Forest posts third-quarter loss as Lexapro sales plunge

Forest Laboratories posted a loss of $153.6 million for the third quarter, down from a profit of $278.4 million in the year-ago period, as sales of Lexapro were hit by generic competition, the company reported Tuesday. Revenue from the antidepressant reached $20.3 million in the three-month period, compared with $593 million in the same quarter of 2012, following the approval of generic versions in the US.

CEO Howard Solomon noted that "as expected, we incurred a loss resulting principally from sales lost following the expiration of Lexapro’s patent exclusivity," adding that the quarter "had lower sales of branded and generic Lexapro than the prior two quarters." The company's overall sales in the third quarter dropped 41.6 percent to $678 million, missing analyst estimates of around $762 million.

For other products, revenue from Namenda rose 1.6 percent to $345.8 million, with sales of Bystolic jumping 20.1 percent over the year-ago period to $108.8 million. Solomon said that "more importantly, in the month of December 2012, we launched two major new products, Tudorza and Linzess." The CEO suggested that these products, along with the seven others already launched and two filed with the FDA, levomilnacipran for major depressive disorder and cariprazine for schizophrenia and bipolar disorder, are expected to "equal and exceed the sales lost" from Lexapro and the future loss of exclusivity on Namenda.

For the full year, Forest indicated that it now expects earnings to be at the lower end of its previously announced range of $0.45 to $0.60 per share, with total sales between $3.1 billion and $3.2 billion, revised from an earlier estimate of $3.2 billion. Analysts predict annual earnings of $0.25 per share on revenue of just under $3.2 billion.

"The bottom-line is that we view these near-term numbers as not overly meaningful as the focus remains on management’s ability to launch Tudorza and Linzess," remarked Cowen & Co. analyst Steve Scala.

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