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Forest Labs confident in post-Lexapro profits
June 20 |
June 20 (Reuters) - The longtime chief of Forest Laboratories Inc expressed confidence the drugmaker would see profit rebound in the coming years on the strength of as many as nine new medicines.
Forest, which for a second year faces a proxy challenge from activist investor Carl Icahn, lost U.S. patent protection in March on its top-selling antidepressant drug Lexapro, leading to expectations that profits will fall by about 80 percent this fiscal year.
Alzheimer's drug Namenda, another top seller, is seen losing U.S. patent protection in 2015, further pressuring the New York-based drugmaker's results.
At a meeting for analysts and investors on Wednesday, Forest Chief Executive Howard Solomon predicted that following the patent losses, the company would produce "steady and significant earnings growth until we reach and surpass when we got last year."
Regarding the expirations Forest faces on Lexapro and Namenda -- known in the industry as patent cliffs -- Solomon said: "We're proud of our cliffs. You can't have a cliff unless you have a mountain."
The company, which last held an analyst meeting 2-1/2 years ago, touted the prospects for nine products expected to fill the gaps left by Lexapro and Namenda. They include five medicines that have been recently approved for conditions such as depression, fibromyalgia and high blood pressure.
Forest, which has a market value of about $9 billion, is also awaiting potential approval for drugs for chronic obstructive pulmonary disease and irritable bowel syndrome, and expects to seek approval for a new antidepressant and an antipsychotic this year.
Earlier this month, Forest cut its fiscal-year profit forecast as the arrival of U.S. generic versions of Lexapro take a bigger toll than expected.
Forest now projects earnings of 65 cents to 80 cents per share for its fiscal year ending in March 2013 -- a decline of about 80 percent from the previous fiscal year as the company also invests in its new products.
Icahn, Forest's second largest shareholder, is seeking representation on the drugmaker's board after failing to get his nominees elected last year. On Tuesday, Icahn named his four nominees and said he was seeking access to Forest's books and records.
Without mentioning anyone specifically, Solomon, who has led the company since 1977, said on Wednesday, "Some investors look at us as if we have no history."
Forest shares were down 0.4 percent at $34.52 in morning trading on the New York Stock Exchange.
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