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Watson Pharmaceuticals’ (WPI) Q4CY11 numbers were in line with Street
estimates and at the higher end of its guidance. Revenue growth of 62% YoY
included launch of Lipitor and Concerta. The company expects USD550mn‐
600mn revenue and USD250mn‐260mn gross profit contribution from
Lipitor during exclusivity and significant price erosion post exclusivity.
Management indicated slow down in growth post CY12, which suggests
revenue growth can decelerate for large Indian companies, especially for
those with a USD800mn‐900mn base in the US.
Strong growth from launch of generic Lipitor and Concerta
Watson’s Q4CY11 numbers were in line with revenue growth of 62% to USD1.5bn, EBIT of
USD372mn (up 172%) and EPS of USD1.77 (up 90%). EPS ex‐ Lipitor grew 22% YoY.
Revenue and profit form Lipitor was USD300mn and USD81mn, respectively.
Global generics growth led by US
Global generics grew 81% YoY largely led by 16 new launches in the US including generic
Lipitor. Ex‐US, growth was 23% YoY. Global brands segment grew 17% YoY and Anda
distribution division grew 24% YoY. Management has guided for 15‐21% growth in
generics with launches of Para IVs—Xopenex and Actos. Xopenex will be a three player
market during exclusivity including AG from Sanofi. Management has built in higher
competition in OCs and controlled substances products for CY12.
Slower growth momentum post 2012 form patent cliff in US
Watson has guided to earnings growth of 15‐20% in CY12 and 10% in CY13 vis‐à‐vis 30% in
CY11 which highlights that it expects a slowdown in the US market beyond CY12 as patent
cliff opportunity is likely to taper. We highlight that pace of growth for large Indian
generic companies can also decelerate beyond FY14, particularly for companies with
USD800mn‐900mn revenue base in US by FY13.
Read across for Ranbaxy: Lipitor sales at USD 550mn‐600mn
The company has guided to USD250mn‐260mn gross profit from Lipitor during exclusivity
which translates into sales of USD550mn‐600mn. We highlight that Watson had launched
Lipitor a week prior to Ranbaxy and garnered significant market share. We have built
USD350mn‐400mn revenue for Ranbaxy from Lipitor. Watson also highlighted that IMS
data is not painting the correct picture and it has almost 50% of the retail market
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Watson Pharmaceuticals’ (WPI) Q4CY11 numbers were in line with Street
estimates and at the higher end of its guidance. Revenue growth of 62% YoY
included launch of Lipitor and Concerta. The company expects USD550mn‐
600mn revenue and USD250mn‐260mn gross profit contribution from
Lipitor during exclusivity and significant price erosion post exclusivity.
Management indicated slow down in growth post CY12, which suggests
revenue growth can decelerate for large Indian companies, especially for
those with a USD800mn‐900mn base in the US.
Strong growth from launch of generic Lipitor and Concerta
Watson’s Q4CY11 numbers were in line with revenue growth of 62% to USD1.5bn, EBIT of
USD372mn (up 172%) and EPS of USD1.77 (up 90%). EPS ex‐ Lipitor grew 22% YoY.
Revenue and profit form Lipitor was USD300mn and USD81mn, respectively.
Global generics growth led by US
Global generics grew 81% YoY largely led by 16 new launches in the US including generic
Lipitor. Ex‐US, growth was 23% YoY. Global brands segment grew 17% YoY and Anda
distribution division grew 24% YoY. Management has guided for 15‐21% growth in
generics with launches of Para IVs—Xopenex and Actos. Xopenex will be a three player
market during exclusivity including AG from Sanofi. Management has built in higher
competition in OCs and controlled substances products for CY12.
Slower growth momentum post 2012 form patent cliff in US
Watson has guided to earnings growth of 15‐20% in CY12 and 10% in CY13 vis‐à‐vis 30% in
CY11 which highlights that it expects a slowdown in the US market beyond CY12 as patent
cliff opportunity is likely to taper. We highlight that pace of growth for large Indian
generic companies can also decelerate beyond FY14, particularly for companies with
USD800mn‐900mn revenue base in US by FY13.
Read across for Ranbaxy: Lipitor sales at USD 550mn‐600mn
The company has guided to USD250mn‐260mn gross profit from Lipitor during exclusivity
which translates into sales of USD550mn‐600mn. We highlight that Watson had launched
Lipitor a week prior to Ranbaxy and garnered significant market share. We have built
USD350mn‐400mn revenue for Ranbaxy from Lipitor. Watson also highlighted that IMS
data is not painting the correct picture and it has almost 50% of the retail market
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