Forest Laboratories, Inc. (NYSE: FRX), an international
pharmaceutical manufacturer and marketer, today announced that
reported earnings per share equaled $1.11 in the third quarter of
fiscal 2011 after taking a charge for a new product licensing fee
of $66.1 million or $0.23 per share, net of tax. During the
quarter, the Company entered into a licensing agreement with the
Gruenenthal Group (Gruenenthal) for the co-development and
commercialization of GRT 6005 and its follow-on compound GRT 6006,
first in class novel small molecule analgesic compounds for the
treatment of moderate to severe chronic pain. Reported earnings per
share in the third quarter of fiscal 2010 were $0.69 after charges
for a new product licensing fee of $75.0 million, or $0.25 per
share net of tax, related to a licensing agreement with Almirall,
S.A. (Almirall) for LAS100977, for the treatment of both asthma and
chronic obstructive pulmonary disease (COPD); and certain
restructuring costs related to our Long Island packaging facility
of $14.0 million, or $0.03 per share net of tax.
Net sales for the quarter increased 6.7% to $1,063.9 million,
from $997.0 million in the year-ago period. Sales of Lexapro®
(escitalopram oxalate), a selective serotonin reuptake inhibitor
(SSRI) for the initial and maintenance treatment of major
depressive disorder in adults and adolescents and generalized
anxiety disorder in adults were $586.5 million compared with $582.6
million in the year-ago period. Namenda® (memantine HCl), an NMDA
receptor antagonist for the treatment of moderate and severe
Alzheimer’s disease, recorded sales of $319.8 million during the
quarter, an increase of 13.2% from last year’s third quarter. Sales
of Bystolic® (nebivolol), a beta-blocker for the treatment of
hypertension, were $68.1 million. Bystolic was launched in January
2008, and sales in last year’s fiscal third quarter were $47.5
million. The Company’s newest product, Savella® (milnacipran HCl),
a selective serotonin norepinephrine dual reuptake inhibitor (SNRI)
for the management of fibromyalgia, recorded sales of $24.6
million. Savella was launched in April 2009, and sales in last
year’s fiscal third quarter were $15.4 million. Contract revenue
decreased 16.1% to $46.8 million, principally due to a decrease of
17.1% in Benicar® (olmesartan medoxomil) co-promotion income to
$42.8 million, compared to last year’s third quarter. Per the
agreement with Daiichi Sankyo, Forest’s active co-promotion of
Benicar ended in the first quarter of fiscal 2009 and the Company
now receives a gradually reducing residual royalty until the end of
March 2014.
Cost of sales as a percentage of sales was 23.4% compared with
24.8% in last year’s third quarter. During last year’s third
quarter the Company recorded a one-time restructuring charge
related to its Long Island packaging facility. Excluding the
one-time charge, cost of sales as a percentage of sales would have
been 23.4% for the prior year’s quarter.
Selling, general and administrative expense for the current
quarter was $285.7 million as compared to $307.0 million in the
year-ago quarter. The current level of spending reflects the
resources and activities required to support our currently marketed
products, particularly our newest products, Bystolic and Savella.
Research and development spending for the current quarter was
$200.8 million compared with $233.6 million in last year’s third
quarter. The current third quarter included an upfront licensing
payment of $66.1 million to Gruenenthal and the prior year third
quarter included a $75.0 million upfront licensing payment to
Almirall. Excluding such payments, R&D spending for the current
fiscal quarter decreased 15.1%. The current quarter included
product development milestone payments of $4.2 million compared to
$23.7 million of milestones in the prior year’s quarter.
Income tax expense for the quarter was $70.7 million, reflecting
a quarterly effective tax rate of 18.1% due in large measure to the
reinstatement of the R&D tax credit. Reported net income for
the quarter ended December 31, 2010 was $320.7 million or $1.11 per
share compared to $210.2 million or $0.69 per share reported for
last year’s third quarter.
Diluted shares outstanding at December 31, 2010 were
287,999,000, a reduction of approximately 15.8 million shares
compared to the year-ago period due mainly to the Company’s
accelerated share repurchase program.
Nine-month Results
Revenues for the nine months ended December 31, 2010 increased
4.6% to $3.3 billion from $3.1 billion in the prior year.
Net income for the nine months ended December 31, 2010 increased
9.8% to $724.3 million from $659.8 million reported in the prior
year. Reported earnings per share increased 14.3% to $2.48 in the
current year’s nine months as compared to earnings per share of
$2.17 in last year’s nine months.
Fiscal 2011 Guidance
The Company now expects that earnings per share for the fiscal
year ending March 31, 2011 will be in the range of $4.20 to $4.30,
excluding the charges in the June quarter related to the settlement
with the United States Department of Justice and the upfront
licensing payment to TransTech Pharma, excluding the upfront
licensing payment to Gruenenthal in the current quarter, but
including the impact of the accelerated share repurchase
transaction.
Howard Solomon, Chairman and Chief Executive Officer of Forest,
said: “We continue to focus on realizing full potential from our
currently promoted products as well as progressing and expanding
our product development pipeline in order to assure future growth
for our Company. Our newest products, Bystolic and Savella,
continued to exhibit strong growth during the quarter. During the
quarter we received first cycle approval from the FDA for Teflaro™,
our new broad-spectrum cephalosporin for the treatment of
community-acquired bacterial pneumonia (CABP) and acute bacterial
skin and skin structure infection (ABSSSI). Teflaro is our fourth
new drug approval from the fourth different division of the FDA
(including Bystolic, Savella and Namenda XR) in the last three
years.
We were pleased to announce, along with our partner Ironwood
Pharmaceuticals, Inc., positive top-line results from a Phase III
clinical trial assessing the efficacy and safety of linaclotide for
the treatment of patients with irritable bowel syndrome with
constipation (IBS-C). With the successful completion of this
clinical trial we now have two positive Phase III IBS-C trials and
two positive Phase III chronic constipation (CC) trials. We look
forward to filing the linaclotide NDA for both indications in the
third quarter of 2011.
During the quarter we also announced three new business
development agreements, two of which will help expand our
commercial capabilities outside of the United States. We entered
into a collaboration and distribution agreement with Janssen to
commercialize Bystolic and Savella in Canada. Over the next few
years we plan to establish a wholly-owned Canadian affiliate that
will exercise the co-promotion rights for Bystolic and Savella in
Canada, and that will also take responsibility for the future
regulatory filings and commercialization of our pipeline products
in Canada which currently include Teflaro, linaclotide,
levomilnacipran and cariprazine. We also entered into an agreement
with Gruenenthal to acquire all rights currently held by
Gruenenthal for colistin and all rights previously licensed by our
Company to Gruenenthal for Colobreathe. Both products are for the
treatment of cystic fibrosis. We currently market colistin in the
UK and Ireland. With this transaction, we will expand our European
cystic fibrosis franchise while expanding our commercial
capabilities in Europe in addition to our existing presence in the
UK and Ireland. In addition to the aforementioned agreement with
Gruenenthal we were also pleased to announce that we entered into a
licensing agreement with Gruenenthal for the development and
commercialization of GRT 6005 and its follow-on compound GRT 6006,
first in class novel small molecule analgesic compounds for the
treatment of moderate to severe chronic pain.
Earlier this month we were delighted to announce, along with our
partner Almirall, positive top-line results from a Phase III
clinical trial assessing the efficacy and safety of aclidinium for
the treatment of patients with COPD. The successful completion of
this study confirms the efficacy reported in a previous study of
aclidinium for COPD. We look forward to filing the aclidinium NDA
in mid-2011.”
Use of Non-GAAP Financial
Information
This press release contains non-GAAP earnings per share
information adjusted to exclude certain costs, expenses and other
specified items as summarized in the table below. This information
is intended to enhance an investor's overall understanding of the
Company's past financial performance and prospects for the future.
This information is not intended to be considered in isolation or
as a substitute for earnings per share prepared in accordance with
GAAP.
FOREST LABORATORIES, INC. AND
SUBSIDIARIES
SUPPLEMENTAL FINANCIAL
INFORMATION
THREE MONTHS NINE MONTHS ENDED
ENDED DECEMBER 31 DECEMBER 31
2010
2009
2010
2009
Reported earnings per share: $1.11 $0.69 $2.48 $2.17 Specified
items, per share, net of tax: DOJ investigations 0.39 Licensing
payments to TransTech Pharma for glucose-lowering agents 0.17
Licensing payment to Nycomed for Daxas 0.33 Licensing payment to
Gruenenthal for oral small molecule analgesics 0.23 0.23
Licensing payment received from
AstraZeneca for ceftaroline
(0.13) Settlement payment to Caraco related to
Lexapro
0.04 Restructuring costs 0.03 0.03 Licensing payment to Almirall
for LAS100977
- 0.25 0.25 Rounding
0.02 Adjusted Non-GAAP earnings per
share: $1.34 $0.97
$3.29 $2.69
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 www.frx.com
and also on the website 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
February 17, 2011 at both websites and also by dialing (800)
642-1687 (US or Canada) or +1 706 645-9291 (International),
Conference ID: 31698923.
About Forest Laboratories and Its
Products
Forest Laboratories’ (NYSE: FRX) longstanding global
partnerships and track record developing and marketing
pharmaceutical products in the United States have yielded its
well-established central nervous system and cardiovascular
franchises and innovations in anti-infective medicine. The
Company’s pipeline, the most robust in its history, includes
product candidates in all stages of development across a wide range
of therapeutic areas. The Company is headquartered in New York, NY.
To learn more, visit www.FRX.com.
Except for the historical information contained herein, this
release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These
statements involve a number of risks and uncertainties, including
the difficulty of predicting FDA approvals, the 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 Forest
Laboratories' Annual Report on Form 10-K, Quarterly Reports on Form
10-Q and any subsequent SEC filings.
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)
2010
2009
2010
2009
Revenues: Net sales $1,063,878 $ 997,002 $3,121,268
$2,907,958 Contract revenue 46,785 55,755 128,442 154,053 Interest
income 7,098 7,302 22,604 28,913 Other income
8,575
4,621 9,124 45,841 Net
revenues 1,126,336 1,064,680
3,281,438 3,136,765 Costs and
expenses: Cost of goods sold 248,428 247,648 726,372 685,553
Selling, general and administrative 285,662 306,962 1,050,417
943,693 Research and development
200,825
233,609 574,993 643,814
734,915 788,219 2,351,782
2,273,060 Income before income tax
expense 391,421 276,461 929,656 863,705 Income tax expense
70,714 66,229 205,361
203,913 Net income $ 320,707
$ 210,232 $ 724,295 $
659,792 Net income per share: Basic
$1.11 $0.69 $2.48
$2.18 Diluted
$1.11 $0.69
$2.48 $2.17
Weighted average number of
shares outstanding:
Basic
287,704 303,348
292,066 303,097 Diluted
287,999 303,845 292,168
303,590
Forest Road Acquisition (NYSE:FRX)
Historical Stock Chart
From May 2024 to Jun 2024
Forest Road Acquisition (NYSE:FRX)
Historical Stock Chart
From Jun 2023 to Jun 2024