UPDATE 2-Forest posts loss as antidepressant sales plummet
* Forest Labs posts 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
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 eviscerated by generic competition and other products were affected by higher rebates under a federal program that subsidizes the cost of prescription drugs.
But the company reported what it said were promising initial sales to wholesalers of two new products that it hopes will drive future growth, and it said the underlying prescription growth rate of its existing products remains solid. Forest's shares were down 3 cents to $37.56.
Forest 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.
Excluding one-time licensing agreement payments, the company posted a loss of 21 cents per share in the fiscal third quarter.
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, which includes product sales, to be between $3.1 billion and $3.2 billion.
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, once its top-selling product, and drive future growth.
Sales of Lexapro fell to $20.3 million in the quarter from $593 million a year ago. Lexapro's patent expired in March, 2012.
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.
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 research note on Monday, Cowen and Company analyst Ken Cacciatore estimated a potential acquisition value of Forest of between $50 and $55 a share.
Forest's chief financial officer, Frank Perier, said on a conference call with investment analysts that the company needs at least a year to get a sense of how well the new products perform before altering strategy.
"It has been a difficult year from an earnings standpoint," he said. "I'm not going to apologize for it. It has. We're not pleased that we are so close to the bottom end of the range but we're doing our best to get this year behind us and look forward to future growth."
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 climbed 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.
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