UPDATE 1-Watson sees windfall as Toprol XL generic wins OK

* FDA approves two dosage forms of Watson generic

* Watson aims to seize ground from two suspended generics

NEW YORK, Aug 3 (Reuters) - Watson Pharmaceuticals Inc said on Monday U.S. regulators have approved its generic form of popular blood pressure drug Toprol XL, opening it to a lucrative market after shipments of two rival generics were suspended due to manufacturing problems.

London-based AstraZeneca Plc AZN.L reaps more than $700 million in annual U.S. revenue from Toprol XL and an authorized generic marketed by Par Pharmaceutical Companies Inc PRX.N that uses the same active ingredient.

Two other generics had been sold in the United States by Swiss drugmaker Novartis AG NOVN.VX and by KV Pharmaceutical Co KVa.NKVb.N, but the companies suspended shipments of those copycats more than six months ago due to manufacturing issues cited by the U.S. Food and Drug Administration.

Novartis, which introduced its generic in 2007, stopped shipments in December 2008. KV Pharmaceutical suspended shipments of its four dosage forms in January.

“We get these opportunities every once in a while and this is one of those unique opportunities,” said Watson spokeswoman Patty Eisenhaur, referring to the sudden recent disappearance from the U.S. market of the rival Novartis and KV Pharmaceutical generics.

Eisenhaur said her company’s approved 25- and 50-mg dosage forms are the two most widely prescribed strengths of Toprol XL, and will be shipped immediately. She noted that Watson is hopeful of winning U.S. approval later this year for the 100-mg and 200-mg strengths.

“To become one of the full suppliers of a drug of this magnitude is a terrific opportunity,” Eisenhaur said.

Watson last week predicted its generic would be approved in “the near term.”

AstraZeneca raised its full-year profit forecast on July 30 after better-than-expected second-quarter results, helped by its lucky break of escaping generic competition earlier in the year on the Novartis and KV Pharmaceutical generics.

KV Pharmaceutical is unlikely to pose a threat anytime soon to Watson’s newly approved product.

The cash-strapped company last week said it does not expect to re-initiate shipments of its medicines prior to the third quarter of fiscal 2010, at the earliest.

The suburban St. Louis drugmaker expressed doubts about its ability to continue as a going concern, given that it has refrained from manufacturing and shipping any of its medicines due to a consent decree it entered with the FDA.

The FDA in August 2008 cited Novartis for failing to properly validate the manufacturing process for making Toprol XL tablets at a plant in North Carolina.

Watson and a spokesman for AstraZeneca declined to predict how long it would take Novartis to correct its own manufacturing issues and return its generic to the market.

Novartis officials could not immediately be reached for comment. (Reporting by Ransdell Pierson; Editing by Richard Chang)