NEW YORK, April 21 /PRNewswire-FirstCall/ -- Forest Laboratories, Inc. (NYSE: FRX), a U.S.-based pharmaceutical company, today announced that earnings per share for the fourth quarter of fiscal year 2009 were $0.31 per share. Excluding the one-time USAO charge described below, non-GAAP earnings per share for the fourth fiscal quarter equaled $0.76. This compares to last year's reported earnings per share of $0.55, including a licensing payment to Novexel, S.A. of $110.1 million, or $0.35 per share and non-GAAP earnings per share of $0.90.

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The Company has provided a $170 million pretax reserve, or $0.45 per share, in connection with ongoing discussions with the United States Department of Justice (DOJ) arising out of the investigations led by the U. S. Attorney's Office for the District of Massachusetts (USAO) into marketing, promotional and other activities primarily in connection with Lexapro(R), Celexa(R) and Levothroid(R). These discussions with the DOJ have not yet concluded, and there can be no assurance as to when they will conclude or whether they will lead to a resolution, or the amount of any settlement that may be reached. Accordingly, until the investigation is resolved, there can be no assurance that the amount reserved by the Company will be sufficient and that a larger material amount will not be required. The Company continues to cooperate with these investigations.

Net sales for the quarter ended March 31, 2009 were $896.7 million, essentially unchanged from $898.7 million in the prior fiscal year. Sales of Lexapro (escitalopram oxalate), an SSRI indicated for the initial and maintenance treatment of major depressive disorder in adults and, most recently, adolescents and generalized anxiety disorder in adults were $548.5 million, a decline of 5.0% from the year-ago period. Sales of Namenda(R), an NMDA receptor antagonist for the treatment of moderate and severe Alzheimer's disease, totaled $243.8 million in the quarter, an increase of 7.7% from last year's fourth quarter. Sales of Bystolic(TM), a beta-blocker approved for the treatment of hypertension, launched in late January 2008, were $29.7 million, just under a twofold increase from the quarter a year ago. Contract revenue of $55.2 million declined 8.2%, principally from the Benicar(R) (olmesartan medoxomil) co-promotion income of $50.5 million, which declined 13.2% compared to last year. Per the agreement with Daiichi Sankyo, active co-promotion of Benicar ended in the first quarter of fiscal 2009 and the Company now receives a gradually reducing residual royalty until the end of March 2014. Interest income of $12.7 million decreased from $31.1 million reported in the prior year, due to lower interest rates earned on the Company's short duration portfolio. Other income was essentially unchanged at $0.8 million. Net revenues for the quarter, which includes net sales, contract revenue, interest and other income, were $965.5 million, a decrease of 2.6% from $990.9 million in the prior fiscal year.

Selling, general and administrative expenses during the quarter increased 57.3% to $515.1 million from $327.4 million last year and included a charge of $170.0 million related to the USAO investigation as well as significant expenses associated with the launch of Bystolic and pre-launch spending for Savella(TM), a selective serotonin norepinephrine dual reuptake inhibitor (SNRI) indicated for the management of fibromyalgia that was approved in January. Excluding the USAO investigation charge, SG&A expense increased 5.4% versus the prior year. Research and development spending for the quarter was $123.8 million as compared to $255.1 million in the year-ago period. Research and development spending in the prior year included a charge of $110.1 million for an upfront license payment to Novexel for the development rights to NXL-104 in the United States.

Income tax expense for the quarter was $26.2 million, reflecting a quarterly effective tax rate of 22.0%. Reported net income for the quarter ended March 31, 2009 was $92.8 million compared to $172.8 million in the prior year.

Diluted shares outstanding for the fourth quarter were 302,123,000, a reduction of 10,511,000 shares from the year-ago period due mainly to the Company's share repurchase program. There were no share repurchases during the current quarter.

Twelve-month Results

Net revenue for the fiscal year ended March 31, 2009 increased 2.3% to $3,922.8 million from $3,836.3 million in the prior fiscal year. Lexapro sales increased 0.4% to $2,300.9 million from $2,292.0 million last fiscal year. Sales of Namenda increased 14.4% to $949.3 million from $829.7 million and sales of Bystolic reached $69.2 million in its first full year on the market, while the earnings contribution from Benicar decreased 7.8% to $195.6 million from $212.1 million.

Selling, general and administrative expense increased 27.7% to $1,474.3 million from $1,154.8 million, and included one-time charges of $44.1 million related to the termination of the Azor co- promotion agreement and $170.0 million related to the USAO investigation. Excluding the impact of the one-time charges, selling, general and administrative expense increased 9.1%. Research and development spending decreased 1.4% to $661.3 million, including development milestone expenses of $59.5 million and total licensing payments of $150.0 million related to the Phenomix and Pierre Fabre collaboration agreements. This compares to last fiscal year spending of $671.0 million, including development milestone expenses of $51.0 million and total license payments of $180.0 million related to Ironwood Pharmaceuticals and Novexel collaboration agreements.