Forest Labs swings back to profit in fiscal 1st-qtr

Forest Laboratories recovered from acquisition-related charges and returned to profitability in the first three months of the year. The US drugmaker's fully-diluted earnings per share for the fourth quarter of fiscal year 2008 were $0.55 per share, despite a $0.35 per share charge, net of tax, that it paid for development rights to the novel antibiotic NXL-104. The year-ago period saw a loss per share of $0.75 and included a one-time in-process R&D charge of $476.0 million for the takeover of Californian biotechnology firm Cerexa (Marketletter December 6, 2006).

Revenues for the quarter increased 12% to $990.8 million and comprised of net income of $898.7 million, up 10%. Sales of Lexapro (escitalopram), in-licensed from Denmark's H Lundbeck, indicated for the initial and maintenance treatment of major depressive disorder and generalized anxiety disorder in adults, increased 9% to $577.2 million. Revenues from the Alzheimer's disease drug Namenda (memantine) totaled $226.3 million, an increase of 26%.

During the period, the New York-headquartered firm's R&D spending reached $255.1 million due to the $110.1 million upfront fee it paid as part of an accord with Novexel (Marketletter January 28). The focus of the deal is a candidate product that will combine Forest's antibiotic ceftaroline with the French firm's beta lactamase inhibitor NXL104, to produce an agent effective against bacteria such as methicillin-resistant Staphylococcus aureus.