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Watson becomes Actavis, and already future is muted

Guidance disappoints analysts
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Watson Pharmaceuticals is no more. The generic drug company has officially taken the name of its most recent acquisition target, Actavis ($ACT), thinking it has better brand recognition in the markets where it intends to expand.

In guidance today, however, the company said that growth will not be quite as fast this year as analysts had expected, Reuters reports.

The $5.5 billion Actavis merger, completed in November, propelled the company into third place among the world's generics makers, behind Teva Pharmaceuticals ($TEVA) and Novartis' ($NVS) Sandoz unit. But CEO Paul Bisaro said the deal also would allow Watson, now Actavis, not only to play on a global stage but also to build up a branded drug business to supplement lower-margin generics. Growth is the very reason that the company chose take the Actavis moniker. The former Iceland-based company has a strong brand ID in some emerging markets where the combined company intends to grow the most.

Bisaro said the combined company would be able to carve about $300 million in annual operating costs out of the combined company in the next three years. Still, this year will be a challenge for growth. According to Reuters, Actavis today projected earnings per share this year in the range of $7.70 to $8.10 per share, while analysts on average were looking for $8.20 per share.

- read the Reuters story

Special Report: Watson - Top 11 Fastest-Growing Generics Companies

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