CORRECTED-UPDATE 1-Forest posts loss as antidepressant sales plummet

Tue Jan 15, 2013 2:30pm EST

(Corrects to show Namenda sales rose, not fell, to $345.8 mln)

* Forest Labs posts much wider-than-expected loss

* Posts net loss of 58 cents/shr, sales down 41.6 pct

* Company cites generic competition to Lexapro

* Says fiscal yr 2013 earnings to be at low end of forecast

* Shares fall 5.3 percent in premarket trading

By Toni Clarke

Jan 15 (Reuters) - Forest Laboratories Inc posted an unexpectedly large loss in its fiscal third quarter as sales of its antidepressant Lexapro were buffeted by generic competition and sales of its Alzheimer's drug Namenda were negatively affected by higher rebates under a federal program that subsidizes the cost of prescription drugs.

The company, whose shares fell 5.3 percent in premarket trading on Tuesday, posted a net loss in the quarter that ended Dec. 31, of $153.6 million, or 58 cents a share, compared with a profit of $278.4 million, or $1.04 a year ago. Sales fell 41.6 percent to $678 million from $1.2 billion a year ago.

Analysts on average had expected a loss of 14 cents a share, according to Thomson Reuters I/B/E/S.

The company said it expects its adjusted earnings per share for the fiscal year ending March 31 to be at the lower end of its previously forecast range of 45 cents to 60 cents a share. It expects revenue to be between $3.1 billion and $3.2 billion.

Excluding one-time licensing agreement payments, the company posted a loss of 21 cents per share in the fiscal third quarter.

Forest, which fought a bruising battle last year with activist Carl Icahn, is placing its hopes on a series of new products it anticipates will offset losses from Lexapro and drive future growth.

One of those products is Tudorza, a long-acting inhaled treatment for chronic obstructive pulmonary disease (COPD), which Forest said recorded initial sales of $12.2 million since its launch in December.

Another new product is Linzess for irritable bowel syndrome and chronic constipation, which the company also launched in December. It recorded initial sales of $19.2 million.

Namenda's sales rose 1.6 percent to $345.8 million. Analysts on average were expecting sales of $385 million. Forest blamed higher rebates required under the Medicare Part D prescription drug program. It said these typically peak in the fiscal third quarter and are expected to return to normal levels in the fiscal fourth quarter.

Sales of Bystolic, its blood pressure drug, rose 20.1 percent to $108.8 million, compared with analyst expectations of $114 million. The company is in the process of resolving litigation with potential generic rivals that will not allow generic Bystolic on the market until 2021.

Sales of Daliresp, a drug launched in August 2011 designed to reduce the risk of exacerbations in patients with COPD, rose to $17.5 million from $8.4 million a year ago. Sales of the company's antidepressant Viibryd soared 97 percent to $40.6 million.

Teflaro, a broad-spectrum antibiotic to treat community-acquired bacterial pneumonia launched in March 2011, generated sales of 11.5 million, up from $6.5 million.

Although Icahn was only able to get one person onto Forest's board, some analysts believe Forest could still ultimately be acquired by a big pharmaceutical company.

In a recent research note, Cowen and Company analyst Ken Cacciatore estimated a potential acquisition value of Forest of between $50 and $55 a share.

Forest's shares were at $35.49 in premarket trading on the New York Stock Exchange, down 5.3 percent from Monday's close. (Reporting By Toni Clarke; Editing by Maureen Bavdek)