Watson Expands Women’s Health Portfolio

Watson Pharmaceuticals, Inc. entered an agreement to acquire exclusive U.S. rights to Columbia Laboratories, Inc.’s bioadhesive progesterone gel products currently marketed as Crinone and Prochieve for the indications of infertility and secondary amenorrhea. The two companies will collaborate for the ongoing Phase III development program for a new indication for these products for the prevention of preterm birth, as well as a global development program for second-generation products for this indication and infertility.

Watson will provide Columbia with an initial $47 million payment and 11.2 million newly issued shares of Columbia common stock. Additional payments based on the successful completion of development milestones, regulatory approvals and product launches could total approximately $45.5 million. Watson will also pay Columbia a royalty on sales of the progesterone gel product and any next generation products. Columbia will be responsible for clinical and regulatory costs related to obtaining approvals, and pursuant to a supply agreement, will be responsible for manufacturing the progesterone gel products.

“The addition of Crinone and Prochieve demonstrates our commitment to expand our emerging position in distinctive women’s healthcare products,” said Paul Bisaro, Watson’s president and chief executive officer. “Crinone has a proven record in infertility, and we are confident in our ability to expand its acceptance using our specialty Ob/Gyn sales team. In addition, if we are successful in receiving FDA approval for a new preterm birth indication, we will have the opportunity to create a new market and address a significant and unmet medical need.”

The acquisition, subject to customary closing conditions, is expected to close in 2Q10.