NEW YORK (AP) -- Forest Laboratories Inc. slashed its fiscal-year profit outlook Monday, pointing to stiff generic competition for its blockbuster antidepressant Lexapro.
Forest expects lower sales of brand-name Lexapro, and said the authorized generic version made by Mylan Inc. is being sold for much larger discounts than it originally expected. The New York drugmaker now expects to report a profit of 65 to 80 cents per share for the fiscal year ending in March, down from its previous estimate of 95 cents to $1.10 per share.
Analysts expected Forest to report a profit of 99 cents per share, according to FactSet.
Forest has reported more than $1 billion in annual sales of Lexapro in recent years, but the drug lost patent protection earlier this year. Mylan started selling an authorized generic version Feb. 29 and other drugmakers launched their own versions once the patents expired in mid-March. Forest gets some of the revenue from sales of Mylan's authorized generic.
Forest said it now expects to get $60 million in revenue from that agreement, down from a forecast of $115 million. It said Mylan has had to sell its generic at a discount of 60 to 65 percent compared to the brand-name version. Forest expected the authorized generic to sell for about 30 percent less than Lexapro. Generic versions of Lexapro sold by other generics companies have also taken a slightly larger share of the market than it expected.
Forest said it now expects $215 million in revenue from brand-name Lexapro, below its earlier estimate of $250 million. Generic competition was also responsible for that change.
The company also said it has stopped selling the thyroid drug Levothroid because of manufacturing problems. Forest does not make the drug, but sells it on behalf of another company. Forest said the Food and Drug Administration is concerned about manufacturing and quality control at the facility where the product is made, and the manufacturer has stopped making and shipping the drug until those problems are addressed.
Forest said it is not sure how long Levothroid will be unavailable. It said it gets about $17 million in annual revenue from Levothroid, and it could lose 3 cents per share in profit if it can't sell Levothroid for the rest of the fiscal year.
Shares of Forest Laboratories fell 93 cents, or 2.6 percent, to $34.76 in morning trading.