Forest Laboratories, Inc. (NYSE:FRX) released its fourth quarter results, beating Wall Street expectations and also providing higher-than-expected guidance for the current quarter. It also announced plans for another key acquisition.
The pharmaceutical company reported GAAP earnings per share of 7 cents and non-GAAP earnings per share of 27 cents. Revenue was reported to be $846.8 million in the December quarter. In the same quarter a year ago, net sales were $678 million.
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Analysts had been expecting the company to report earnings per share of 4 cents on revenue of $827.25 million. As a result, shares of Forest Laboratories climbed as much as 8% in premarket trading after the company released its December quarter results.
Next-generation products drive Forest Laboratories’ results
According to Forest Laboratories, Inc. (NYSE:FRX)’s earnings report this morning, its next-generation products were the main drivers of its strong fourth quarter performance. This segment of the company’s sales alone accounted for $375.4 million—a 59.4% increase sequentially.
The pharmaceutical company noted increases in all of its main products. Sales of Alzheimer’s drug Namenda rose 5.2% year over year. Sales of depression drug Viibryd rose 29.7% year over year. Sales of hypertension drug Bystolic rose 20.1% year over year, while sales of antibiotic Teflaro increased 93.2%.
The company also raised its non-GAAP earnings per share guidance for the fiscal year ending March 31, 2014. It expects to see earnings be between $1.25 and $1.35 per share for the full year.
Forest Laboratories provides other updates
Forest Laboratories, Inc. (NYSE:FRX) also provided more details on some of its more recent developments. It launched Project Rejuvenate, which is a number of strategic steps aimed at cutting costs and streamlining operations, in December. The company said it wants to become “more nimble in responding to a changing environment and to reduce operating expenses by $500 million by the end of fiscal year 2016 compared to the fiscal 2014 cost base.
The company’s board authorized the buyback of up to $1 billion of common stock and issued $1.2 billion in new long-term debt by offering eight-year senior unsecured 5% fixed rate notes. In addition, Forest Laboratories, Inc. (NYSE:FRX) acquired the exclusive rights to schizophrenia and bipolar drug Saphris for $240 million in cash. Those rights were purchased from Merck & Co., Inc. (NYSE:MRK), and the deal closed Jan. 17.
On Jan. 8, Forest Laboratories, Inc. (NYSE:FRX) said it entered into an agreement to acquire the U.S.-based specialty gastrointestinal and cystic fibrosis company Aptalis for $2.9 billion in cash. That deal includes global private investment firm TPG. Currently antitrust officials are reviewing this deal, which Forest believes will add $700 million in sales and be accretive to non-GAAP earnings per share by about 78 cents in the 2015 fiscal year.