Forest Laboratories ($FRX) could well be playing a dirge at corporate headquarters today. The company's leading drug, Lexapro, now has new generic competition. Teva Pharmaceutical Industries ($TEVA) got FDA approval for its version yesterday, and immediately started shipping the product, putting some $2.9 billion of Forest's annual sales at risk.
Though Forest has been anticipating this event for years now, and has made some progress at filling the impending sales gap, it's not going to have an easy time over the next couple of years. Lexapro is far and away the company's biggest drug, accounting for around half its U.S. revenue.
As Forest tries to build sales for new products--such as its latest antidepressant, Viibryd--it's hoping that expansion in the overall market for antidepressants, as well as some price increases, can keep Lexapro numbers up around $2 billion this year. Teva's version will be the only independent rival until the Israeli company's 180-day exclusivity expires in mid-September, so hanging onto branded Lexpro sales will be much easier this year than next, when other generics makers will pile into the market. Forest can also expect some revenue from Mylan's ($MYL) authorized generic version of Lexapro.
Special Report: Forest Laboratories -- 10 Largest U.S. Patent Losses