Monday, January 17, 2011

Forest Laboratories Inc. (NYSE: FRX): Q3 Earnings Preview

Forest Laboratories Inc. (NYSE: FRX) is scheduled to release fiscal third-quarter earnings before the opening bell on Tuesday, January 18, 2011. Analysts, on average, expect the company to report earnings of 99 cents per share on revenue of $1.10 billion. In the year-ago period, the company reported earnings of 97 cents per share on revenue of $1.06 billion.

Forest Laboratories, Inc. develops, manufactures, and sells branded and generic forms of ethical drug products. The Company’s United States products are marketed directly, or detailed, to physicians by its salesforces. Its principal products include Lexapro to treat depression; Namenda to treat Alzheimer's disease; Bystolic, beta-blocker to treat hypertension; and Savella for the treatment of fibromyalgia.

In the preceding fiscal second-quarter, the New York-based company's net income was $286.11 million or $1.00 per share, up from last year's $186.66 million or $0.61 per share that included certain charges of $0.24 per share. Excluding the charges, prior year's earnings were $0.85 per share. Revenue increased to $1.09 billion from $1.06 billion a year ago. Analysts, on average, expected the company to report earnings of $0.93 per share on revenue of $1.07 billion.

At its last earnings call in October, the company boosted its fiscal 2011 earnings outlook. Forest Labs said that it now expects that earnings per share for the fiscal year 2011 will be in the range of $3.80 to $3.90. The forecast excludes the charges in the June quarter related to the settlement with the US Department of Justice and the upfront licensing payment to TransTech Pharma, while it includes the impact of the accelerated share repurchase, or ASR transaction. Previously, for the fiscal year 2011, the company expected earnings per share in the range of $3.67 to $3.77, excluding certain charges of $0.56 per share, and including the impact of the ASR transaction.

Forest Laboratories is trying hard to come up with new drugs that can help replace lost revenue when its antidepressant drug Lexapro goes off patent in March 2012.  The drug generated $2.3 billion in revenue last year. Similarly, the company's Alzheimer's drug Namenda faces patent expiration in April 2015. According to IMS Health, Namenda had U.S. sales of $1.2 billion for the twelve months ended March 31, 2010.

Late in October, the company said that U.S. Food and Drug Administration approved Teflaro for the treatment of community-acquired bacterial pneumonia. Forest expects Teflaro to be available to wholesalers by January 2011. Early in November, Forest Laboratories and Ironwood Pharmaceuticals, Inc. (NASDAQ: IRWD) reported positive top-line results from a late-stage clinical trial assessing the efficacy and safety of investigational drug linaclotide in patients with irritable bowel syndrome with constipation. The companies expect to submit an NDA with the FDA for both the IBS-C and CC indications in the third quarter of calendar year 2011. Last month, Forest Laboratories Ireland Limited, a wholly owned subsidiary of Forest Laboratories, Inc. and Gruenenthal entered into a license agreement for the co-development and commercialization of a novel oral small molecule analgesic, GRT 6005, and its follow-on compound GRT 6006. Both compounds were discovered and developed by Gruenenthal and represent novel first in class molecules with unique pharmacological and pharmacokinetic profiles that may enhance their effect in certain pain conditions. Early in January, Forest Laboratories and Almirall S.A. said that their lung disease drug aclidinium met its primary endpoints in a late stage clinical trial. Regulatory submissions in Europe and the US for aclidinium bromide monotherapy are both planned for mid 2011. Forest Laboratories has licensed US rights for aclidinium from Almirall, while Almirall maintains rights for the rest of the world. The companies are jointly involved in the development of the compound.

Among other developments, Forest Laboratories entered into a definitive collaboration and distribution agreement for Bystolic and Savella in Canada with Janssen Pharmaceutica NV and Janssen pharmaceutical respectively, on behalf of Janssen Inc., which will market the products in Canada.

In terms of stock performance, Forest Labs shares have lost nearly 3 percent over the past year.

Full Disclosure: None.
Related Posts with Thumbnails

Wikinvest Wire