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Forest Lab Q2 Profit Plunges On Lexapro Patent Loss, Cuts Full Year View

10/16/2012 9:41 AM ET

Forest Laboratories, Inc. (FRX: Quote), a pharmaceutical manufacturer and marketer, on Tuesday said profit in the second quarter plunged from last year, hit by the loss of patent protection for anxiety disorder drug Lexapro. The company also cut its forecast for the year.

Net income fell to $20.78 million from $249.81 million. Earnings per share declined to $0.08 from $0.91 in the prior year. Adjusted earnings were $0.15 per share, while in the prior the company recorded $0.95 per share.

Net sales decreased 38.8 percent to $692.02 million from $1.130 billion in the year-ago quarter. Net revenues slid to $760.64 million from $1.17 billion.

Anxiety disorder drug Lexapro's sales plunged to $44.7 million from $596.1 million, as its patent protection expired on March 14.

Sales of Namenda, for the treatment of moderate and severe Alzheimer's disease, climbed 9 percent to $367.6 million. Hypertension drug Bystolic's sales advanced 29.4 percent to $106.5 million.

Collectively, the next generation products Bystolic, Savella, Teflaro, Daliresp and Viibryd had sales of $202 million in the quarter, representing 69 percent growth in comparison to last year.

The company now expects earnings for the fiscal year ending March 31, 2013 in the range of $0.15 to $0.30 including acquisition related amortization. Adjusted earnings per share are estimated in the range of $0.45 to $0.60.

Total net revenue, including product sales as well as the earnings contribution from Benicar, authorized generic sales of Lexapro, interest income and other income, is now expected to be $3.2 billion compared with the previous estimate of $3.4 billion.

Analysts estimate full year earnings per share of $0.66 and revenue of $3.26 billion.

In June, the company had expected GAAP earnings of $0.65 to $0.80 per share and adjusted earnings per share of $0.95 to $1.10.

Forest Laboratories has been going through a bad patch. Activist investor Carl Icahn, Forest's second largest shareholder with a 9.92 percent stake, has been demanding changes at the company for a long time. In late August, the company adopted a stockholder rights plan.

FRX is falling over 3 percent in early morning trade at $35.50.

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by RTT Staff Writer

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