Watson sees a 4th-qtr 2006 net loss of $489M

US branded and generic drugmaker Watson Pharmaceuticals says that, in the fourth quarter of 2006, net revenue increased 48% on the like, year-ago period, to $621.2 million, driven by increased product sales within its generics business and the addition of distribution segment revenue following last year's $1.9 billion acquisition and integration of Andrx (Marketletter March 20, 2006).

Watson's operating performance during the period was heavily impacted by several special items, including a $497.8 million non-cash in-process R&D charge and $12.3 million of charges related to the Andrx acquisition. Additionally, the company incurred $10.3 million in charges relating to the settlement of outstanding legal matters and a $3.3 million asset impairment charge for the planned closure of its Puerto Rico facility.

As a result of these items, the California-based firm recorded a net loss of $489.0 million, or $4.80 per diluted share, versus a net income of $20.1 million, or $0.19 per diluted share. However, Watson noted that, excluding these items, adjusted net income for the fourth quarter was $26.9 million, or $0.25 per diluted share, versus $36.3 million or $0.32 per diluted share.