NEW YORK, Jan. 17 /PRNewswire-FirstCall/ -- Forest Laboratories,
Inc. (NYSE:FRX), an international pharmaceutical manufacturer and
marketer, today reported financial results for its fiscal third
quarter ended December 31, 2005. (Logo:
http://www.newscom.com/cgi-bin/prnh/20001011/FORESTLOGO ) Revenues
for the quarter decreased 9% to $757,830,000 from $832,343,000 in
the year-ago period. Revenues were comprised of net sales of
$714,887,000, a decrease of 10% from $795,047,000 in the year-ago
period, contract revenue of $28,373,000, an increase of 19% from
$23,813,000 in the year-ago period and other income of $14,570,000,
which increased 8% from $13,483,000 in the year- ago period. Sales
in the quarter included $485,687,000 for Forest's antidepressant
franchise which was comprised of $480,707,000 of Lexapro(R)
(escitalopram oxalate), an SSRI indicated for the initial and
maintenance treatment of major depressive disorder and generalized
anxiety disorder in adults, $4,823,000 of Celexa(R) (citalopram
HBr), an antidepressant, and $157,000 of generic citalopram. The
year-ago period included $560,640,000 of antidepressant franchise
sales which was comprised of $427,118,000 of Lexapro, $129,812,000
of branded Celexa and $3,710,000 of generic citalopram. Sales of
Namenda(R), an NMDA receptor antagonist for the treatment of
moderate to severe Alzheimer's disease, totaled $124,022,000 in the
quarter compared to sales of $100,603,000 in last year's third
quarter. Other income included earnings from the co-promotion
agreement with Sankyo Pharma for Benicar(R)* and Benicar HCT(R),
antihypertensive therapies, of $28,290,000 and interest income of
$14,229,000. Additional contract revenue and other income totaled
$424,000. Selling, general and administrative expenses increased 3%
to $250,725,000. Research and development spending increased 22% to
$94,188,000 during the quarter and included a one-time upfront
payment equal to $0.05 per share to Gedeon Richter for U.S. and
Canadian rights to RGH-896, a compound being developed for the
treatment of chronic pain and other CNS conditions and a group of
novel compounds that target the group 1 metabotropic glutamate
receptors (mGLUR1/5). The year-ago period also included an upfront
payment to Gedeon Richter Limited for the U.S. and Canadian rights
to RGH-188, a compound being investigated for the treatment of
schizophrenia, bipolar mania and other psychiatric disorders. Net
income in the current quarter decreased by 25% to $195,163,000 as
compared to $260,805,000 reported in the third quarter of the prior
year. Diluted earnings per share decreased 19% to $0.57 in the
current quarter including the $.05 per share payment to Gedeon
Richter, compared to earnings per share of $0.70 in the year-ago
period. Fully diluted shares outstanding for the third quarter were
340,663,000, a reduction of 30,975,000 shares due mainly to the
Company's ongoing share repurchase program. During the quarter the
Company purchased 12,343,300 shares under its current 25 million
share authorization. The Company expects to complete the repurchase
of the 10,256,700 shares remaining under the current program during
the quarter ending March 31, 2006. Nine-month results Revenue for
the nine months ended December 31, 2005 decreased 12% to
$2,206,068,000 from $2,506,403,000 in the prior year. Net income
for the nine months ended December 31, 2005 decreased 22% to
$616,624,000 from net income of $786,050,000 reported in the nine
months of the prior year. Diluted earnings per share decreased 14%
to $1.79 in the current year's first nine months as compared to
diluted earnings per share of $2.09 for last year's nine months.
Howard Solomon, Chairman and Chief Executive Officer of Forest,
said: "During the quarter sales for our key promoted products
increased compared to the prior year. Our additional collaborations
with Gedeon Richter Limited announced during the quarter are
important pipeline additions in the CNS area in which Gedeon
Richter focuses and which produced the antipsychotic licensed from
Gedeon Richter in 2004 which is now in clinical testing. With these
new collaborations we will be exploring areas such as chronic pain,
anxiety, depression and related conditions. These programs
strengthen our longer-term development pipeline while the just
announced licensing agreement with Mylan Laboratories Inc. for
nebivolol, a beta-blocker for the treatment of hypertension and
potentially congestive heart failure, represents a significant
near-term product opportunity for the Company. We continue to
evaluate additional product opportunities that could be
commercialized near, mid, and longer term." Mr. Solomon continued:
"Regarding our patent litigation trial against IVAX
Pharmaceuticals, Inc., it is scheduled to begin on March 15, 2006
in U.S. Federal District Court in Delaware and we continue to
remain confident in the validity of the Lexapro patent." Fiscal
2006 Guidance The Company continues to expect adjusted fully
diluted earnings per share of approximately $2.30 for the fiscal
year ending March 31, 2006, excluding the effect of the one-time
tax benefit recorded in the fiscal first quarter. Including the
one-time tax benefit, reported fully diluted earnings per share are
projected to be approximately $2.40. The Company continues to
expect that revenues will total approximately $3 billion and
forecasts that net sales will total approximately $2.8 billion. The
Company currently forecasts Lexapro sales of approximately $1.9
billion and Namenda sales of approximately $500 million. Research
and development spending is now forecast at approximately $280
million, a reduction of $40 million in the projection from last
quarter due to the timing of various potential milestone payments
shifting into next fiscal year. The projection includes the payment
to Gedeon Richter which was made in the just completed quarter.
Selling, general and administrative expenses are projected to grow
to just over $1.03 billion. The upfront payment to Gedeon Richter
of $0.05 per share in the just- completed quarter was not included
in the Company's prior guidance nor was any impact from the ongoing
share repurchase program. These two factors are projected to offset
each other and are now included in the $2.30 per share estimate.
Forest will host a conference call at 10:00 AM EST today to discuss
the results. The conference call will be webcast live beginning at
10:00 AM EST on the Company's website at http://www.frx.comand/
also on the website http://www.streetevents.com/. Please log on to
either website at least fifteen minutes prior to the conference
call as it may be necessary to download software to access the
call. A replay of the conference call will be available until
January 31, 2006 at both websites and also by dialing
1-800-642-1687 (US investors) or +1-706-645-9291 (international
investors) passcode 3995668. About Forest Laboratories and Its
Products Forest Laboratories' growing line of products includes:
Lexapro(R) (escitalopram oxalate), an SSRI antidepressant indicated
for the initial and maintenance treatment of major depressive
disorder and for generalized anxiety disorder in adults; Namenda(R)
(memantine HCl), an N-methyl-D-aspartate (NMDA)-receptor antagonist
indicated for the treatment of moderate to severe Alzheimer's
disease; Benicar(R) * (olmesartan medoxomil), an angiotensin
receptor blocker indicated for the treatment of hypertension;
Benicar* HCT(R) (olmesartan medoxomil hydrochlorothiazide), an
angiotensin receptor blocker and diuretic combination product
indicated for the second-line treatment of hypertension; Campral(R)
* (acamprosate calcium), a glutamate receptor modulator, indicated
for the maintenance of abstinence from alcohol in patients with
alcohol dependence who are abstinent at treatment initiation in
combination with psychosocial support; and Combunox(TM) (Oxycodone
HCl and Ibuprofen), an opioid and NSAID combination indicated for
the short-term management of acute, moderate to severe pain. Except
for the historical information contained herein, this release
contains "forward-looking statements" within the meaning of the
Private Securities Reform Act of 1995. These statements involve a
number of risks and uncertainties, including the difficulty of
predicting FDA approvals, acceptance and demand for new
pharmaceutical products, the impact of competitive products and
pricing, the timely development and launch of new products and the
risk factors listed from time to time in the Company's SEC reports,
including the Company's Annual Report on Form 10-K for the fiscal
year ended March 31, 2005 and on Form 10-Q for the periods ended
June 30, 2005 and September 30, 2005. * Benicar is a registered
trademark of Sankyo Pharma, Inc., and Campral is a registered
trademark under license from Merck Sante s.a.s., subsidiary of
Merck KGaA, Darmstadt, Germany. FOREST LABORATORIES, INC. AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) THREE
MONTHS NINE MONTHS ENDED DECEMBER 31 ENDED DECEMBER 31 (In
thousands, except per share amounts) 2005 2004 2005 2004 Revenues:
Net sales $714,887 $795,047 $2,081,173 $2,434,123 Contract revenue
28,373 23,813 86,945 39,055 Other income 14,570 13,483 37,950
33,225 Net revenues 757,830 832,343 2,206,068 2,506,403 Costs and
expenses: Cost of goods sold 165,875 176,431 483,136 545,298
Selling, general and administrative 250,725 242,863 772,435 727,256
Research and development 94,188 77,393 216,054 231,901 510,788
496,687 1,471,625 1,504,455 Income before income tax expense
247,042 335,656 734,443 1,001,948 Income tax expense 51,879 74,851
117,819 215,898 Net income $195,163 $260,805 $616,624 $786,050 Net
income per share: Basic $0.58 $0.71 $1.81 $2.13 Diluted $0.57 $0.70
$1.79 $2.09 Weighted average number of shares outstanding: Basic
336,890 364,914 340,160 368,227 Diluted 340,663 371,638 344,801
376,930
http://www.newscom.com/cgi-bin/prnh/20001011/FORESTLOGODATASOURCE:
Forest Laboratories, Inc. CONTACT: Charles E. Triano, Vice
President - Investor Relations, of Forest Laboratories, Inc.,
+1-212-224-6714, or Web site: http://www.frx.com/
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