UPDATE 5-Forest qtly earnings down, Lexapro sales fall

* Forest fiscal Q4 net profit down, Lexapro sales fall

* Non-GAAP EPS 76 cents/shr vs 75 cents consensus estimate

* Revenue falls short of analysts' expectations

* Shares down 5.2 pct in afternoon trading
(Recasts first sentence, updates share price)

By Toni Clarke

BOSTON, April 21 (Reuters) - Forest Laboratories Inc (FRX.N)
said on Tuesday fiscal fourth-quarter earnings fell as lower
sales of its antidepressant Lexapro offset higher sales of its
drugs for Alzheimer's disease and hypertension.

Forest's shares were down 5.2 percent at $21.23 in afternoon
trading on the New York Stock Exchange.

Net profit in the quarter ended March 31 dropped to $92.8
million, or 31 cents a share, from $172.8 million, or 55 cents a
share, a year ago.

Revenue fell to $965.5 million from $990.9 million a year
ago. Analysts had expected roughly $1 billion in revenue
expected, according to Reuters Estimates.

Excluding one-time items, the company earned 76 cents a
share as it benefited from cost controls. Analysts had on
average expected earnings of 75 cents a share.

The company took a charge of 45 cents a share related to an
ongoing investigation by the U.S. Department of Justice into the
company's promotional activities.

Forest said it expects earnings in the year ended March 31,
2010, of $3.45 to $3.55 a share and revenue of about $4.1
billion. Analysts had on average forecast fiscal 2010 earnings
of $3.50 a share on revenue of $4.2 billion.

"The market will likely see this guidance number as
disappointing given that most investors we have spoken to were
looking for more," said Corey Davis, an analyst at Natixis
Bleichroeder.

Net sales for the quarter slipped to $896.7 million, from
$898.7 million a year ago.

Sales of Lexapro, Forest's biggest drug, fell 5 percent to
$548.5 million, a figure lower than analysts expected.

"Overall, we view this as a decent quarter," said Aaron Gal,
an analyst at Sanford Bernstein. "A revenue miss is never a
positive and expectations for 2010 are OK, but certainly not
exciting."

Sales of its Alzheimer's drug Namenda rose 7.7 percent to
$243.8 million, while sales of its hypertension drug Bystolic,
launched in January 2008, were $29.7 million, representing a
roughly two-fold increase from the quarter a year ago.

Lexapro and Namenda are expected to lose patent protection
in 2012 and 2015, respectively, leaving investors wondering how
the company can fill the gap.

Forest executives said on a conference call with investors
that it is actively looking to acquire new products and is
assessing potential acquisitions to help expand its pipeline.

On Monday, Forest said Savella, its new drug to treat the
pain condition fibromyalgia, will become commercially available
on April 28. It will compete with Eli Lilly & Co's (LLY.N)
Cymbalta, which is approved to treat fibromyalgia and
depression.

Gene Mack, an analyst at Lazard Capital Markets, estimates
peak sales of Savella could reach around $400 million.

Forest said its fiscal 2010 forecast includes a sales
projection for Lexapro of about $2.3 billion, roughly the same
as in fiscal 2009. It expects sales of Namenda to grow about 12
percent from the $949.3 million reported in fiscal 2009; and it
expects Bystolic sales of about $195 million, compared with
$69.2 million in fiscal 2009.

The company expects sales of Savella to be about $30
million.
(Reporting by Toni Clarke, editing by Dave Zimmerman and
Matthew Lewis)