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NEW YORK (AP) — Forest Laboratories Inc. said Tuesday its net income dropped 79 percent in the fiscal first quarter after its antidepressant Lexapro lost patent protection, allowing other companies to sell low-cost versions of the drug.
Generic versions of Lexapro went on sale in February and March, and Forest's revenue from the drug plunged 81 percent in the first quarter, to $110 million. The company said in June that the competing generics were selling for lower prices than it had expected, and they were also taking a slightly larger share of the market than Forest had projected. Forest still sells the brand name version of Lexapro, and it gets some revenue from sales of Mylan Inc.'s company-approved generic.
Forest also reported greater costs related to the sales of drugs it launched in 2011.
Forest's profit fell to $55.3 million, or 21 cents per share, from $258.1 million, or 90 cents per share, in the first quarter of fiscal 2012. Excluding one-time charges related to acquisitions, the company said it earned 28 cents per share over the three months ended June 30, down from an adjusted $1.07 per share a year earlier. Its revenue fell 29 percent, to $821.1 million from $1.15 billion.
Analysts were forecasting income of 26 cents per share and $810.2 million in revenue, according to FactSet.
Forest said revenue from its Alzheimer's disease drug Namenda grew 15 percent to $368.4 million. Revenue from its blood pressure drug Bystolic rose 38 percent to $107.8 million and sales of its fibromyalgia treatment Savella rose 3.5 percent to $26.7 million.
Forest has launched several new drugs to help make up for the decline in sales of Lexapro and the loss of patent protection on Namenda, which is scheduled to happen in 2015. The company said sales of its antidepressant Viibryd totaled $37.4 million in the first quarter, and revenue from its lung disease drug Daliresp grew to $17.8 million. Both drugs reached the market less than a year ago. It reported $9.4 million in revenue from its anti-infection drug Teflaro, which went on sale in early 2011.
Forest is engaged in a proxy contest with billionaire investor Carl Icahn, the company's second-largest shareholder. Icahn has criticized Forest because of its declining stock price and has said the company is not explaining its succession plans for longtime Chairman and CEO Howard Solomon, among other issues. Icahn has nominated four alternative directors to the company's board. He also nominated four candidates to the board in 2011.
Shareholders will vote on Forest's and Icahn's nominees at the company's annual meeting on Aug. 15.
Shares of Forest Laboratories rose 16 cents to $35.34 in morning trading.