NEW YORK (AP) – Drugmaker Forest Laboratories Inc.’s fiscal third-quarter earnings fell 13%, despite higher revenue, as expenses climbed.
The New York drugmaker raised its earnings guidance by five cents per share for the fiscal year that ends March 31, and shares rose 81 cents, or 2.6 percent, to $31.71 in mid-morning trading.
Forest said that it earned $278.4 million, or $1.04 per share, in the three months that ended Dec. 31. That compares with net income of $320.7 million, or $1.11 per share, in the same quarter of 2010.
Total revenue rose 8 percent to $1.21 billion.
Analysts surveyed by FactSet expected, on average, earnings of $1.01 per share on $1.18 billion in revenue.
Drug sales, the bulk of Forest’s revenue, rose 9 percent to $1.16 billion. Lexapro sales rose 1 percent to $593 million, while sales of the Alzheimer’s treatment Namenda rose 6 percent to $340.4 million. Sales of the hypertension treatment Bystolic grew 33 percent to $90.6 million. Sales from the three drugs launched last year – the anti-infection drug Teflaro, the lung disease drug Daliresp and the depression treatment Viibryd – totaled $33.8 million.
While revenue rose overall, Forest’s profit fell, because the New York company’s selling, general and administrative expenses climbed 39 percent to $396.1 million. Forest increased spending to support the three drugs launched last year.
The company has been developing new drugs to help offset the impact of losing patent protection on two of its biggest drugs, Lexapro and Namenda, over the next three years.
The company’s contract revenue also fell 27 percent to $34.1 million, as part of an agreement with Japanese drugmaker Daiichi Sankyo that gradually reduces residual royalties from the high blood pressure drug Benicar until March 2014.
Forest now expects earnings of $3.65 to $3.75 per share for fiscal 2012, up from its October forecast for earnings of $3.60 to $3.70 per share.
Analysts were expecting earnings of $3.67 per share for the year ending in March.
Date: January 17, 2012
Source: Associated Press