Forest Labs cuts FY 2013 earnings forecasts on Lexapro woes

Following the expiration of US drugmaker Forest Laboratories’ (NYSE: FRX) once best-selling anxiety drug Lexapro’s (escitalopram) patent exclusivity in March 2012, the company says rapidly evolving and unanticipated conditions in the escitalopram market necessitate revisions to its previous forecasts for both branded Lexapro sales and royalty income earned on sales of the escitalopram authorized generic, distributed by an independent third party. The combined impact is a reduction in projected earnings for the full fiscal year ending March 2012 of around $0.25 per share.

Forest’s actively promoted products are collectively on plan. The company now expects reported fully diluted earnings per share for FY 2013 to be in the range of $0.65 to $0.80 per share – below the $1 estimate of analysts surveyed for FactSet Research - and non-GAAP fully diluted earnings per share (which excludes acquisition related amortization) of $0.95 to $1.10. The news saw Forest’s shares fall 8% in pre-market trading yesterday.

Royalty income on authorized generic below previous forecasts