Warner Chilcott sees weak 2013 profit on higher R&D costs
(Reuters) - Specialty pharmaceutical company Warner Chilcott Plc WCRX.O forecast 2013 adjusted earnings below analysts' estimates as it expects research and development expenses to increase with some of its drugs moving into late-stage development.
Warner Chilcott said it would spend about $115 million to $135 million on research and development in 2013.
On a conference call with analysts, the company said it also expects higher legal costs, but did not elaborate further.
"I think the company is being very conservative with its estimates. They set a very low bar for themselves," said Susquehanna analyst Gary Nachman.
"I don't think they're going to end up spending as much as they guided," Nachman said.
Shares of Warner Chilcott, which makes drugs used in women's healthcare, dermatology, gastroenterology and urology, were down about 1 percent at $14.27 in morning trade on the Nasdaq. They fell to a low of $14.06 earlier in the session.
The company's key drug, osteoporosis treatment Actonel, is seeing declining sales from generic competition, while birth control pill Lo Loestrin Fe and bladder drug Enablex are also expected to go off patents in a couple of years.
Warner Chilcott, which expects sales of Lo Loestrin Fe and vaginal cream Estrace to offset the Actonel declines, expects 2013 revenue of $2.3 billion to $2.4 billion.
Analysts on average were expecting $2.38 billion.
The company said its capsule Delzicol, to treat ulcerative colitis — a type of inflammatory bowel disease — will be launched in March 2013.
Delzicol will replace Asacol, the company's tablet for the same indication and its most profitable franchise.
According to a filing, Asacol contributed $743 million to the company's revenue in 2011, second only to Actonel.
"The FDA did not want us to have two products in the marketplace, because that would cause confusion to the patients," Chief Executive Roger Boissonneault said on a conference call to analysts.
The company expects adjusted earnings of $3.20 to $3.30 per share in the period, below analysts' estimates of $3.59 per share, according to Thomson Reuters I/B/E/S.
(Reporting by Esha Dey and Vrinda Manocha in Bangalore; Editing by Saumyadeb Chakrabarty)