Watson Pharmaceuticals, Inc. and Warner Chilcott Limited announced that they have entered into settlement and license agreements to resolve pending patent litigation related to Warner Chilcott's oral contraceptive products, Loestrin 24 and Femcon Fe.

Separately, Warner Chilcott and Watson have entered into a co-promotion agreement relating to Warner Chilcott's Femring product and license and supply agreements relating to a Warner Chilcott development-stage oral contraceptive product.

Under the terms of the settlement agreements, Warner Chilcott has granted Watson a non-exclusive license to the US patents covering Loestrin 24 Fe (norethindrone acetate and ethinyl estradiol tablets, USP and ferrous fumarate tablets) and Femcon Fe (norethindrone, ethinyl estradiol tablets, chewable, ferrous fumarate tablets). The agreement covering Loestrin 24 Fe will permit Watson to commence marketing its generic equivalent product on the earlier of January 22, 2014 or the date on which another generic version of Loestrin 24 Fe enters the US market. The agreement covering Femcon Fe will permit Watson to commence marketing its generic equivalent product on the earlier of 180 days after Barr Laboratories, Inc. (now Teva Pharmaceutical Industries, Ltd.) enters the market with a generic equivalent product, or January 1, 2013. The parties will promptly file dismissals without prejudice that will conclude both litigations. Additional details concerning the settlements have not been disclosed.

In a separate agreement, Watson will co-promote Warner Chilcott's hormone therapy product, Femring. Watson's Specialty Products sales force will promote the product to obstetricians and gynaecologists commencing in 2009, for which it will receive fee-based compensation. Warner Chilcott will also pay Watson a portion of the net sales of Femring above an agreed upon level for the duration of the agreement. Warner Chilcott's net sales of Femring were approximately $15.7 million for the twelve months ended September 30, 2008.

Under separate license and supply agreements, Warner Chilcott has granted Watson an exclusive license to market and sell an oral contraceptive product (WC3026) currently in late-stage development. Warner Chilcott is responsible for completing development and obtaining approval of this product and expects to submit a new drug application to the FDA in the second half of 2009. Warner Chilcott will exclusively supply Watson with the product on a cost plus margin basis and Watson will pay Warner Chilcott royalties based on product net sales.

Warner Chilcott is a specialty pharmaceutical company focused on developing, manufacturing, marketing and selling branded prescription pharmaceutical products in women's healthcare and dermatology in the US.