Watson Shifting Drug Production to Corona

Watson Shifting Drug Production to Corona

Reed, Vita

Corona-based Watson Pharmaceuticals Inc. is closing a Puerto Rico plant and moving production to its headquarters just over the county line and to another plant in New York.

The move is designed to make better use of the Corona and Carmel, N.Y., operations, Watson spokeswoman Patricia Eisenhaur said.

“Both Corona and Carmel have sufficient capacity to absorb the manufacturing of the Puerto Rico plant,” she said.

The Puerto Rico plant has 315 workers.

Watson, which makes generic and brand name drugs, is shifting production of 16 tablet and capsule lines from Puerto Rico to Corona and the New York plant, which has about 400 workers.

The company, which employs about 1,200 people in Corona, including many from Orange County, doesn’t plan to hire as a result of the move, according to Eisenhaur.

The production transition is under way and stands to take two years to complete.

The move is drawn out by Food and Drug Administration rules. Regulators have to review the drugs being moved from Puerto Rico, according to Eisenhaur.

“It’s a review process that’s done on a product-by-product basis,” she said.

Watson acquired the Puerto Rico plant five-years ago through its acquisition of Schein Pharmaceutical Inc. The company hasn’t decided what to do with the plant once it’s closed.

The drug maker decided to shutter the plant after doing “a thorough assessment” of its plants this spring, according to Eisenhaur.

During the past few years, Watson has boosted manufacturing at Corona, including quality upgrades related to a 2002 consent decree it signed with the FDA to resolve production issues there.

Watson also has plants in Phoenix, Salt Lake City and Copaigue, N. Y.

The company said it expects to record an undetermined charge in the current quarter from the decision to close Humacao.

Watson, which counts yearly sales of $1.6 billion and a recent market value of $3.7 billion, is expected to release its third-quarter earnings on Wednesday. The company makes drugs for contraception, hormone regulation, hypertension, anemia, anxiety, psychotic disorders and pain.

Besides being a matter of miles from the Yorba Linda city line, Watson has a big OC tie: Founder and Chief Executive Alien Chao lives in Anaheim Hills and has given money to the University of California, Irvine.

The Chao Family Comprehensive Cancer Center at UCI Medical Center is named after Chao and members of his family.

Meanwhile, an FDA advisory panel last week said that a low-dosage version of Emsam, a proposed skin patch drug for treating depression, doesn’t need to carry a warning against eating certain foods while using it.

Emsam is a product of Somerset Pharmaceuticals Inc., a venture of Watson and Canonsburg, Pa.-based Mylan Laboratories Inc.

Bristol-Myers Squibb Co. holds Emsam’s marketing rights.

Emsam is a type of anti-depressant that in pill form carries strong warnings about heart disease risks tied to its use with foods containing a compound called tyramine, including smoked meats and dairy products. Watson and Mylan contended that Emsam, because it is only a 20-milligram dose and isn’t ingested, shouldn’t have a “black box” warning-such as the 30-milligram and 40-milligram pills.

If Emsam is approved, it will be the first FDA-approved skin patch to treat depression. Somerset received conditional approval for Emsam in 2004 and sent regulators additional information in June.

A final decision on Emsam is expected inNovember, Eisenhaur said.

Some on Wall Street are cautious about Emsam because only psychiatrists, rather than general doctors, could prescribe it for particularly hard-to-treat forms of depression.

In published reports, David Woodburn and Christopher Karras, analysts with Prudential Equity Group, have said that Emsam’s annual revenue may only reach $50 million at the most.

Copyright CBJ, L. P. Oct 31-Nov 6, 2005

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