Watson Pharmaceuticals has expanded its women's health franchise with the acquisition of Belgium's Uteron Pharma.

The US generics major is paying $150 million in cash upfront, and up to $155 million in potential future milestone payments. For its cash, Watson is getting hold of "two potential near-term global commercial opportunities in contraception and infertility".

First up is Levosert, an intrauterine device designed to initially deliver 20 mcg of levonorgestrel per day for long-term contraception and the treatment of heavy bleeding. The product, partnered with Hungary's Gedeon Richter and Medicines360, is currently pending approval in several European countries and is in Phase III for the US market.

The second late-stage product is Diafert, a non-invasive immunoassay kit for the assessment of egg quality during in vitro fertilisation, which could be launched in Europe by the end of the year and in the USA in 2014. Further down the line, in Phase II is a contraceptive called Estelle (estetrol) and Uteron has "multiple potential products in early-stage development",  including Vaginate for vaginal infections and Colvir, for the treatment of premalignant human papilloma virus lesions.

Fred Wilkinson, president of Watson Global Brands and Biosimilars, said that "this is a strategic acquisition of a solid pipeline, sound development expertise and sufficient manufacturing capacity to generate value for shareholders within the next two years". He noted that the financials of the deal have been structured the financials of the acquisition "to reflect the immediate value of the late-stage pipeline, with approximately $45 million in near-term milestones".

Mr Wilkinson added that the acquisition capitalizes on the growing potential of the expanded global commercial footprint for our women's health brand franchise following the Actavis acquisition", in October. As for Uteron, a spin-off from the University of Liege which has 60 staff, its executive team will continue to manage the company within the Watson group. _

The transaction is expected to be minimally dilutive to Watson's earnings in 2013 and 2014, and accretive in 2015.