Forest Laboratories Inc.'s (FRX) fiscal fourth-quarter profit
slumped 76% amid an acquisition-related charge as revenue increased
and adjusted earnings improved.
Shares were down 1.1% to $27.70 in premarket trading as earnings
fell just shy of analysts' expectations. The stock was off 13% so
far this year through Monday.
Analysts are eyeing the drug maker with caution after a Food
& Drug Administration panel recently advised against approval
of the company's lung-disease drug. Some analysts predicted Daxas,
also called roflumilast, would generate annual sales of about $500
million.
As sales of the company's banner anti-anxiety drug Lexapro have
begun to slow in recent quarters, Forest may have to scramble to
make up the difference. Lexapro sales currently comprise about 60%
of the company's total sales.
The company is also hustling to find drug-development
partnerships to fill its pipeline before Lexapro's patent expires
in March 2012. Partnerships would help the company share costs and
risk in an environment of stingy lending. Forest Labs sells Lexapro
for Denmark's H. Lundbeck AS (HLUKY LUN.KO) in the U.S. The drug
competes with Eli Lilly & Co.'s (LLY) Cymbalta depression
treatment.
For the quarter ended March 31, Forest Labs reported earnings of
$22.6 million, or 7 cents a share, compared with $92.8 million, or
31 cents a share, a year earlier. Excluding charges such as the
charge related to an acquisition agreement with AstraZeneca PLC
(AZN), earnings increased to 83 cents from 76 cents as revenue rose
9.4% to $1.06 billion.
Analysts polled by Thomson Reuters expected earnings, excluding
items, of 84 cents on revenue of $1.05 billion.
Lexapro sales rose 1.4%, while Namenda sales, the company's No.
2 drug and a treatment for Alzheimer's and dementia, rose 22%.
-By Rachel Rosenthal and Nathan Becker, Dow Jones Newswires;
212-416-2263; rachel.rosenthal@dowjones.com