Forest Isn't Out of the Woods

David Windley of Jefferies calls the quarterly results "partly sunny," with Lexapro falling below his forecast and Namenda rising above his prediction. Namenda, for moderate to severe Alzheimer's disease, is Forest's second-biggest seller. Fourth-quarter sales rose 55% to $93.9 million.

Windley has a hold rating on Forest. He owns shares, but his firm doesn't have an investment-banking relationship.

For the fiscal year ending next March, Forest projected revenue of just below $3.3 billion, which is in line with the consensus among analysts polled by Thomson First Call. The company expects earnings of $2.74 to $2.79 a share, excluding product-licensing payments and stock-options expensing. On a GAAP basis, the EPS range is $2.37 to $2.42. Because different analysts use different methods of calculating Forest's earnings per share, making a general comparison is difficult.

Forest also said the Food and Drug Administration is requiring additional tests to support the company's application for nebivolol, a blood-pressure medication licensed from Mylan Laboratories (MYL).

Kenneth Goodman, the president and chief operating officer, said the tests would take three to six months, pushing back the expected approval date. The company had believed the drug would be cleared by the end of the 2007 fiscal year. Forest plans to seek FDA approval for nebivolol as a treatment for congestive heart failure.

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