Forest Laboratories, Inc. (NYSE:FRX), an international pharmaceutical manufacturer and marketer, today announced that reported diluted earnings per share equaled $0.26 in the second quarter of fiscal 2014. Reported diluted earnings per share in the second quarter of fiscal 2013 were $0.08. Excluding acquisition related amortization and specified items, non-GAAP EPS in the second fiscal quarter of 2014 equaled $0.36 compared with $0.15 per share in the second quarter of fiscal 2013.
Chief Executive Officer and President
"There is rejuvenation underway at Forest as we return to growth. We have a motivated and talented workforce, we are launching new products and we are developing new drugs to drive future growth. This quarter sales increased 17% and non-GAAP earnings per share more than doubled," said Brent Saunders, CEO & President. "To make Forest more relevant to all of our key stakeholders - customers & patients; owners; partners and colleagues - we are conducting a thorough review of our business operations and evaluating changes to our strategy."
Product Sales Performance
Net sales for the quarter increased 17.3% to $811.4 million, from $692.0 million in the prior year quarter. The increase in sales was driven by sales of the Company’s next generation products which totaled $303.0 million, an increase of 49.9% compared with the second quarter of fiscal 2013. Namenda franchise sales increased $40.3 million or 11.0% compared with the second quarter of fiscal 2013.
Central Nervous System Franchise
- Namenda® (memantine HCl), an NMDA receptor antagonist for the treatment of moderate to severe Alzheimer’s disease, recorded sales of $396.3 million during the quarter, an increase of 7.8% from last year’s second quarter. Namenda XR™ (once-daily memantine HCl), recorded sales of $11.5 million during the quarter. Namenda XR was launched in June 2013 and recorded sales of $14.0 million during the fiscal 2014 first quarter. Pursuant to the requirements of a Pediatric Written Request from the FDA, the Company has conducted clinical studies to evaluate the safety and effectiveness of memantine in the treatment of autism.
- 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 $47.4 million during the quarter, an increase of 18.9% from last year’s second quarter.
- 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 $24.5 million for the quarter, an increase of 25.4% from last year’s second quarter.
- Tudorza® (aclidinium bromide inhalation powder), an anticholinergic indicated for the long-term maintenance treatment of bronchospasm associated with COPD, recorded sales of $16.7 million during the quarter. Tudorza was launched in December 2012 and recorded sales of $15.9 million during the fiscal 2014 first quarter.
(nebivolol), a beta-blocker for the treatment of hypertension, recorded sales of $130.0 million, an increase of 22.1% 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 $34.4 million during the quarter. Linzess was launched in December 2012 and recorded sales of $28.8 million during the fiscal 2014 first quarter.
(milnacipran HCl), a selective serotonin norepinephrine dual reuptake inhibitor for the management of fibromyalgia, recorded sales of $23.5 million, a decrease of 10.4% from last year’s second 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 $14.9 million, an increase of 48.9% over last year’s second quarter.
was $36.0 million in the current quarter compared to $54.3 million in the prior year second quarter. Benicar® (olmesartan medoxomil) co-promotion income totaled $35.0 million, an increase of $4.8 million, compared to $30.2 million in last year’s second 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 second quarter also included $22.7 million in royalties from Mylan, Inc. on its sales of generic Lexapro.
Cost of Sales
as a percentage of sales was 20.2% compared with 21.6% in last year’s second quarter.
Selling, General and Administrative
expense for the current quarter was $408.6 million as compared to $374.9 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.
Research and Development
for the current quarter was $191.4 million compared with $202.8 million in last year’s second quarter. The current quarter included $10.0 million in development milestone expenses. There were no development milestone payments in the prior year quarter.
Income Tax Expense
for the quarter was $21.6 million, reflecting a quarterly effective tax rate of 23.6%.
Reported Net Income
for the quarter ended September 30, 2013 was $70.0 million or $0.26 per diluted share compared to $20.8 million or $0.08 per diluted share reported for last year’s second quarter.
Diluted Weighted Average Shares Outstanding
at September 30, 2013 were approximately 270,825,000.
Six Month Results
Revenues for the six months ended September 30, 2013 increased 6.7% to $1,688.2 million compared to $1,581.8 million in the prior year.