Thanks to Lexapro generics, Forest swings to loss on 32% drop in yearly sales

No one expected Forest Laboratories to post quarterly sales growth. How could it? The company's flagship drug, Lexapro, lost patent protection just as last year's fiscal fourth quarter drew to a close. So, this time around, Forest's sales were destined to drop.

And drop they did: The company's quarterly sales took a 21% hit from generic competition for that blockbuster antidepressant. And its full-year results were even more dispiriting; year over year, sales fell by 32%, to $4.6 billion. Although fourth-quarter earnings beat analyst estimates--thanks to lower expenses, among other things--Forest swung into the red for the full year. The company posted a net loss of $32.1 million, down from a $979 million profit for the previous year.

CEO Howard Solomon put a new-product spin on the results. Launching 7 products was an expensive endeavor, but one that Forest didn't want to skimp on; "We have not compromised the effort necessary to achieve effective physician awareness even though we have had to deal with multiple launches, Solomon said in a statement. Together with the loss of Lexapro exclusivity, "[t]hat confluence ultimately created a trough in our earnings" and a loss for the year.

Solomon understandably preferred to talk about the future. Bystolic, the blood pressure treatment is set to surpass half a billion dollars this year, after posting $433 million in fiscal 2013 sales. Forest's new antidepressant, Viibryd, is expected to hit $220 million in fiscal 2014, compared with $163 million previously. Linzess is expected to take a big leap, to $170 million from $24 million. And the newly launched respiratory treatment Tudorza is pegged at $90 million for the year, more than 3 times its 2013 sales of $23 million. 

The company anticipates some nice growth in its Namenda franchise, too, because it's soon to launch an extended-release version, Namenda XR.  "[I]t will take time for sales of our new products to increase in volume," Solomon said, "and we expect that some of these new products will be especially successful ... [W]e are in a great position to succeed well into the future."

- see the release from Forest
- get more from The Wall Street Journal

Suggested Articles

Johnson & Johnson faces a litany of problems, but executives are clearly not concerned—at least not about the company's short-term fortunes.

This week, Goldman Sachs resurrected a burning question: How can pharma companies profit from curing patients with one-time gene and cell therapies?

CMS has determined how it'll pay for Gilead's CAR-T cancer therapy, Yescarta, for outpatient use, but hasn't yet decided on Gilead's…