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Watson in Discussions With FDA for Consent Decree At Corona, California Manufacturing Facility

- Proposed Terms Allow Corona Facility to Remain Online As Company Moves to Assure FDA of Continued Compliance -

CORONA, Calif., Mar 28, 2002 /PRNewswire-FirstCall via COMTEX/ -- Watson Pharmaceuticals, Inc. (NYSE: WPI) today announced that the Company is in discussions with the U.S. Food and Drug Administration (FDA) on the terms of a proposed consent decree, in a move to assure Watson's continued compliance with current Good Manufacturing Practices (cGMPs) at its Corona, California manufacturing facility. While specific terms of the proposed consent decree are under discussion, the proposed consent decree focuses on assurances that Watson's facility will remain in compliance with cGMP regulations in the future. Watson does not expect to be subject to any fines, a facility shutdown, product recalls, or any reduction in production or service at its Corona facility.

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Watson initiated a multi-year Quality Improvement Program after its receipt from FDA of a warning letter in January 1999. At that time, the FDA found cGMP deficiencies at the Company's Corona facility, primarily relating to quality systems and cGMP compliance, including areas such as training, documentation and laboratory controls. Watson's Quality Improvement Program is designed to take a broad, systemic approach to all aspects of quality compliance.

Since 1999, and in response to observations noted by FDA during subsequent inspections, the most recent of which occurred in Spring 2001, Watson significantly expanded its Corporate Quality Assurance department, which is responsible for quality assurance at all Company manufacturing sites, and has made extensive quality improvements at the Corona facility to enhance the facility's quality systems and procedures. To assist Watson in these efforts, KMI/PAREXEL, a nationally recognized consulting firm specializing in cGMP compliance, was engaged in 2000. Based on specific quality systems audited by KMI/PAREXEL in April 2000 and October/November 2001, KMI/PAREXEL found that the facilities and controls used by Watson at its Corona facility "provide a high degree of assurance that drugs released for distribution will meet the requirements of the [Food, Drug and Cosmetic] Act and applicable GMP Regulations."

Watson believes the quality systems and programs implemented throughout the Company since 1999 have resulted in significant and measurable improvements at its Corona facility and that the Corona facility is in substantial compliance with cGMP regulations. Although no assurances can be made concerning the terms of the anticipated consent decree, whether such an agreement will be reached or its impact on the Company, it is Watson's belief that if such an agreement is reached it will require that Watson's operations at its Corona facility remain in compliance with cGMP regulations and continue the implementation of practices and procedures which are already substantially in place.

"Enhancing our systems to ensure compliance with cGMP requirements has been a primary focus of Watson over the last several years. Our commitment to quality is reflected by our Quality Improvement Program and, more specifically, by the improvements we have implemented and will continue to implement at our Corona facility," said Allen Chao, Watson's Chairman and Chief Executive Officer. "While the FDA seeks assurances that we will maintain and continue our quality commitment, we understand that the safety and quality of our products is not at issue. We intend to maintain and enhance our compliance with cGMP standards through our ongoing quality improvements and initiatives."

Besides the Corona facility, Watson has six other manufacturing facilities in the United States. Watson manufactures 26 of its 170 branded and generic products at its Corona facility and currently is the sole supplier of several of these products. The Company currently has 17 Abbreviated New Drug Applications pending with the FDA, with two pending from its Corona facility.

Watson will host a conference call and webcast Thursday, March 28th at 9:00 a.m. Eastern Standard Time to discuss this release and its quality program. The dial-in number to access the call is (800) 633-8137, or from international locations, (415) 904-2426. A taped replay of the call will be available by calling (800) 633-8284 with access pass code 20476575. The replay may be accessed from international locations by dialing (858) 812-6440 and using the same pass code. This replay will remain in effect until midnight EST, Monday, April 1st, 2002. To access the live webcast, go to Watson's website at www.watsonpharm.com and click on the Investors icon.

Statements contained in this press release that refer to future events or other non-historical facts are forward-looking statements that reflect Watson's current perspective of existing trends and information as of the date of this release. For instance, statements in this press release relating to cGMP compliance issues at the Company's Corona facility and the Company's efforts going forward to resolve those issues, remedies the FDA may seek with respect to those issues, and the prospect and potential terms and effects of a negotiated consent decree resolving such issues are forward-looking statements.

Except as expressly required by law, Watson disclaims any intent or obligation to update these forward-looking statements. Actual results may differ materially from Watson's current expectations depending upon a number of factors. The resolution of the issues with FDA is subject to substantial risks and uncertainties. Many factors could cause the resolution of those issues through a consent decree to differ materially from the Company's forward-looking statements, including the ability of Watson to assure FDA of the quality and reliability of its quality and manufacturing systems and controls at its Corona facility and to comply successfully with FDA and other governmental regulations applicable to Watson's facilities, products and/or business including its Corona facility. The reader of this press release should understand that the failure to reach resolution with FDA through a consent decree or otherwise could result in FDA-initiated litigation. The range of possible sanctions FDA could seek includes, among others, product recalls or seizures, fines, total or partial suspension of production and/or distribution, suspension of the FDA's review of product applications, injunctions, and civil or criminal prosecution. Similar sanctions could also be available to FDA for violation of any consent decree subject to the terms of such decree. In addition, forward looking statements may be adversely affected by other risks and uncertainties as detailed in Watson's periodic public filings with the Securities and Exchange Commission, including but not limited to Watson's Annual Report on Form 10-K for the year ended December 31, 2000 and its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2001, June 30, 2001, and September 30, 2001.

This press release of Watson Pharmaceuticals, Inc. is available at Watson's Web site at www.watsonpharm.com . In addition, this press release is available through PR Newswire's Web site at www.prnewswire.com .

Watson Pharmaceuticals, Inc., headquartered in Corona, California, is a leading specialty pharmaceutical company that develops, manufactures, markets and distributes branded and generic pharmaceutical products. Watson pursues a growth strategy combining internal product development, strategic alliances and collaborations and synergistic acquisitions of products and businesses.

SOURCE Watson Pharmaceuticals, Inc.

CONTACT:
Patty Eisenhaur, Director, Investor Relations of Watson Pharmaceuticals, Inc.,
+1-909-493-5611
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