Forest Labs 4Q Net Falls 40% As Lexapro Patent Expires; Has Upbeat Year View
04/17/2012| 08:41am US/Eastern
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Forest Laboratories Inc.'s (>> Forest Laboratories, Inc.) fiscal fourth-quarter earnings fell 40% as generic competition to its depression treatment Lexapro hurt sales, though margins improved.
The company forecast fiscal 2013 earnings of $1.20 to $1.35 a share, while analysts surveyed by Thomson Reuters expect $1.08 a share.
Like many drug makers, Forest Labs is looking to bolster its pipeline as it lost patent protection on its main money maker, Lexapro, on March 14, and its No. 2 drug, the Alzheimer's and dementia treatment Namenda, loses exclusivity in 2015. The company acquired Clinical Data Inc. last year, in hopes antidepressant Viibryd may help offset lower Lexapro sales, and earlier this month it bought the high-blood pressure drug Bystolic from Johnson & Johnson's (JNJ) Janssen Pharmaceutica NV for a one-time cash payment of $357 million, eliminating all future royalties.
Sales of Lexapro dropped 40% to $355.8 million in the most recent quarter, while Namenda sales increased about 20% to $393.1 million.
For the quarter ended March 31, Forest Labs reported a profit of $192.7 million, or 72 cents a share, down from $322.5 million, or $1.12, a year earlier. Excluding items such as acquisition-related amortization, earnings fell to 78 cents from $1.14. Revenue dropped 7.3% to $1.06 billion.
Analysts polled by Thomson Reuters had most recently forecast earnings of 70 cents on revenue of $1.02 billion.
Operating margin rose to 79.8% from 64.1% as input costs dropped 8.4%.
The company increased its selling, general and administrative costs 17% to support new products, such as Viibryd and the chronic obstructive pulmonary disease treatment Daliresp, which became available in June.
Shares closed Monday at $33.64 and were inactive premarket. The stock is up 11% so far this year.
-By Melodie Warner, Dow Jones Newswires; 212-416-2283; melodie.warner@dowjones.com
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