Forest Labs 2Q profit slides on drug costs

Forest Labs profit skids 24 pct. after purchase of lung drug and settling Lexapro proceedings

• On 9:59 am EDT, Tuesday October 20, 2009

NEW YORK (AP) -- Forest Laboratories Inc. on Tuesday said its fiscal second-quarter profit fell 24 percent after it paid $100 million for the rights to market a chronic lung drug candidate.

In the quarter ended Sept. 30, the New York drugmaker's profit decreased to $186.7 million, or 61 cents per share, from $244.1 million, or 80 cents per share, in the same period a year earlier.

Forest said it earned 85 cents per share in the latest quarter excluding one-time gains and expenses.

Analysts polled by Thomson Reuters expected a profit of 86 cents per share.

Forest paid Nycomed $100 million for the rights to market Daxas in the U.S. It also paid $20 million, or 4 cents per share, to settle legal proceedings related to its antidepressant Lexapro. It received a licensing payment of $40 million, or 13 cents per share, from AstraZeneca PLC, which will collaborate with Forest on the Staph infection drug candidate ceftaroline.

Revenue grew 7 percent to $1.06 billion from $992.5 million. Forest said sales of Lexapro fell 3 percent to $566 million, but revenue from its Alzheimer's disease drug Namenda rose 12 percent to $275.3 million. Sales of the high blood pressure drug Bystolic, which was newly on the market a year ago, nearly tripled to $40.3 million. Forest reported $10.2 million in sales of Savella, a fibromyalgia drug that reached the market in April.

On average, analysts expected total revenue of $1.02 billion.

Forest's research and development spending climbed to $263.1 million from $146.4 million, mostly due to the payment to Nycomed.

Due to pre-launch costs for Daxas and other spending, the company trimmed its annual profit forecast.

Shares of Forest Labs fell 33 cents to $29.92 in morning trading.

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