Forest Laboratories Inc.'s (FRX) fiscal fourth-quarter earnings
fell 40% as generic competition to its depression treatment Lexapro
hurt sales, though margins improved.
The company forecast fiscal 2013 earnings of $1.20 to $1.35 a
share, while analysts surveyed by Thomson Reuters expect $1.08 a
share.
Like many drug makers, Forest Labs is looking to bolster its
pipeline as it lost patent protection on its main money maker,
Lexapro, on March 14, and its No. 2 drug, the Alzheimer's and
dementia treatment Namenda, loses exclusivity in 2015. The company
acquired Clinical Data Inc. last year, in hopes antidepressant
Viibryd may help offset lower Lexapro sales, and earlier this month
it bought the high-blood pressure drug Bystolic from Johnson &
Johnson's (JNJ) Janssen Pharmaceutica NV for a one-time cash
payment of $357 million, eliminating all future royalties.
Sales of Lexapro dropped 40% to $355.8 million in the most
recent quarter, while Namenda sales increased about 20% to $393.1
million.
For the quarter ended March 31, Forest Labs reported a profit of
$192.7 million, or 72 cents a share, down from $322.5 million, or
$1.12, a year earlier. Excluding items such as acquisition-related
amortization, earnings fell to 78 cents from $1.14. Revenue dropped
7.3% to $1.06 billion.
Analysts polled by Thomson Reuters had most recently forecast
earnings of 70 cents on revenue of $1.02 billion.
Operating margin rose to 79.8% from 64.1% as input costs dropped
8.4%.
The company increased its selling, general and administrative
costs 17% to support new products, such as Viibryd and the chronic
obstructive pulmonary disease treatment Daliresp, which became
available in June.
Shares closed Monday at $33.64 and were inactive premarket. The
stock is up 11% so far this year.
-By Melodie Warner, Dow Jones Newswires; 212-416-2283;
melodie.warner@dowjones.com