Watson Pharmaceuticals has entered into a definitive agreement to acquire Actavis for around €4.25 billion to create the third largest global generics company.

The combined company will have commercial operations in more than 40 countries and increase Watson’s international generic net revenues from 16% to 40% to reach around $8bn.

Paul M. Bisaro, President and CEO of Watson, said the acquisition “dramatically enhances” Watson’s commercial positioning and “brings complementary products and capabilities” in the US.

Actavis has more than 10,000 global employees and had revenues last year of around $2.5bn. It markets more than 1,000 products and has approximately 300 products in its pipeline.

“In a single, commercially compelling transaction, we more than double Watson’s international access and strengthen our commercial position in key established European markets as well as exciting emerging growth markets, including Central and Eastern Europe and Russia,” said Paul Bisaro. 

“The transaction achieves Watson’s stated strategic objective of expanding and diversifying our business into a truly global company.  Once the transaction is completed, approximately 40% of our generic revenues will come from markets outside of the US.”

The CEO added that the deal is “financially compelling” and will accelerate Watson’s growth profile for the “foreseeable future”.

When completed, Watson will have more than 17,000 staff around the globe and have around 20 manufacturing facilities and more than a dozen R&D centres. Watson says its enhanced scale will allow it to capitalise on new commercial, R&D, manufacturing and customer service capabilities.

Pfizer, the world’s largest pharmaceutical company, has declared financial results for 2011 indicating that its new products largely compensated for its loss of exclusivity on Lipitor and other ‘blockbuster’ drugs.

The company declared a full-year revenue increase of 1% for 2011, reflecting an operational decline of only 2% ($1.6bn) despite losing $5bn of its former market share through patent expiry.

The results were described by Pfizer Chairman Ian Read (pictured) as showing the company’s “new direction and focus” with a strong pipeline and a more “results-driven” R&D programme.

Pfizer’s full-year revenues for 2011 were $67.4bn compared to 2010’s $67.1bn, reflecting an operational decline of $1.6bn. Its US revenues were $26.9bn, down 7% from 2010. Its international revenues were $40.5 billion, 6% above the 2010 figure, reflecting 1% operational growth and a 5% positive impact of foreign exchange. Pfizer’s international revenues represented 60% of the total in 2011, compared with 57% in 2010.

The company’s Primary Care unit saw growth in sales of Celebrex, Lyrica, Pristiq and Spiriva balancing losses from patent expiries: Lipitor and Caduet in the US in November 2011, Lipitor in other developed markets over 2010, and Aricept in the US in November 2010. These losses of exclusivity cost the unit $775m (13%) relative to the last quarter of 2010.

The Specialty Care unit saw growth in Enbrel in developed markets and Prevenar in Japan. In the US, revenues from Prevnar 13 were lower than in 2010 due to a successful vaccination programme that year. The patent expiries of Vfend and Xalatan in the US cost the unit $205m, 5% of fourth-quarter 2010 revenues.

The Emerging Markets unit saw volume growth more than offset by the negative impact of foreign exchange and increased price pressures, as well as the patent expiry of Lipitor in Brazil and Mexico in 2010. Patent expiries cost the unit $29m, 1% of the fourth-quarter 2010 figure.

The Established Products unit suffered from the patent expiries of Effexor XR, Protonix and Zosyn in the US, which cost the unit $208m (9% relative to fourth-quarter 2010). It also suffered from multi-source generic competition to Aricept in the US. These losses were partially offset by $150m from the addition of legacy King products, as well as by foreign exchange and by the licensing of Watson Pharmaceuticals to sell the authorised generic version of Lipitor in the US.

Pfizer reduced its total costs, excluding the impact of foreign exchange, by 5% relative to fourth-quarter 2010. This was achieved through cost-reduction and productivity initiatives, particularly in R&D, as well as reductions in the US field force and in marketing spend.

Ian Read, Pfizer’s Chairman and CEO, said: “Overall, 2011 was a year of setting new direction and focus for Pfizer. I am pleased with our 2011 financial performance, which was achieved in the face of a challenging global market and product losses of exclusivity of approximately $5 billion.

“In 2011, we advanced our pipeline and improved the rigour and productivity of our R&D efforts, while also changing the culture within the R&D organisation to be more accountable and results-driven. With the steady cadence of new product launches, marketing submissions and approvals, and positive late-stage clinical data presentations, we are clearly seeing the benefits of our investments and new approach.

“Prevnar/Prevenar 13 for adults, tofacitinib, Xalkori, Inlyta (axitinib) and Eliquis are well positioned to be important new product opportunities that may enhance the performance of our business. Additionally, we have a next wave of compounds that have shown promise in early and mid-stage studies, and we look forward to progressing them through the pipeline.”

Looking to 2012, he concluded: “We will continue to fix the innovative core in order to enhance our post-proof-of-concept portfolio of compounds in high-priority disease areas and successfully launch additional novel products. I look forward to continuing the significant progress we’ve made.”

Biotech company Amgen and pharma company Watson Pharmaceuticals are collaborating to develop and commercialise a number of biosimilar antibody-based products in the oncology field.

Amgen will develop the products with funding and expert support from Watson, who will also manage their commercialisation.

The products developed through the collaboration will be sold under a joint Amgen/Watson label.

Founded in 1980, Amgen was one of the first biotech companies to take new therapies all the way from the laboratory to the patient. Watson is an integrated global specialty pharmaceutical company focused on urology and women’s health.

According to the two US companies, the collaboration demonstrates that biosimilars are distinct from generics, requiring more infrastructure and expertise for their development.

Under the terms of the agreement, Amgen will take primary responsibility for developing, manufacturing and launching the biosimilars. Watson will contribute up to $400 million in co-development costs, providing development support and sharing risks.

Watson will also manage the commercial life cycle of the biosimilars, and will receive royalties from product revenues and sales milestones.

“The pairing of Amgen's 30 years of experience in biologics together with Watson’s substantial generics and specialty pharmaceutical experience and complementary commercial and distribution capabilities provides great potential for worldwide patient access to high-quality oncology biosimilar medicines," said Amgen President Robert A. Bradway.

Paul Bisaro, Watson’s President, commented: “This collaboration places Amgen and Watson in an unparalleled position in the global biosimilars market by capitalising on best-in-class capabilities in both innovative biologics and specialty pharmaceuticals and generics.

“We believe that biosimilars are the next frontier in the evolution of the healthcare market, and we are prepared to bring all of our resources to bear in this collaboration to ensure this partnership can most effectively compete in the biosimilar space.”

Sanofi is set to launch a generic version of Pfizer’s anti-cholesterol drug Lipitor (atorvastatin calcium), according to reports in France.

Newspaper Les Echos cites two other sources that Sanofi is planning a generic alternative of Lipitor before its full European patent protection is lost in May next year.

The agreement would be part of the France’s Strategic Council of Health Industries (CSIS) programme which offers tax rebates to the company who holds the rights to the original drug if production is based in the country.

Lipitor, one of the world’s best selling drugs, was set to lose patent in November 2011, but received an extra six months of protection in Europe after a launch of a new version for children.

Generic versions are already available in several countries, including Spain, Brazil and Mexico, which has seen sales of the drug drop from $2.81bn in 2010 to $2.59bn in 2011.

Dr Reddy’s Laboratories recently settled a lawsuit with Pfizer regarding its plan to launch a generic version of the drug, following a similar case against Teva Pharmaceutical restricted their manufacture of the drug.

Other generic companies such as Mylan, Ranbaxy Laboratories and Watson Pharmaceuticals are also planning alternative versions in the future.