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Watson beefs up R&D effort with $305M women's health buyout

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Watson will gain late-stage contraceptive and fertility drugs in a buyout of Uteron Pharma--courtesy of Uteron Pharma

With an eye to boosting its pipeline of experimental drugs for women's health, generics giant Watson Pharmaceuticals ($WPI) has swooped in and acquired Belgium's Uteron Pharma in a $305 million deal. The buyout gives Watson a pair of late-stage contraceptive and fertility drugs and another oral contraceptive that could make it to the market by 2018. Watson agreed to pay $150 million in cash along with $155 million in potential milestones, including $45 million in near-term targets.

Like Teva ($TEVA), another generics company doing more deals on experimental therapies, Watson has been beefing up the R&D side of the business to deliver future products that can continue the fast growth it's been seeing. That strategic move among generics companies is adding a new set of potential bidders in the global M&A game now under way in the biotech industry.

Uteron is a spinoff from the University of Liege in Belgium, and Watson is adding co-CEO and co-founder Stijn Van Rompay and CSO and co-founder Professor Jean-Michel Foidart to its growing research effort aimed at women's health. 

"We have structured the financials of the acquisition to reflect the immediate value of the late-stage pipeline, with approximately $45 million in near-term milestones and appropriately balancing the development risks and investments required to commercialize these assets, when compared to the longer-term opportunities," noted Fred Wilkinson, president of Watson Global Brands and Biosimilars. 

"The acquisition capitalizes on the growing potential of the expanded global commercial footprint for our women's health brand franchise following the Actavis acquisition," he added. "As a result of the Uteron acquisition, Watson welcomes the opportunity to access resources within the Walloon Region of Belgium, and acquires a valuable source of research and innovation. We also look forward to expanding our R&D team with the inclusion of the research and clinical professionals in Liege, Belgium, as well as continuing their ongoing collaborations with the University of Liege. This transaction is a first step in fulfilling our promise to enhance our branded opportunities globally, while creating near-term revenue for global brands and further expanding our women's health development portfolio."

- here's the press release

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