Watson Pharmaceuticals Inc. (WPI:US), the second-largest U.S. maker of generic drugs, rose the most in more than nine months in New York Stock Exchange trading after saying it may soon be cleared to introduce more new products.
The Corona, California-based drugmaker gained $1.64, or 6.1 percent, to $28.43 in composite trading at 4:01 p.m., its biggest percentage increase (WPI:US) since May 1, 2007.
Watson said yesterday after the market closed that the U.S. Food and Drug Administration has begun re-inspecting a Davie, Florida, facility that was cited for deficiencies and barred from introducing new products in September 2005. Resolution of the FDA issue would unlock an important avenue of growth for the company, analysts said.
``We believe this manufacturing issue has represented an overhang on the stock,'' said Lei Huang, an analyst at Summer Street Research Partners, in a note to clients today. ``We estimate six to 10 product approvals have been withheld by the FDA'' because of the deficiencies, Huang said.
The plant was acquired in Watson's $1.9 billion purchase of Andrx Corp. in November 2006. Watson Chief Executive Officer Paul Bisaro said in an interview earlier this week that the facility has been operating at about one third of its capacity since the FDA action, though all of the workers were retained.
The inspection may take one to four weeks, Bisaro said. If the review is favorable, the FDA could then start approving products made at the plant within the next month, he said.
Watson ranks second among U.S. generic-drug makers by sales, after Mylan Inc. (MYL:US)
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