A better-than-expected first quarter and a continuing stock buyback program have given
the confidence to raise its guidance for the fiscal year that ends next March.
The New York-based drugmaker said Tuesday it was boosting its earnings forecast to a range of $2.42 to $2.50 a share from its prior estimate of $2.37 to $2.42.
In early-afternoon trading, however, the stock was off 57 cents, or 1.3%, to $43.38 on higher-than-average trading volume.
The announcement came during Forest's release of its first-quarter results, in which revenue of $816.3 million topped the $716.8 million for the same period last year. Forest earned $200.6 million, or 62 cents a share, vs. a profit of $216.6 million, or 62 cents a share, for the year-ago period.
One-time items affected both periods. The just-completed quarter includes a $60 million licensing charge and an $8.8 million stock-option expense. The first quarter last year had a $36.4 million tax gain.
The first quarter was paced by the antidepressant Lexapro, which produced sales of $507 million, or 62% of Forest's revenue. Last week, a federal court judge
ruled in favor of Forest, agreeing that
Teva Pharmaceutical Industries
had infringed on Lexapro's key patent.
Forest's other big drug, Namenda, posted first-quarter sales of $151 million, up 32% from the year-ago period. Namenda is prescribed for moderate and severe Alzheimer's disease.
Forest, which specializes in licensing drugs from other companies, offered an update for several products in the pipeline, including the blood-pressure drug nebivolol. Licensed from
in January, nebivolol is still undergoing some additional testing required by the Food and Drug Administraion.
Kenneth Goodman, Forest's president and chief operating officer, told analysts during a conference call that the studies should be completed by year-end and that the drug could be launched by mid-2007.
Responding to analysts' questions, Goodman said Forest still expects to seek FDA approval for the drug as a treatment for congestive heart failure. The question is whether the FDA will accept that particular application based on one clinical trial or instead ask for more tests. Goodman said he can't answer that question until the FDA comments.
Many analysts have said that nebivolol's success depends on getting the additional approval, because nebivolol belongs to a class of drugs, called beta-blockers, that's overflowing with blood-pressure treatments.
Goodman said Forest's strategy was based on getting FDA approval for treating high blood pressure, adding that nebivolol's differences are "substantial enough" to distinguish it from other beta-blockers. A Forest spokesman said 95% of beta-blocker prescriptions are written for blood pressure, while only 5% are for congestive heart failure.
He expects to hear from the FDA in October about Forest's application for the antibiotic Orapem, a product it licensed in February from
. Regulators will have to approve the drug for at least two indications to make Orapem successful, Goodman said.
Forest is seeking FDA approval for acute bacterial sinusitis, community-acquired pneumonia, acute exacerbation of chronic bronchitis and uncomplicated skin and skin-structure infections in adults. A best-case scenario would be a late-summer 2007 launch, Goodman said.