Warner Chilcott Ltd. (WCRX)

Warner Chilcott is a specialty pharmaceutical company focused on developing, manufacturing, marketing and selling branded pharmaceutical products in women's healthcare and dermatology in the US. The company's franchises are comprised of complementary portfolios of established branded, development-stage and new products, including, Loestrin 24 Fe and Taclonex. Its women's healthcare franchise is comprised of contraceptive and hormone therapy (HT) categories and its dermatology franchise consists of psoriasis and acne therapies.


On January 1, 2006, the company acquired the US sales and marketing rights to the Dovonex branded pharmaceutical products. For the nine months ended September 2006, Warner Chilcott's revenues increased 45% to $548.1 million, reflecting increased sales from Dovonex product and higher sales due to introduction of two new products Taclonex & Loestrin. Fiscal 2007 is expected to be bullish with revenues to be in the range of $820-$840 million driven by Loestrin 24, Taclonex and Dovonex.


Recently in January 2007 Warner Chilcott and Foamix have signed an agreement to jointly develop antibiotic foam for the treatment of acne. Under the terms of this agreement, Foamix will be responsible for developing the foam formulations and Warner Chilcott will have an option to continue definitive development and worldwide commercialization of the product.


Warner Chilcott seems to be an attractive investment idea as the base business model is less at risk as it has diversified product lines in both women’s health and dermatology. The company has nearly ten products that generate meaningful revenues, with no single product responsible for more than 20% of total company sales. Further, the management team has been successful with reinvigorating acquired products as well as new product launches with an effective sales force of roughly 400 sales reps.