Watson gears up for generic Lipitor launch

Watson Pharmaceuticals’ (NYSE:WPI) strategy for launching its generic version of Lipitor was the topic of conversation in its third-quarter results as Pfizer’s (NYSE:PFE) exclusive patent to the cholesterol drug nears its expiration date.

During Watson’s conference call to discuss its quarterly earnings, CEO Paul Bisaro said:

“Regarding the launch of generic Lipitor later this month, which will be Watson’s largest product launch ever from a revenue perspective, we anticipate the atorvastatin launch to contribute between $0.48 and $0.53 in diluted earnings per share in the fourth quarter. This includes the assumption that Ranbaxy will launch with Watson and that Pfizer will compete aggressively and retain approximately 40 percent market share for the Lipitor brand.”

But Pfizer‘s plan to market an over-the-counter version of the drug could steal Watson’s thunder, especially if Pfizer is able to sell its branded product at a significant discount.

Watson, based in Parsippany, New Jersey, also faces competition from Indian generics drug maker Ranbaxy,which is likely to launch its version first. Merck (NYSE:MRK) could throw its own generic hat into the ring with atorvastatin.

Generics accounted for just over half of Watson’s sales last year. In the third quarter, global generics sales grew to $792.4 million compared with $566.1 million the previous year. Seeking Alpha‘s takeover analyst David Gould believes it could boost its brand business through acquisitions it is well positioned to make.

Sales growth was fueled by Watson’s extended-release products, which rose 89 percent.