Profits Warning From Forest Labs

Forest Laboratories of the USA has said that it expects sales and earnings for the second fiscal quarter ending September 30 to be reduced to a greater extent than originally anticipated due principally to the continued deterioration of pricing and market share of its Inwood generics subsidiary, and loss of sales of its analgesic Lorcet 10/650 (dextropropoxyphene and paracetamol) as a result of generic substitution.

Howard Solomon, president of Forest, said: "Lorcet 10/650, which is now subject to generic substitution, has had a rapid rise in the substitution rate to almost 70% after nine months. The branded inventory in the trade remains excessive relative to the level of branded sales and we are therefore receiving very few new orders. Accordingly, Lorcet sales this year will be significantly below our original expectations."

For the first fiscal quarter ended June 30, Forest Labs reported net sales of $90.3 million, down 15.5%. Net income decreased 18% to $21.9 million. Net income per share was 47 cents, compared with 57 cents a year earlier.