Forest Laboratories Inc.'s (FRX) fiscal first-quarter profit
slumped 55% on litigation charges and product-licensing fees. Sales
improved and results beat analysts' expectations.
As such, the drug maker raised projected 2010 earnings by 17
cents to $3.67 to $3.77 a share.
Like many drug makers, Forest Labs is also looking to partner
with drug developers to bolster its pipeline. Forest Lab's
blockbuster drug Lexapro, a depression treatment, will expire in
March 2012. Sales of Lexapro have also slowed in the past year,
while a rival drug, Eli Lilly & Co.'s (LLY) Cymbalta, has seen
revenue increase. Lexapro sales were flat in the period at $565.2
million.
Sales of Namenda, the company's No. 2 drug and a treatment for
Alzheimer's and dementia, jumped 19%.
New-drug approval delays have also weighed on sentiment. Daxas
received an unfavorable review from the U.S. Food and Drug
Administration panel earlier this year for safety reasons. Chairman
and Chief Executive Howard Solomon said Tuesday the company has
received a complete response from the FDA, requiring additional
information and analysis. Analysts predicted the drug, which treats
chronic obstructive pulmonary disease, would generate annual sales
of about $500 million.
For the quarter ended June 30, Forest Labs reported a profit of
$117.5 million, or 39 cents a share, down from $262.9 million, or
87 cents a share, a year earlier. The latest quarter included 66
cents of litigation charges and product-licensing fees. Revenue
increased 6% to $1.07 billion.
Analysts polled by Thomson Reuters most recently estimated
earnings of 86 cents and $1.06 billion in revenue.
Gross margin fell slightly to 78.3% from 78.5%.
Shares closed at $28.32 Monday and didn't trade premarket. The
stock has fallen 12% this year.
-By Jodi Xu, Dow Jones Newswires; 212-416-3037;
jodi.xu@dowjones.com