UPDATE 2-Forest Labs shares gain as new CEO delivers earnings beat
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Jan 21 (Reuters) - Forest Laboratories Inc on Tuesday beat analyst expectations for both profit and revenue and raised its full-year profit forecast, giving investors confidence in new Chief Executive Brent Saunders a year ahead of Forest's key drug coming off patent.
The company's shares rose about 3.2 percent, or $2.19, to $70.93 in morning trading on the New York Stock Exchange.
Forest, which is facing the expiration of the patent on its key Alzheimer's treatment next year, reported better than expected sales for that product, Namenda. Sales of Viibryd, used to treat depression, were also above expectations.
The company raised its adjusted earnings forecast to $1.25 to $1.35 per share for its fiscal year ending March 31, from the 95 cents to $1.15 it estimated in October.
"The bottom line is that Forest appears to be executing," Cowen & Co analyst Ken Cacciatore said in a research note. In addition to higher revenues than expected, operating costs were below expectations, he said.
Saunders took over as CEO on Oct. 1 after the company came under pressure from activist investor Carl Icahn, who owns more than 10 percent of its shares.
Saunders, who previously ran Bausch & Lomb Inc, has said Forest would expand its portfolio through acquisitions and two weeks ago announced it would purchase specialty drugmaker Aptalis for nearly $3 billion.
NET INCOME AFTER LOSS
Forest reported net income of about $18 million, or 7 cents per share, in the third quarter ended Dec. 31, from a loss of $153.6 million, or 58 cents per share, a year earlier.
Excluding items, earnings were 27 cents per share.
Total revenue rose about 23 percent to $878.4 million.
Analysts on average had expected earnings of 4 cents per share on revenue of $827.3 million, according to Thomson Reuters I/B/E/S.
Sales of Forest's Alzheimer's drug, Namenda, rose about 5 percent to $363.7 million. The drug accounted for more than a third of total product sales in the quarter.
Revenue from Bystolic, Forest's hypertension drug, rose about 20 percent to $130.7 million.
Forest's results were hit in the year-ago quarter after sales of its antidepressant, Lexapro, were eroded by competition from generics. (Reporting by Caroline Humer in New York and Vrinda Manocha in Bangalore; Editing by Phil Berlowitz)