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Forest Laboratories earnings rise

Forest Laboratories has reported a major increase in fiscal Q4 profit compared to the same period last year
Forest Laboratories has reported a major increase in fiscal fourth-quarter profit compared to the same period last year, due in large part to the fact that first-quarter earnings last year were affected by a substantial licensing payment that the company made to AstraZeneca and other costs.

For the quarter ended March 31, Forest's profits came in at $322.5m, or $1.12 per share, up from $22.6m or 7 cents per share last year, when results included a payment that cut the company's profit by 76 cents per share. Analysts had predicted that earnings for the most recent quarter would be $1.06 per share.

Revenue in the most recent quarter was up 8 per cent to $1.14bn, beating the consensus analyst estimate of $1.11bn.

For the full fiscal year, profit was up 53 per cent to $1.05bn, or $3.59 per share, compared to $682.4m, or $2.25 per share, in the previous year. Revenue was up five per cent to $4.42bn for the full year. Last year's results were negatively affected by large licensing payments and a charge to resolve allegations of illegal marketing. 

Frank Murdolo, VP-investor relations, said during a conference call that Forest expects new products to more than offset the loss of revenue that the company will experience when its antidepressant Lexapro (escitalopram) and its Alzheimer's drug Namenda (memantine) lose their patent protection in the coming years. 

The company has five new drugs that it is actively marketing, two New Drug Applications (NDAs) filed with the US Food and Drug Administration (FDA), and two more NDAs that it is hoping to file next year, according to Murdolo. 

"We believe that these products could collectively present several billion dollars of potential product sales in the long term, sufficient over time, to replace the revenues lost due to the patent expiration for both Lexapro in 2012 and Namenda in 2015 and provide growth," he said.

Murdolo noted that significant investment will be made during the coming year for the launches of the chronic obstructive pulmonary disease (COPD) drug Daliresp (roflumilast) and the antidepressant Viibryd (vilozodone). 

"Viibryd accelerates the need to increase our field selling support, so we are currently adding the equivalent of about half the size of a full primary care sales force, and we will evaluate the need to increase that later next year," he said.

20th April 2011

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