Value Line has initiated coverage of Warner Chilcott plc (WCRX), an Ireland-based global specialty pharmaceuticals company that develops, manufactures, and sells prescription drugs targeted to the gastroenterology, women’s healthcare, dermatology, and urology markets within North America and Western Europe.

Warner Chilcott was essentially spun off by Warner Lambert in 1996, and through a string of acquisitions and divestitures, became the entity it is today. The $3 billion purchase of Procter & Gamble’s (PG - Free Analyst Report) global branded pharmaceuticals division in October, 2009 was by far its most notable acquisition, as it helped to bolster the company’s presence within the highly competitive drug industry by giving it greater scale and wider geographic reach. With the P&G drug business in the fold, Warner gained an extensive sales force and infrastructure, enabling it to better handle the promotion of its products.

As well, the acquisition helped to enhance the company’s development capabilities, and deepen its product pipeline and portfolio, with the addition of three major drugs that complemented the offerings in the women’s healthcare segment, and added new therapeutic areas. The newcomers included: Asacol (for the treatment of ulcerative colitis), which virtually makes up the company’s entire gastroenterology segment, Actonel (a non-injectable drug that prevents and treats osteoporosis in women), and Enablex (a treatment for overactive bladder), which formed the urology category.

The drugmaker has several other key products that it sells. Within women’s healthcare, it offers a range of oral contraceptives, such as Femcon Fe, Ovcon 35, Ovcon 50, Estrostep Fe, and Loestrin 24 Fe, the first birth control treatment that provides 24 days of active therapy versus the traditional dosing regimen of 21 days. Hormone therapy drugs, including Estrace and Femhrt, which are used to treat menopausal symptoms, round out the company’s offerings in the women’s healthcare unit. Within the dermatology branch, it offers Doryx, an oral adjunctive therapy for severe acne.

Additionally, Warner Chilcott currently has drugs in various stages of the R&D pipeline, such as one in Phase II trials for the treatment of congestive heart failure. Other products under development include treatments for osteoporosis in postmenopausal patients and novel small molecules in the preclinical phase. Meanwhile, within the urology division, the company is working on products for erectile dysfunction (ED).

Many of its established drugs face branded and generic competition from the likes of Merck (MRK - Free Analyst Report), Novartis (NVS), Johnson & Johnson (JNJ - Free Analyst Report), Teva (TEVA), and other pharmaceutical manufacturers. In fact, Femhrt already shares the stage with a nonbranded rival that got the FDA’s nod in 2009. Warner also has a host of products (Estrace, Ovcon, and others) that do not have patent protection, and are, therefore, subject to a greater risk of competition and declining sales. Asacol, for instance, has no patent protection in the U.K., while Actonel lost its market exclusivity in Canada earlier in 2010, and is expected to lose exclusivity in certain markets throughout Western Europe before the year is out.

As for its growth strategy, Warner Chilcott focuses on identifying therapeutic areas with established regulatory guidance, and in which products tend to generate high prescription trends. From there, it seeks to develop new medications that complement the available branded drugs. Moreover, R&D efforts largely involve enhancing the formulations and improving the dosage of its existing drugs through product-line extensions, as a way to prolong proprietary protection. Such is the case with the company’s recently approved next-generation Actonel product, which will be marketed under the Atelvia name and features more convenient dosing.

Expanding via in-licensing, acquisition, and partnership opportunities is part of the strategy, too. Warner Chilcott, as well, aims to strengthen its presence in the geographic markets it serves in North America and Western Europe.

At the time of this writing, the author did not have positions in any of the companies mentioned.