Drug maker Forest Laboratories, Inc. (FRX: Quote) on Tuesday reported a loss for the third quarter, hurt by the loss of patent protection for its anxiety disorder drug Lexapro. Following the announcement of the results, the company's shares are down 5 percent in pre-market trading.
Lexapro's sales plunged 97 percent from last year to $20.3 million, as its patent protection expired on March 14, 2012.
Sales of Namenda, for the treatment of moderate and severe Alzheimer's disease, increased 2 percent to $345.8 million. Namenda sales were negatively impacted by higher contract rebates, largely driven by the Medicare Part D Coverage Gap liability, which peak in the fiscal third quarter and are expected to return to normal levels in the fiscal fourth quarter.
Hypertension drug Bystolic's sales advanced 21 percent to $108.8 million. Sales of Savella, for the management of fibromyalgia, declined 3 percent to $25.6 million.
Howard Solomon, chairman and chief executive officer of Forest Laboratories said, "In the third quarter of fiscal 2013, as expected, we incurred a loss resulting principally from sales lost following the expiration of Lexapro's patent exclusivity in March 2012. The third quarter had lower sales of branded and generic Lexapro than the prior two quarters, as Lexapro declined in sales closer to its ultimately anticipated levels."
Forest Laboratories' third-quarter net loss was $153.61 million or $0.58 per share, compared to net income of $278.44 million or $1.04 per share in the year-ago period.
The latest quarter's results include upfront/licensing agreement payments totaling $76 million or $0.29 per share, net of tax.
Adjusted loss per share for the quarter were $0.21, compared to adjusted earnings per share of $1.08 in the prior-year period.
On average, eighteen analysts polled by Thomson Reuters expected the company to report loss of $0.14 per share for the quarter. Analysts' estimates typically exclude one-time items.
Net sales for the quarter decreased 42 percent to $677.97 million from $1.16 billion in the year-ago quarter. Net revenue declined 40 percent to $722.69 million from $1.21 billion last year and missed analysts' consensus estimate of $761.95 million.
For fiscal 2013, Forest Laboratories now forecasts adjusted earnings per share at the lower end of its prior guidance range of $0.45 to $0.60.
The company forecasts net revenue for the year, including product sales and the earnings contribution from Benicar, authorized generic sales of Lexapro, interest income and other income, to range between $3.1 billion and $3.2 billion. Earlier, the company projected full-year revenues of $3.2 billion.
Analysts expect the company to earn $0.25 per share for the year on revenues of $3.15 billion.
In the month of December, Forest Laboratories launched two new major products, Tudorza and Linzess.
The company expects the sales lost following the expiration of Lexapro's exclusivity to be more than offset by the sale of the two new products, seven products already launched, and the two products expected to be launched in the next fiscal year - levomilnacipran and cariprazine.
Forest Laboratories is currently engaged in a prolonged proxy fight with activist investor Carl Icahn, the company's second largest shareholder.
FRX closed Monday's trading at $37.59. In Tuesday's pre-market, the stock is down $2.11 or 5.61 percent to $35.49.
by RTT Staff Writer
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