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Recently, Warner Chilcott plc received encouraging news when the US Food and Drug Administration (FDA) approved its ulcerative colitis drug Delzicol (mesalamine). The company intends to launch the drug in Mar this year.

The approval will enable Warner Chilcott to market the drug in dosage of 400mg for treating patients suffering from mildly to moderately active ulcerative colitis and for the maintenance of remission of the disease.

We note that another distinguished ulcerative colitis drug in the company’s product portfolio is Asacol. This drug is marketed in 2 doses – 400 mg and 800 mg.

We are positive on the addition of a new product to Warner Chilcott’s product portfolio since many of its key drugs are facing declining sales due to generic competition. The generic competition that the company is currently facing or expects to face for its various drugs has put significant pressure on it.

Osteoporosis drug, Actonel lost exclusivity in Western Europe in late 2010. Actonel accounted for 70% of Warner Chilcott’s 2010 revenues from the region. Moreover, the company suffered a huge setback in 2012 when a US district court ruled that the generic versions of neither Mylan, Inc. (MYL - Analyst Report) nor Impax Laboratories Inc. (IPXL - Snapshot Report) infringed the patent of Warner Chilcott’s 150 mg dosage of acne drug Doryx.

Following the verdict, Mylan has entered into the US market with its generic version of Doryx 150 mg. Also, drugs such as Loestrin and Enablex are expected to go off patent in the US in 2014 and 2015, respectively. The genericization of key products will make it challenging for Warner Chilcott to drive the top line.

Warner Chilcott, a specialty pharmaceutical company, currently carries a Zacks Rank #3 (Hold). Valeant Pharmaceuticals International, Inc. (VRX - Analyst Report) is well placed in the specialty pharmaceutical space with a Zacks Rank #1 (Strong Buy).

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