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Forest Labs Seeks Bystolic-Diovan Approval

Zacks Equity Research

Forest Laboratories, Inc. (FRX) has submitted a regulatory application for its fixed dose combination of Bystolic and Novartis’ (NVS) Diovan (valsartan) to the U.S. Food and Drug Administration (:FDA). Forest Labs is looking to get the combination approved for the treatment of hypertension.

The company submitted the New Drug Application (:NDA) on the basis of encouraging data from an 8-week randomized, double-blind, placebo-controlled phase III study (n = 4,161) which evaluated the efficacy and safety of different fixed combinations of Bystolic (5, 10, and 20 mg) and Diovan (80, 160, and 320 mg). The NDA also includes data from a 52-week, open-label safety/tolerability study.

Bystolic is a key product in Forest Labs’ portfolio. The product posted sales of $386.7 million in the nine months ended Dec 31, 2013, up 19.7% reflecting price increases and modest volume growth.

We are encouraged by Forest Labs’ efforts to extend the product’s lifecycle by bringing a fixed dose combination of Bystolic and Diovan to the market. A fixed dose combination product would expand the patient population for Bystolic.

Last month, Actavis, Inc. (ACT) announced its intention to acquire Forest Labs. The companies have signed a definitive agreement under which Actavis will acquire Forest Labs for a cash and equity transaction valued at about $25 billion. The deal is expected to close in mid-2014. Post-closure, Forest Labs’ shareholders will own 35% of the new company.

Forest Labs and Actavis both carry a Zacks Rank #2 (Buy). Other well-ranked stocks include Shire (SHPG) carrying a Zacks Rank #1 (Strong Buy).

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