Overview 85
Sales forecast 86
Fentanyl 87
Overview 87
Sales forecast 88
Fentanyl Patch 89
Overview 89
Sales forecast 90
Bupropion HCl SR 91
Overview 91
Sales forecast 92
Exelon (generic) 93
Overview 93
Sales forecast 94
Urology & gender specific health 95
Oral contraceptive portfolio (generics) 95
Overview 95
Sales forecast 96
Rapaflo 97
Overview 97
Sales forecast 98
Yasmin (generic) 99
Overview 99
Sales forecast 100
Oxybutynin Gel 101
Overview 101
Sales forecast 102
Cardiovascular 103
Cartia XT 103
Overview 103
Sales forecast 104
Cardizem LA 105
Overview 105
Sales forecast 106
Oncology 107
Trelstar 107
Overview 107
Sales forecast 108

CHAPTER 8 APPENDIX 109
Abbreviations 109
Exchange rates 110

List of Tables
Table 1: Watson - PharmaVitae forecasts at a glance 4
Table 1: Watson - PharmaVitae forecasts at a glance 10
Table 2: Watson key product developments, Q1-Q3 2008 22
Table 3: Watson product deals and alliances, Q1-Q3 2008 23
Table 4: Watson technology deals and alliances, Q1-Q3 2008 24
Table 5: Watson company announcements, Q1-Q3 2008 24
Table 6: Watson future product milestones, 2008-10 26
Table 7: Watson product portfolio overview ($m), 2001-07 38
Table 8: Watson product portfolio overview ($m), 2007-13 41
Table 9: Watson launch portfolio overview ($m), 2007-13 44
Table 10: Watson product portfolio overview ($m), 2001-07 48
Table 11: Watson product portfolio overview ($m), 2007-13 49
Table 12: Watson portfolio overview by geographic region ($m), 2001-07 52
Table 13: Watson portfolio overview by geographic region ($m), 2007-13 53
Table 14: Watson portfolio overview by molecule type ($m), 2001-07 56
Table 15: Watson product portfolio overview by molecule type ($m), 2007-13 56
Table 16: Total Watson sales by business unit ($m), 2001-07 58
Table 17: Watson profit and loss account ($m), 2001-07 59
Table 18: Watson balance sheet ($m), 2001-07 61
Table 19: Watson operating revenue/cost analysis ($m), 2001-07 64
Table 20: Watson operating cost ratio analysis (% of total revenues), 2001-07 65
Table 21: Watson operating cost ratio analysis (% of total revenues), 2007-13 67
Table 22: Watson operating revenue/cost analysis ($m), 2007-13 69
Table 23: Watson capital employed ($m), 2001-07 71
Table 24: Watson EBIT return on capital employed ($m), 2001-07 73
Table 25: Watson EBIT pre-tax return/Capital employed driver analysis (%), 2001-07 74
Table 26: Watson market capitalization ($ billion), 2001-07 76
Table 27: Watson total shareholder returns (annual %), 2001-07 78
Table 28: Key products overview 80
Table 29: Hydrocodone/APAP: overview 81
Table 30: Hydrocodone/APAP: sales forecast ($m), 2007-13 82
Table 31: Bupropion HCl XL: overview 83
Table 32: Bupropion HCl XL: sales forecast ($m), 2007-13 84
Table 33: Oxycodone/APAP: overview 85
Table 34: Oxycodone/APAP: sales forecast ($m), 2007-13 86
Table 35: Fentanyl: overview 87
Table 36: Fentanyl: sales forecast ($m), 2007-13 88
Table 37: Fentanyl Patch: overview 89
Table 38: Fentanyl Patch: sales forecast ($m), 2007-13 90
Table 39: Bupropion HCl SR: overview 91
Table 40: Bupropion HCl SR: sales forecast ($m), 2007-13 92
Table 41: Exelon (generic): overview 93
Table 42: Exelon (generic): sales forecast ($m), 2007-13 94
Table 43: Oral contraceptive portfolio (generics): overview 95
Table 44: Oral contraceptive portfolio (generics): sales forecast ($m), 2007-13 96
Table 45: Rapaflo: overview 97
Table 46: Rapaflo: sales forecast ($m), 2007-13 98
Table 47: Yasmin (generic): overview 99
Table 48: Yasmin (generic): sales forecast ($m), 2007-13 100
Table 49: Oxybutynin Gel: overview 101
Table 50: Oxybutynin Gel: sales forecast ($m), 2007-13 102
Table 51: Cartia XT: overview 103
Table 52: Cartia XT: sales forecast ($m), 2007-13 104
Table 53: Cardizem LA (generic): overview 105
Table 54: Cardizem LA: sales forecast ($m), 2007-13 106
Table 55: Trelstar: overview 107
Table 56: Trelstar: sales forecast ($m), 2007-13 108
Table 57: Exchange rates, 2007 110

List of Figures
Figure 2: Watson's financial performance ($m), 2001-13 2
Figure 1: Watson prescription pharmaceutical performance, sales ($m) and growth rate (%), 2001-13 8
Figure 2: Watson's financial performance ($m), 2001-13 9
Figure 3: Historical and forecast prescription pharmaceutical sales growth for leading generics players 2001-07 & 2007-13 12
Figure 4: Watson SWOT analysis 15
Figure 5: Motives driving forward Watson's acquisitions, 2002-06 29
Figure 6: M&A/divestment history 31
Figure 7: Current corporate structure 33
Figure 8: Watson prescription pharmaceutical performance, sales ($m) and growth rate (%), 2001-13 35
Figure 9: Watson key sales growth driver & resistors ($m), 2001-07 39
Figure 10: Watson key sales growth drivers & resistors ($m), 2007-13 42
Figure 11: Watson prescription pharmaceutical sales by therapy area ($m), 2001-13 47
Figure 12: Watson prescription pharma sales by therapy area (% of total), 2001-13 50
Figure 13: Watson prescription pharmaceutical sales by geographic region ($m), 2001-13 51
Figure 14: Watson growth drivers and resistors by geographic region ($m), 2001-07 52
Figure 15: Watson drivers and resistors by geographic region ($m), 2007-13 53
Figure 16: Watson prescription pharmaceutical sales by geographic region (% of total), 2001-13 54
Figure 17: Watson prescription pharmaceutical sales by molecule type ($m), 2001-13 55
Figure 18: Watson operating revenue/cost analysis ($m), 2001-13 63
Figure 19: Watson operating cost ratio analysis (% of total revenues), 2001-13 68
Figure 20: Watson return on capital employed, EBIT margin and capital turnover, 2001-07 70
Figure 21: Return on capital employed formula 74
Figure 22: Watson market capitalization ($ billion), 2001-07 77
Figure 23: Watson total shareholder returns vs. S&P 500 ($m), 2001-07 79

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