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."
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