FRX Forest Road Acquisition Corp

NEW YORK, Oct. 16 /PRNewswire-FirstCall/ -- Forest Laboratories, Inc. (NYSE:FRX), an international pharmaceutical manufacturer and marketer, today announced that fully diluted reported earnings per share equaled $0.71 in the second quarter of fiscal 2008, a decrease of 5% over last year's second quarter's fully diluted reported earnings per share of $0.75. Reported earnings per share were reduced by the effect of a $70 million licensing charge, equivalent to $0.15 per share net of tax, to Microbia, Inc. for the right to co-develop and co-market linaclotide, a compound being investigated for chronic constipation and constipation predominant irritable bowel syndrome. (Logo: http://www.newscom.com/cgi-bin/prnh/20001011/FORESTLOGO ) Revenues for the quarter increased 8.5% to $918,960,000 from $846,975,000 in the year-ago period. Revenues were comprised of net sales, which increased 8.2% to $842,337,000 from $778,676,000 in the prior year. Sales in the quarter included $559,063,000 for Lexapro(R) (escitalopram oxalate), our SSRI for the treatment of depression and anxiety in adults, an increase of 7% from the year-ago period. Namenda(R), our NMDA receptor antagonist for the treatment of moderate and severe Alzheimer's disease, recorded sales of $192,872,000 during the quarter, growth of 24% from last year. Product wholesalers collectively held less inventory of both Lexapro and Namenda at the end of the September quarter which negatively impacted combined sales of these products by approximately $18,000,000. Wholesaler inventory levels for both products are currently at approximately two weeks of sales. Also included in net revenues was other income of $76,623,000 which includes a 2.6% increase to $49,572,000 in earnings contribution from the Benicar(R)* (olmesartan medoxomil) co- promotion agreement. The remaining component of other income was principally interest income. Net income in the current quarter decreased 7% to $225,244,000 from $241,111,000 reported in the second quarter of the prior year. Selling, general and administrative expenses increased 8% to $280,439,000. Research and development expenses increased 82% to $170,738,000 during the quarter which included the $70,000,000 licensing charge made in connection with the Microbia agreement. Fully diluted shares outstanding at September 30, 2007 were 316,852,000 a reduction of 5.7 million shares compared to the year-ago period due mainly to the Company's ongoing share repurchase program. During the just-completed quarter, the Company repurchased approximately 4.95 million shares leaving an additional 17.9 million shares available for repurchase under the existing program, which has no expiration date. Six Month Results Revenues for the six months ended September 30, 2007 increased 11.1% to $1,847,234,000 from $1,663,313,000 in the prior year. Net income for the six months ended September 30, 2007 increased 12% to $493,406,000 from net income of $441,718,000 reported in the six months of the prior year. Reported diluted earnings per share increased 13% to $1.54 in the current year's first six months as compared to diluted earnings per share of $1.36 in last year's six months. Fiscal 2008 Guidance The Company now projects that earnings per share for the fiscal year ending March 31, 2008 will be in a range of $3.10 to $3.20 as compared to prior guidance of a range of $3.05 to $3.15. This guidance excludes the $70 million, equal to $0.15 per share net of tax, licensing charge made in connection with the Microbia agreement, as it was not included in the prior guidance. Research and development spending is expected to be approximately $530 million excluding the $70 million licensing charge. Howard Solomon, Chairman and Chief Executive Officer of Forest, commented: "During the quarter we concluded arrangements with our co-partner Daiichi Sankyo for the launch of Azor(TM), which is occurring this month. In addition, we expect nebivolol to be approved this quarter with a launch scheduled for the fiscal fourth quarter. Both products, with income benefits extending beyond 2012, should soon begin to contribute to earnings. We also expect to file the new drug application for milnacipran this quarter. In addition to the new product launches our core product sales continue to grow and our development pipeline has also advanced. In addition to the results we just announced for RGH-188 for schizophrenia, we expect to see clinical data on five additional later stage studies during the coming year. During the quarter we announced a collaboration with Microbia for the co- development and co-marketing of linaclotide, for chronic constipation and constipation predominant irritable bowel syndrome. We believe this is a promising novel compound that may offer a much needed therapy for this very large and underserved market. Linaclotide, which has already concluded small Phase II studies, is presently being studied in larger Phase II studies with results expected during the first half of 2008." Forest will host a conference call at 10:00 AM EDT today to discuss the results. The conference call will be webcast live beginning at 10:00 AM EDT on the Company's website at http://www.frx.com/ and 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 October 31, 2007 at both websites and also by dialing 1-800- 642-1687 (US investors) or +1-706-645-9291 (international investors) passcode 19769552. About Forest Laboratories and Its Products Forest Laboratories (http://www.frx.com/) is a US-based pharmaceutical company dedicated to identifying, developing, and delivering products that make a positive difference in peoples' lives. Forest Laboratories' growing product line includes Lexapro(R) (escitalopram oxalate), an SSRI indicated for adults for the initial and maintenance treatment of major depressive disorder and for generalized anxiety disorder; 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, and Benicar* HCT(R) (olmesartan medoxomil- hydrochlorothiazide), an angiotensin receptor blocker and diuretic combination product, each indicated for the treatment of hypertension; and Campral(R)* (acamprosate calcium), indicated in combination with psychosocial support for the maintenance of abstinence from alcohol in patients with alcohol dependence who are abstinent at treatment initiation. *Benicar is a registered trademark of Daiichi Sankyo, and Campral is a registered trademark of Merck Sante s.a.s., subsidiary of Merck KGaA, Darmstadt, Germany. 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, 2007 and on Form 10-Q for the period ended June 30, 2007. FOREST LABORATORIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) THREE MONTHS SIX MONTHS ENDED SEPTEMBER 30 ENDED SEPTEMBER 30 (In thousands, except per share amounts) 2007 2006 2007 2006 Revenues: Net sales $842,337 $778,676 $1,684,953 $1,537,444 Contract revenue 50,313 48,909 103,690 91,571 Interest income 24,932 19,100 51,670 33,753 Other income 1,378 290 6,921 545 Net revenues 918,960 846,975 1,847,234 1,663,313 Costs and expenses: Cost of goods sold 189,992 185,098 376,232 360,783 Selling, general and administrative 280,439 259,008 541,767 503,391 Research and development 170,738 93,752 307,646 232,834 641,169 537,858 1,225,645 1,097,008 Income before income tax expense 277,791 309,117 621,589 566,305 Income tax expense 52,547 68,006 128,183 124,587 Net income $225,244 $241,111 $493,406 $441,718 Net income per share: Basic $0.71 $0.76 $1.55 $1.38 Diluted $0.71 $0.75 $1.54 $1.36 Weighted average number of shares outstanding: Basic 315,510 317,809 317,534 319,623 Diluted 316,852 322,581 319,375 324,256 http://www.newscom.com/cgi-bin/prnh/20001011/FORESTLOGO http://photoarchive.ap.org/ DATASOURCE: 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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