Forest Laboratories, Inc. (NYSE: FRX), an international pharmaceutical manufacturer and marketer, today announced that reported diluted earnings per share equaled $0.09 in the first quarter of fiscal 2014. Reported diluted earnings per share in the first quarter of fiscal 2013 were $0.21. Excluding acquisition related amortization and specified items, non-GAAP EPS in the first fiscal quarter of 2014 and 2013 was $0.28 for both periods. First quarter 2014 earnings were higher than anticipated primarily due to timing of spending for research and development expenses.
Product Sales Performance
Net sales for the quarter increased 6.0% to $796.9 million, from $751.8 million in the prior year quarter. The increase in sales was driven by sales of the Company’s next generation products which totaled $294.1 million, an increase of 47.8% compared with the first quarter of fiscal 2013, partially offset by a decline in sales of Lexapro.
Central Nervous System Franchise
- Sales of Namenda® (memantine HCl), an NMDA receptor antagonist for the treatment of moderate to severe Alzheimer’s disease, recorded sales of $397.5 million during the quarter, an increase of 7.9% from last year’s first quarter. Namenda XR™ (once-daily memantine HCl), was launched in June 2013 and recorded initial trade stocking of $14.0 million during the quarter.
- Viibryd® (vilazodone HCl), a selective serotonin reuptake inhibitor (SSRI) and a partial agonist at serotonergic 5-HT 1A receptors for the treatment of adults with major depressive disorder, recorded sales of $46.1 million during the quarter, an increase of 23.4% from last year’s first quarter.
- Lexapro® (escitalopram oxalate), an SSRI for the initial and maintenance treatment of MDD in adults and adolescents and generalized anxiety disorder in adults were $28.2 million compared with $110.0 million in the year-ago period. The Lexapro patent expired on March 14, 2012.
- Daliresp® (roflumilast), a PDE4 enzyme inhibitor for the treatment to reduce the risk of exacerbations in patients with chronic obstructive pulmonary disease (COPD), recorded sales of $24.0 million for the quarter, an increase of 35.2% from last year’s first quarter.
- Tudorza® (aclidinium bromide inhalation powder), an anticholinergic indicated for the long-term maintenance treatment of bronchospasm associated with COPD, recorded sales of $15.9 million during the quarter. Tudorza was launched in December 2012 and recorded initial trade stocking of $12.2 million in the fiscal 2013 third quarter and sales of $10.8 million during the fiscal 2013 fourth quarter.
(nebivolol), a beta-blocker for the treatment of hypertension, recorded sales of $126.0 million, an increase of 16.8% over the year-ago period.
(linaclotide), a guanylate cyclase agonist for the treatment of both irritable bowel syndrome with constipation and chronic idiopathic constipation in adults, recorded sales of $28.8 million during the quarter. Linzess was launched in December 2012 and recorded initial trade stocking of $19.2 million in the fiscal 2013 third quarter and sales of $4.5 million during the fiscal 2013 fourth quarter.
(milnacipran HCl), a selective serotonin norepinephrine dual reuptake inhibitor for the management of fibromyalgia, recorded sales of $25.0 million, a decrease of 6.0% from last year’s first quarter.
(ceftaroline fosamil), a broad-spectrum bactericidal cephalosporin antibiotic for the treatment of adults with community-acquired bacterial pneumonia and with acute bacterial skin and skin structure infections, recorded sales of $14.2 million, an increase of 51.8% over last year’s first quarter.
was $31.9 million in the current quarter compared to $65.8 million in the prior year first quarter. Benicar® (olmesartan medoxomil) co-promotion income totaled $28.1 million, a decrease of $7.3 million, compared to $35.4 million in last year’s first quarter. Per the agreement with Daichi Sankyo, Forest’s active co-promotion of Benicar ended in the first quarter of fiscal 2009 and the Company receives a residual royalty until the end of March 2014. Last year’s first quarter also included $29.4 million in royalties from Mylan, Inc. on its sales of generic Lexapro.
Cost of Sales
as a percentage of sales was 20.8% compared with 22.4% in last year’s first quarter.
Selling, General and Administrative
expense for the current quarter was $443.9 million as compared to $382.3 million in the year-ago quarter. The current level of spending reflects the resources and activities required to support our currently marketed products, particularly our newest products: Namenda XR, Linzess, Tudorza, Viibryd, Daliresp and Teflaro. Spending for the quarter also included a one-time charge of $26.2 million for the write-off of a loan to Nabriva Therapeutics related to a business development agreement for Nabriva’s novel antibiotic BC-3781. The Company had the exclusive right to acquire Nabriva and did not exercise its right based on development and commercial considerations.
Research and Development
for the current quarter was $185.4 million compared with $195.2 million in last year’s first quarter. The current quarter included $18.0 million in development milestone expenses. There were no development milestone payments in the prior year quarter.
Income Tax Expense
for the quarter was $15.0 million, reflecting a quarterly effective tax rate of 39.2%.
Reported Net Income
for the quarter ended June 30, 2013 was $23.3 million or $0.09 per diluted share compared to $55.3 million or $0.21 per diluted share reported for last year’s first quarter.
Diluted Weighted Average Shares Outstanding
at June 30, 2013 were approximately 268,420,000.
Chairman and Chief Executive Officer
Howard Solomon, Chairman and Chief Executive Officer of Forest, said: “We are very pleased with the financial results for the quarter and particularly with the significant percentage increases in the sales of almost all of our new products and with the initial response to Linzess and Tudorza which were both launched this past December. Collectively, our next generation products had sales of $294.1 million in the quarter, representing 47.8% growth in comparison to the comparable prior year quarter.
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