Activist investor Carl Icahn criticized Forest Laboratories Inc.
(FRX) for failing to disclose its latest warning letter from the
U.S. Food and Drug Administration for a violation of promotional
practices by the company's sales representatives regarding its drug
Daliresp.
In a letter to Forest Labs dated Aug. 1 that was recently posted
on the agency's website, the FDA said it has become aware of
statements made by the drug maker's sales representatives in
October 2011 to a healthcare professional regarding its chronic
obstructive pulmonary disease treatment Daliresp. The FDA said the
representatives' statements were false or misleading because they
broadened the indication and minimized serious risks for
Daliresp.
The FDA said it is concerned the violations occurred despite the
company's corporate integrity agreement with the Department of
Health and Human Services. It also noted the false and misleading
statements from sales representatives are "particularly troubling"
as the agency had expressed concerns regarding similar violations
as recently as last year. Forest Labs received a warning letter
from the FDA in April 2011 concerning statements made by a sales
representative which promoted unapproved uses for its fibromyalgia
drug Savella drug and minimized risks associated with the drug.
A Forest Labs representative was not immediately available for
comment.
Monday, Mr. Icahn said Forest Labs "has been very aggressive in
its lack of disclosure with the SEC," noting the company did not
disclose the warning letter to shareholders in the 10-Q it filed on
Friday. Mr. Icahn said the lack of disclosure is "another example
of the stark lack of corporate governance," at the company and said
his board nominees could bring the company back to
shareholders.
The long-running spat between the parties was revived in June
when Mr. Icahn, whose investment affiliates own almost 10% of
Forest's shares, nominated four candidates to Forest's 10-member
board and said he was seeking records of the company's actions. In
response, Forest said Mr. Icahn's nominees have "significant and
obvious conflicts and entanglements that compromise their
independence and ability to represent all Forest shareholders."
Shares were up by a penny to $33.96 after hours. The stock is up
12% since the start of the year.
-Write to Nathalie Tadena at nathalie.tadena@dowjones.com
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