Watson Shares Rise as FDA OKs Bladder Treatment

Shares of Watson Pharmaceuticals Inc. gained nearly 10% on Thursday after the Corona-based drug maker won regulatory approval to market a skin patch to treat overactive bladders.

Watson, one of the nation’s largest makers of generic drugs, said sales of the patch could bring in $40 million to $50 million this year and that the figure could grow to $200 million by 2008.

“This was a long-awaited approval,” said Ian Sanderson, a Boston-based pharmaceuticals analyst with SC Cowen. “This was a big accomplishment for them.”

Watson’s shares gained $2.67 to $30.55 on the New York Stock Exchange.

The Food and Drug Administration approval came nearly a year after it rejected the medicine, the first skin-based treatment for overactive bladders, saying there was insufficient test data.

With Wednesday’s go-ahead by the FDA, the company hopes to begin marketing the patch in May to urologists and other specialists.

The patch, called Oxytrol, is part of Watson’s broader strategy to enhance its business in the branded pharmaceuticals market, in which margins are higher and long-term sales potential greater than for generics.

Although Watson is known as a maker of generic drugs, its branded products account for about 55% of sales, which hit $1.2 billion in 2002, the firm said.

Watson said its Oxytrol patch will be marketed to the estimated 33 million Americans who have overactive bladders and the resulting urinary incontinence, urgency and frequency.

The company said the market for overactive bladder medication is expected to grow to $2 billion by 2005, from the current estimate of $1 billion.