NEW YORK, Oct. 16 /PRNewswire-FirstCall/ -- Forest Laboratories, Inc.
(NYSE: FRX), an international pharmaceutical manufacturer and marketer,
today announced that fully diluted reported earnings per share equaled
$0.71 in the second quarter of fiscal 2008, a decrease of 5% over last
year's second quarter's fully diluted reported earnings per share of $0.75.
Reported earnings per share were reduced by the effect of a $70 million
licensing charge, equivalent to $0.15 per share net of tax, to Microbia,
Inc. for the right to co-develop and co-market linaclotide, a compound
being investigated for chronic constipation and constipation predominant
irritable bowel syndrome.
(Logo: http://www.newscom.com/cgi-bin/prnh/20001011/FORESTLOGO )
Revenues for the quarter increased 8.5% to $918,960,000 from
$846,975,000 in the year-ago period.
Revenues were comprised of net sales, which increased 8.2% to
$842,337,000 from $778,676,000 in the prior year. Sales in the quarter
included $559,063,000 for Lexapro(R) (escitalopram oxalate), our SSRI for
the treatment of depression and anxiety in adults, an increase of 7% from
the year-ago period. Namenda(R), our NMDA receptor antagonist for the
treatment of moderate and severe Alzheimer's disease, recorded sales of
$192,872,000 during the quarter, growth of 24% from last year. Product
wholesalers collectively held less inventory of both Lexapro and Namenda at
the end of the September quarter which negatively impacted combined sales
of these products by approximately $18,000,000. Wholesaler inventory levels
for both products are currently at approximately two weeks of sales. Also
included in net revenues was other income of $76,623,000 which includes a
2.6% increase to $49,572,000 in earnings contribution from the Benicar(R)*
(olmesartan medoxomil) co- promotion agreement. The remaining component of
other income was principally interest income.
Net income in the current quarter decreased 7% to $225,244,000 from
$241,111,000 reported in the second quarter of the prior year. Selling,
general and administrative expenses increased 8% to $280,439,000. Research
and development expenses increased 82% to $170,738,000 during the quarter
which included the $70,000,000 licensing charge made in connection with the
Microbia agreement.
Fully diluted shares outstanding at September 30, 2007 were 316,852,000
a reduction of 5.7 million shares compared to the year-ago period due
mainly to the Company's ongoing share repurchase program. During the
just-completed quarter, the Company repurchased approximately 4.95 million
shares leaving an additional 17.9 million shares available for repurchase
under the existing program, which has no expiration date.
Six Month Results
Revenues for the six months ended September 30, 2007 increased 11.1% to
$1,847,234,000 from $1,663,313,000 in the prior year.
Net income for the six months ended September 30, 2007 increased 12% to
$493,406,000 from net income of $441,718,000 reported in the six months of
the prior year. Reported diluted earnings per share increased 13% to $1.54
in the current year's first six months as compared to diluted earnings per
share of $1.36 in last year's six months.
Fiscal 2008 Guidance
The Company now projects that earnings per share for the fiscal year
ending March 31, 2008 will be in a range of $3.10 to $3.20 as compared to
prior guidance of a range of $3.05 to $3.15. This guidance excludes the $70
million, equal to $0.15 per share net of tax, licensing charge made in
connection with the Microbia agreement, as it was not included in the prior
guidance. Research and development spending is expected to be approximately
$530 million excluding the $70 million licensing charge.
Howard Solomon, Chairman and Chief Executive Officer of Forest,
commented: "During the quarter we concluded arrangements with our
co-partner Daiichi Sankyo for the launch of Azor(TM), which is occurring
this month. In addition, we expect nebivolol to be approved this quarter
with a launch scheduled for the fiscal fourth quarter. Both products, with
income benefits extending beyond 2012, should soon begin to contribute to
earnings. We also expect to file the new drug application for milnacipran
this quarter. In addition to the new product launches our core product
sales continue to grow and our development pipeline has also advanced. In
addition to the results we just announced for RGH-188 for schizophrenia, we
expect to see clinical data on five additional later stage studies during
the coming year.
During the quarter we announced a collaboration with Microbia for the
co- development and co-marketing of linaclotide, for chronic constipation
and constipation predominant irritable bowel syndrome. We believe this is a
promising novel compound that may offer a much needed therapy for this very
large and underserved market. Linaclotide, which has already concluded
small Phase II studies, is presently being studied in larger Phase II
studies with results expected during the first half of 2008."
Forest will host a conference call at 10:00 AM EDT today to discuss the
results. The conference call will be webcast live beginning at 10:00 AM EDT
on the Company's website at http://www.frx.com and also on the website
http://www.streetevents.com. Please log on to either website at least fifteen
minutes prior to the conference call as it may be necessary to download
software to access the call. A replay of the conference call will be
available until October 31, 2007 at both websites and also by dialing
1-800- 642-1687 (US investors) or +1-706-645-9291 (international investors)
passcode 19769552.
About Forest Laboratories and Its Products
Forest Laboratories (http://www.frx.com) is a US-based pharmaceutical company
dedicated to identifying, developing, and delivering products that make a
positive difference in peoples' lives. Forest Laboratories' growing product
line includes Lexapro(R) (escitalopram oxalate), an SSRI indicated for
adults for the initial and maintenance treatment of major depressive
disorder and for generalized anxiety disorder; Namenda(R) (memantine HCl),
an N-methyl-D- aspartate (NMDA)-receptor antagonist indicated for the
treatment of moderate to severe Alzheimer's disease; Benicar(R)*
(olmesartan medoxomil), an angiotensin receptor blocker, and Benicar*
HCT(R) (olmesartan medoxomil- hydrochlorothiazide), an angiotensin receptor
blocker and diuretic combination product, each indicated for the treatment
of hypertension; and Campral(R)* (acamprosate calcium), indicated in
combination with psychosocial support for the maintenance of abstinence
from alcohol in patients with alcohol dependence who are abstinent at
treatment initiation.
*Benicar is a registered trademark of Daiichi Sankyo, and Campral is a
registered trademark of Merck Sante s.a.s., subsidiary of Merck KGaA,
Darmstadt, Germany.
Except for the historical information contained herein, this release
contains "forward-looking statements" within the meaning of the Private
Securities Reform Act of 1995. These statements involve a number of risks
and uncertainties, including the difficulty of predicting FDA approvals,
acceptance and demand for new pharmaceutical products, the impact of
competitive products and pricing, the timely development and launch of new
products and the risk factors listed from time to time in the Company's SEC
reports, including the Company's Annual Report on Form 10-K for the fiscal
year ended March 31, 2007 and on Form 10-Q for the period ended June 30,
2007.
FOREST LABORATORIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
THREE MONTHS SIX MONTHS
ENDED SEPTEMBER 30 ENDED SEPTEMBER 30
(In thousands, except per share amounts)
2007 2006 2007 2006
Revenues:
Net sales $842,337 $778,676 $1,684,953 $1,537,444
Contract revenue 50,313 48,909 103,690 91,571
Interest income 24,932 19,100 51,670 33,753
Other income 1,378 290 6,921 545
Net revenues 918,960 846,975 1,847,234 1,663,313
Costs and expenses:
Cost of goods sold 189,992 185,098 376,232 360,783
Selling, general and
administrative 280,439 259,008 541,767 503,391
Research and
development 170,738 93,752 307,646 232,834
641,169 537,858 1,225,645 1,097,008
Income before income
tax expense 277,791 309,117 621,589 566,305
Income tax expense 52,547 68,006 128,183 124,587
Net income $225,244 $241,111 $493,406 $441,718
Net income per share:
Basic $0.71 $0.76 $1.55 $1.38
Diluted $0.71 $0.75 $1.54 $1.36
Weighted average number
of shares outstanding:
Basic 315,510 317,809 317,534 319,623
Diluted 316,852 322,581 319,375 324,256
SOURCE Forest Laboratories, Inc.
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Related links:
http://www.frx.com
Photo Notes:
NewsCom: http://www.newscom.com/cgi-bin/prnh/20001011/FORESTLOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
CONTACT:
Charles E. Triano, Vice President, Investor
Relations, of Forest Laboratories, Inc., +1-212-224-6714 or
charles.triano@frx.com
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