Forest Labs Fourth Quarter Results Top Estimates

(RTTNews) - Pharmaceutical company Forest Laboratories, Inc. (FRX), which is being acquired by Actavis plc (ACT), reported Tuesday a profit for the fourth quarter that increased from last year, reflecting strong double-digit sales growth amid strong contribution from next generation products and acquired product lines. Both adjusted earnings per share and quarterly revenues topped analysts' expectations.

Specialty pharmaceutical company Actavis agreed in mid-February to acquire rival drug maker Forest Laboratories in a cash and stock deal valued at about $25 billion. The deal is expected to create a specialty pharmaceutical company with combined annual revenues of over $15 billion targeted for 2015. The deal is expected to close in mid-year 2014. Dublin, Ireland-based Actavis is the world's second-largest generic drug maker by market value.

On Monday, Forest Laboratories agreed to acquire Furiex Pharmaceuticals, Inc. (FURX) for up to $1.46 billion, including about $1.1 billion in cash. The deal, which has the consent of Actavis, will add global rights to eluxadoline, Furiex's lead product, and bolster its gastroenterology business.

The New York-based company reported net income of $54.08 million or $0.20 per share for the fourth quarter, higher than $45.43 million or $0.17 per share in the prior-year quarter.

Results for the latest quarter primarily includes charges of $0.39 per share related to project rejuvenate, $0.15 per share of Aptalis acquisition and integration costs and inventory step-up charge of $0.10 per share.

Excluding items, adjusted earnings for the quarter was $240.84 million or $0.87 per share, compared to $67.16 million or $0.25 in the year-ago quarter.

On average, 20 analysts polled by Thomson Reuters expected the company to report earnings of $0.44 per share in the quarter. Analysts' estimates typically exclude special items.

Net revenues for the quarter grew to $1.09 billion from $813.83 million in the same quarter last year, and topped fifteen Wall Street analysts' consensus estimate of $956.19 million.

Net sales increased 33.8 percent to $1.05 billion from last year, and contract revenue grew to $44 million from $30.64 million in the year-ago quarter.

The company noted that sales growth was driven by sales of its next generation products which surged 69.6 percent to $431.1 million from last year, and sales of products acquired with the purchase of Saphris and the acquisition of Aptalis which totaled $136.3 million in the quarter.

In the central nervous system franchise, sales of Namenda, drug for moderate and severe Alzheimer's disease, declined 13.6 percent to $379.2 million, and sales of Viibryd, drug for major depressive disorder, increased 18.4 percent to $52.8 million a year ago.

In the respiratory franchise, sales of Daliresp, chronic obstructive pulmonary disease treatment, grew 27.7 percent, and tudorza sales more than doubled.

Bystolic (nebivolol), a beta-blocker for the treatment of hypertension, recorded 8.3 percent rise in sales to $142.9 million from last year. FRX closed Monday's regular trading session at $89.50, down $1.16 on a volume of 2.22 million shares. In the past 52-week period, the stock has been trading in a range of $36.89 to $100.88.