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Forest Laboratories Inc. Management Discusses F2Q2011 Results - Earnings Call Transcript

Forest Laboratories Inc. Management Discusses F2Q2011 Results - Earnings Call Transcript

Forest Laboratories Inc (

FRX

)

F2Q11 (Qtr End 9/30/10) Earnings Call

October 19, 2010 10:00 a.m. ET

Executives

Frank Murdolo - Investor Relations

Larry Olanoff - President & COO

Frank Perier - SVP, Finance & CFO

Analysts

John Boris - Citi Investment Research

Ian Sanderson - Cowen and Company

David Amsellem - Piper Jaffray

Louise Chen - Collins Stewart

Corey Davis - Jefferies

TheStreet Recommends

John Stevenson - KBC Securities

Marc Goodman - UBS

Gregg Gilbert - Bank of America/Merrill Lynch

Gary Nachman - Leerink Swann

Frank Pinkerton - SunTrust Robinson Humphrey

Irina Redken

Presentation

Operator

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Good morning

my name is Bobby Joe and I will be your conference operator today. At this time I would like to welcome everyone to the Forest Laboratories Second Quarter Fiscal 2011 Earnings Conference Call. (Operator Instructions).

Now I will turn the call over to your host today Mr. Murdolo with Investor Relations. Sir, you may begin.

Frank Murdolo

Thank you Bobby Joe and good morning everyone, this is Frank Murdolo. Thank you for joining us today for this second quarter of fiscal 2011 conference call. Joining me today is Larry Olanoff our President and COO and Frank Perier our Senior Vice President of Finance and Chief Financial Officer.

By now, each of you should have seen the earnings release that we issued around 8 A.M this morning. The release is also available at our website, www.frx.com.

By way of Safe Harbor Statement, let me add that the various remarks that we may make about future expectations, plans, prospects for the company that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and actual results may vary.

Let me now turn the call over to Larry, who will comment on the business during the quarter.

Larry

Olanoff

Good morning everyone. I will start today's call by reviewing key company events for the quarter and turn the call over to Frank Perier who will review the financial details of the quarter. Our underlying business continues to perform very well during the quarter for our key marketed products. Lexapro sales were essentially unchanged from last year despite the expected modest decease in market share and we saw a continued solid prescription growth for Namenda, Bystolic and for our newest products Savella.

We had a very busy quarter including a positive recommendation for the approval of Ceftaroline from the FDA Anti-Infective Drugs Advisory Committee. We look forward to hearing from the FDA on the action date for Ceftaroline at the end of this month.

As planned during the quarter we responded to the FDA's complete response letter for taxes which was issued by the agency in May. We expect the response from the agency in the first quarter of calendar year 2011. During the quarter, we and our partner Ironwood Pharmaceuticals reported positive top line results from the first of two ongoing phase III clinical trials assessing the efficacy and safety of linaclotide for irritable bowel syndrome with constipation or IBS-C. Later this quarter we expect to receive the results from the second Phase III clinical trial for linaclotide and IBS-D.

Regarding our inline products, Lexapro sales in the quarter totaled $569.3 million, essentially unchanged from the year ago period. The continued general market growth is helping to maintain Lexapro revenues in the current market. Sales of Namenda were $310.1 million; growth of 12.7% year-over-year, a combination used with acetylcholinesterase inhibitor remains the most widely applied dosage regimen and accounts for about 60% of total Namenda use.

Bystolic had sales in the quarter of $63.7 million, compared to sales of $40.7 million in the year ago period. Bystolic sales continue to perform strongly and we continue to see an encouraging mix of patients including significant proportions of those switching from generic beta-blockers and those new to beta-blocker therapy. Our approach to physicians has been to emphasize the use of Bystolic as the first add on agent to standardize first line agents and this message appears to be increasingly well received and represents a significant change in the beta-blocker treatment regimen for many hypertensive patients.

Bystolic has a growing base of approximately 164,000 prescribers with approximately 90% of these being repeat writers. Both primary care physicians and cardiologists are prescribing the product. While share amongst cardiologists continues to exceed that of the national share for Bystolic, recent monthly prescription trends show that primary care providers are now generating higher prescription volume in cardiologists.

Since the launch in [9-10-2008] approximately 986,000 patients have filed or filled a Bystolic prescription. Younger patients comprised a higher percentage of Bystolic patients than for other beta-blockers and other antihypertensive agents in general. 54% of Bystolic patients are in fact younger than age 65, compared to 43% for other beta-blockers and 46% for the general antihypertensive market.

Overall in the managed care front, our access without any step at it or prior authorization restrictions covers over 85% of total beta-blocker lives. Bystolic has unrestricted tier 2 coverage on major national health plans and is the preferred brand at many of the major national plants.

Within the past two months Bystolic has become available unrestricted as tier 2 preferred brand co-pay product on the Medco National Prescriptions commercial formulary and the Express Scripts National Preferred commercial formulary.

We launched Savella in April 2009 and sales in the current quarter were $21.4 million, as compared to sales of $10.2 million in the year ago period. Our broad based early experience sampling program and general promotional activities have succeeded in driving patient and physician experience with Savella and we continue to be encouraged by the solid uptake and the positive response to Savella's profile and performance with both specialist and general practitioners.

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