June 11 (Bloomberg) -- Forest Laboratories Inc. cut its fiscal 2013 earnings forecast because sales of Lexapro, a pill to treat depression, are being lost to Teva Pharmaceutical Industries Ltd.’s generic version.
Profit for the year ending in March will be 65 to 80 cents a share, 25 cents less than previously forecast, New York-based Forest said today in a statement. Forest declined 3.5 percent to $34.43 at the close in New York, the biggest single-day decline since August.
Forest lost the right to sell Lexapro exclusively after its patent for the drug expired in September. According to the U.S. Food and Drug Administration, Petach Tikva, Israel-based Teva and Forest will split the market for a six-month period that began in March, with Forest also licensing to Mylan Inc. an “authorized generic” to compete against Forest’s and Teva’s pills. After that, more copycat makers can start selling.
Forest said it overestimated how many pills it would sell and how much Teva would trim prices to win a share of the market. The company projects sales of Lexapro will fall to $215 million this fiscal year rather than to $250 million. Projected royalty income from the authorized generic version will be $60 million, down from an expected $115 million.
Forest also said it would stop shipping Levothroid, used to treat low levels of thyroid hormone. The company licenses the drug from another manufacturer. The FDA notified the maker that the agency had “regulatory and quality concerns,” leading to a shutdown of the plant where the pills are made, Forest said.
“Pending further details Forest has discontinued shipping Levothroid to its customers and does not know how long the product will be unavailable,” the company said.
Should the disruption go on “for an extended period of time” or if a recall of the medicine occurs, earnings would be reduced by 3 cents a share, Forest said.
Mylan, based in Canonsburg, Pennsylvania, fell 2 percent to $21.11.
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