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CORRECTED-UPDATE 1-Forest Labs beats view as research costs fall, drug sales rise
October 22, 2013 / 1:58 PM / in 4 years

CORRECTED-UPDATE 1-Forest Labs beats view as research costs fall, drug sales rise

(Corrects last paragraph to say the stock is listed on the New York Stock Exchange, not Nasdaq)

* Full-year adjusted earnings forecast $0.95-$1.15/share vs. est $0.96

* Alzheimer’s disease, depression drugs drive second-quarter sales

* Research and development costs fall 6 pct

* Shares up 2 pct

Oct 22 (Reuters) - Forest Laboratories Inc reported quarterly earnings that were twice what analysts expected due to strong sales of its Alzheimer’s disease and depression drugs and lower spending on research and development.

The drugmaker’s shares rose about 2 percent in opening trading on Tuesday.

Chief Executive Brent Saunders, who took the reins of Forest after activist investor Carl Icahn sought change at the top, said the company is reviewing changes to its strategy as it prepares to lose its patent on its key Alzheimer’s disease drug, Namenda, in 2015.

Namenda sales rose 7.8 percent to $396.3 million in the second quarter while those of the company’s depression drug, Viibryd, were up about 19 percent at $47.4 million.

Saunders, the former head of Bausch & Lomb Inc, started his term on Oct. 1, replacing longtime leader Howard Soloman. The move was part of a deal with Icahn to avert a proxy fight this past summer.

The company also cut its forecast for full-year research and development expense to about $800 million from about $835 million it estimated in April.

R&D expenses fell about 6 percent to $191.4 million in the second quarter ended Sept. 30.

Forest said it expected full-year adjusted earnings of $0.95 per share to $1.15 per share. Analysts were expecting $0.96, according to Thomson Reuters I/B/E/S.

Quarterly earnings were 36 cents per share, excluding product acquisition-related costs, way above analysts’ expectation of 15 cents per share.

Net profit rose to $70 million, or 26 cents per share, from $21 million, or 8 cents a share, a year earlier.

Revenue increased to $855 million from $761 million a year earlier, and was above the analysts’ estimate of $841 million.

Forest shares were trading at $45.19 on the New York Stock Exchange. (Reporting by Zeba Siddiqui and Caroline Humer; Editing by Jeffrey Benkoe and Kirti Pandey)

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