Profile: Forest Laboratories, Inc. (FRX)

Forest Laboratories, Inc. and its subsidiaries develop, manufacture and sell both branded and generic forms of ethical drug products, which require a physician’s prescription. The Company’s products in the United States consist of branded ethical drug specialties marketed directly or detailed to physicians by its Forest Pharmaceuticals, Forest Therapeutics, Forest Healthcare, Forest Ethicare and Forest Specialty Sales. Its products include Lexapro, the Company’s selective serotonium reuptake inhibitor (SSRI) for the treatment of major depression and generalized anxiety disorder (GAD); Namenda, its N-methyl-D-aspartate (NMDA) antagonist for the treatment of moderate and severe Alzheimer’s disease; Bystolic, its beta-blocker for the treatment of hypertension, and Savella, a dual reuptake inhibitor for the treatment of fibromyalgia.

Savella

In January 2009, the Company received approval for the marketing of Savella (milnacipran HCl), an SNRI for the management of fibromyalgia. Fibromyalgia is a chronic condition characterized by widespread pain and decreased physical function and affects as many as six million people in the United States. The safety and efficacy of Savella was established in two Phase III trials conducted in the United States and submitted with the New Drug Application (NDA) involving more than 2,000 patients with fibromyalgia. The Company licenses the United States and Canadian rights to develop and commercialize Savella from Cypress Bioscience, Inc. (Cypress).

Dutogliptin

In October 2008, the Company entered into a collaboration agreement with Phenomix Corporation (Phenomix) to develop and commercialize dutogliptin in North America. Dutogliptin is an orally administered, small molecule dipeptidyl-peptidase-4 (DPP-4) inhibitor undergoing Phase III studies for the treatment of Type II diabetes mellitus. In Canada and Mexico, Forest has development and marketing rights, and Phenomix will receive a royalty based upon net sales in these countries. Phenomix retains development and commercialization rights to the product outside of North America and Mexico, and will pay Forest a royalty on net sales in these territories. Dutogliptin inhibits DPP-4 enzymes from breaking down the incretin hormone glucagon-like peptide 1 (GLP-1), thereby increasing the levels of this hormone in the digestive tract and the blood. The increased levels of GLP-1 stimulate insulin production by the pancreatic beta cells and reduce glucagon production by the pancreas, both of which result in reduced blood glucose levels.

F2695

In December 2008, the Company entered into a collaboration agreement with Pierre Fabre Medicament (Pierre Fabre) for the development and commercialization of F2695 in the United States and Canada. F2695 is a selective norepinephrine and serotonin reuptake inhibitor, two neurotransmitters known to play a role in regulating mood, and is being developed for the treatment of depression.

Bystolic

The Company commenced the sale and marketing of Bystolic in January 2008. Bystolic is a beta-1 selective beta-blocker with vasodilating properties. In its Phase III study program, Bystolic demonstrated reductions in sitting diastolic and systolic blood pressure in a general hypertension population. The studies also found that Bystolic was well tolerated, with a low incidence of side effects traditionally associated with beta-blockers. The Company licenses exclusive United States and Canadian rights to Bystolic from Mylan Inc. (Mylan). In February 2008, it amended its license agreement with Mylan to terminate Mylan’s further commercial rights for Bystolic in the United States and Canada, and to reduce future payment obligations to Mylan.

Cerexa, Inc.

On January 10, 2007, the Company acquired Cerexa, Inc. (or Cerexa), a biopharmaceutical company based in Oakland, California. Pursuant to the merger, it acquired worldwide development and marketing rights (excluding Japan) to ceftaroline acetate (ceftaroline), a broad-spectrum, hospital-based injectable cephalosporin antibiotic that exhibits bactericidal activity against the most resistant strains of gram-positive bacteria, including methicillin resistant Staphylococcus aureus (MRSA) in patients with complicated skin and skin structure infections (cSSSI). Ceftaroline has also demonstrated bactericidal activity against penicillin resistant Streptococcus pneumonia and gram-negative bacteria. Ceftaroline is being developed initially for the cSSSI indication and for the treatment of community acquired pneumonia (or CAP). In June 2008, it announced positive results from two globally conducted multi-center Phase III studies in the treatment of cSSSI. In both studies, ceftaroline as a monotherapy achieved the primary endpoint of non-inferiority versus a combination of vancomycin plus aztreonam.

NXL104

In January 2008, the Company entered into an agreement with Novexel, S.A. (Novexel) for the development, manufacture and commercialization of Novexel’s novel intravenous beta-lactamase inhibitor, NXL104, in combination with its ceftaroline compound. NXL104 is designed to be co-administered with select antibiotics to enhance their spectrum of activity. Under the terms of the license, it received the rights to administer NXL104 with ceftaroline as a combination product in North America. It also received a first negotiation right in North America to an additional NXL104 combination with ceftazidime, a cephalosporin antibiotic having a different spectrum of activity compared to ceftaroline. NXL104 inhibits bacterial enzymes called beta-lactamases that break down beta-lactam antibiotics (in particular penicillins and cephalosporins). Beta-lactamase inhibition represents a mechanism for counteracting resistance and enhancing the broad-spectrum activity of beta-lactam antibiotics.

Linaclotide

In September 2007, we entered into a 50/50 partnership in the United States with Ironwood Pharmaceuticals, Inc. (Ironwood) to co-develop and co-market Ironwood’s compound linaclotide. Linaclotide is being investigated for the treatment of constipation-predominant irritable bowel syndrome (IBS-C) and chronic constipation (CC). Linaclotide is an agonist of the guanylate cyclase type-C receptor found in the intestine and acts by a mechanism distinct from previously developed products for IBS-C and CC. Linaclotide is administered orally but acts locally in the intestine with no measurable systemic exposure.

Aclidinium

The Company has an agreement with Laboratorios Almirall, S.A. (Almirall), a pharmaceutical company, for the development and exclusive United States marketing rights to aclidinium, Almirall’s long-acting muscarinic antagonist. Aclidinium is being developed as an inhaled therapy for chronic obstructive pulmonary disease (COPD). The product is being developed in a Multi-Dose Dry Powder Inhaler (MDPI). COPD is a debilitating respiratory condition that includes two related lung diseases: chronic bronchitis and emphysema. In September 2008, the Company and Almirall announced results from two global Phase III studies of aclidinium. In both trials, once-daily aclidinium showed a statistically significant difference versus placebo in the primary endpoint of trough FEV1, a measure of pulmonary function that is decreased in patients with moderate to severe COPD.

Lexapro

Lexapro (escitalopram oxalate) is a single isomer version of citalopram HBr for the treatment of major depression. Citalopram is a racemic mixture with two mirror image molecules, the S- and R-isomers. The S-isomer of citalopram is the active isomer in terms of its contribution to citalopram’s antidepressant effects, while the R-isomer does not contribute to the antidepressant activity. With Lexapro, the R-isomer has been removed, leaving only the active S-isomer. Clinical trials demonstrate that Lexapro is a more potent selective serotonin reuptake inhibitor (or SSRI) than its parent compound, and confirm the antidepressant activity of Lexapro in all major clinical measures of depression.

In March 2009, the FDA approved the Company’s supplemental NDA for the acute and maintenance treatment of Major Depressive Disorder (MDD) in adolescents, 12-17 years of age. The approval of Lexapro for the treatment of adolescent depression was supported by two placebo-controlled studies, one conducted in adolescent patients taking Lexapro, and one conducted in children and adolescents taking citalopram. Lexapro was developed by the Company and H. Lundbeck A/S (Lundbeck), a Danish pharmaceutical firm, which licenses to it the exclusive United States marketing rights to this compound, as well as Celexa.

Namenda

Namenda is a moderate-affinity, uncompetitive N-methyl-D-aspartate (NMDA) receptor antagonist that modulates the effects of glutamate - a neurotransmitter found in the brain. Excessive levels of glutamate are hypothesized to contribute to the dysfunction and eventual death of brain cells observed in Alzheimer’s disease. It obtained the rights to develop and market memantine in the United States by license agreement with Merz Pharma GmbH & Co. KgaA of Germany (Merz), the originator of the product. In February 2008, it received preliminary results of a Phase III study of memantine HC1 in a once-daily formulation.

Cariprazine

The Company entered into a collaboration and license agreement with Gedeon Richter Ltd. (Richter), for the development of and exclusive United States rights to Richter’s cariprazine (RGH 188) and related compounds, being developed as an atypical antipsychotic for the treatment of schizophrenia, bipolar mania and other psychiatric conditions. In September 2008, it received positive preliminary top-line results from a Phase II study of cariprazine in patients with acute mania associated with bipolar disorder. A review of top-line results of a Phase II study in schizophrenia indicated that cariprazine demonstrated a nominally statistical significant therapeutic effect compared to placebo in a low-dose arm and a numerical improvement compared to placebo in a high-dose arm that did not reach nominal statistical significance.

Radiprodil (RGH-896) and mGLUR1/5 Compounds

The Company entered into two new collaboration agreements with Richter with whom it is developing cariprazine for the treatment of schizophrenia and bipolar mania. The first collaboration will focus upon a group of compounds that target the NR2B receptor that will be developed for the treatment of chronic pain and other central nervous system (CNS) conditions. The second new collaboration will focus upon a series of novel compounds that target metabotropic glutamate receptors (mGLUR1/5). mGLUR1/5 antagonists represent novel potential agents for the treatment of anxiety, depression and other CNS conditions.

Oglemilast

Oglemilast is an orally available phosphodiesterase-IV (PDE4) inhibitor in development for COPD and asthma, and may also have use in other conditions. Bronchodilators and anticholinergics are prescribed therapies in COPD, but do not address the underlying inflammation. PDE4 inhibitors represent a new class of drugs that are interesting because they have the potential to relax the smooth muscles of the airway resulting in bronchodilation, as well as inhibit inflammatory cell activity, thus providing both short-term relief and control over the progression of the disease.

Co-Promotion of Benicar with Daiichi Sankyo

The Company has a co-promotion agreement with Daiichi Sankyo (Sankyo) for the co-promotion in the United States of Benicar (olmesartan medoxomil) an angiotensin receptor blocker (ARB) discovered and developed by Sankyo for the treatment of hypertension. Pursuant to the co-promotion agreement with Sankyo, the Company shared with Sankyo in the detailing of the product to physicians, hospitals, managed care organizations and other institutional users of pharmaceutical products. As of July 1, 2008, it terminated its co-promotion agreement for Azor (amlodipine and olmesartan medoxomil), Sankyo’s fixed-dose combination of two antihypertensives, the calcium channel blocker amlodipine besylate and the angiotensin receptor blocker olmesartan medoxomil.