October 21, 2008 / 12:38 PM / 11 years ago

UPDATE 2-Forest Labs profit beats Street as Namenda soars

* Profit 80 cents/share vs estimate of 71 cents

* Namenda sales soar 28 percent

* Raises FY profit forecast

* Shares rise 2 pct (Adds analyst comments, share price movement, other details)

NEW YORK, Oct 21 (Reuters) - Forest Laboratories Inc FRX.N posted higher-than-expected quarterly profit on Tuesday, fueled by stronger sales of its drugs for Alzheimer’s disease and depression and lower research spending.

Net income rose to $244.1 million, or 80 cents per share, for the fiscal second quarter ended in September, from $225.2 million, or 71 cents per share, a year earlier.

Analysts on average expected 71 cents per share, according to Reuters Estimates. Six cents of the 9-cent beat stemmed from lower research and development payments, which were delayed to later in the year, Sanford Bernstein analyst Ronny Gal said in a research note.

Revenue rose 8 percent to $992.5 million, compared with the consensus analyst estimate of $976 million, according to JP Morgan analyst Chris Schott.

Sales of its Alzheimer’s treatment, Namenda, jumped by 28 percent to $246.1 million, while sales of its Lexapro antidepressant rose 4 percent to $583.9 million.

Research and development spending fell by 14 percent to $146.4 million.

The New York-based company lifted its fiscal-year forecast to a range of $3.30 to $3.40 per share, excluding items, up from its earlier range of $3.20 to $3.30.

Investors are concerned Forest will be unable to build up its product portfolio before Lexapro and Namenda lose U.S. patent protection, expected in the early part of next decade.

Forest said on Monday that the U.S. Food and Drug Administration was unable to take final action on Forest’s experimental drug for fibromyalgia, a pain condition, by the scheduled deadline of Oct 18. The FDA indicated its assessment could be completed in a matter of weeks, but could not confirm specific timing, the company said.

Forest shares rose 44 cents, or 1.85 percent, to $24.16 on the New York Stock Exchange on Tuesday morning. (Reporting by Lewis Krauskopf; editing by John Wallace and Matthew Lewis)

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