Forest Laboratories, Inc.
) recently entered into a settlement agreement with Glenmark
Pharmaceuticals Ltd., relating to its patent infringement
litigation for Bystolic (nebivolol).
Glenmark was looking to launch its generic version of
Bystolic. Under the terms of the settlement agreement, Forest
Labs will provide a license to Glenmark allowing the latter to
launch its generic versions of Bystolic subject to certain
Glenmark will be allowed to launch its generic version three
months ahead of the expiration of US Patent No. 6,545,040
(including any extensions and/or pediatric exclusivities) or on
gaining final FDA approval of its abbreviated new drug
application (ANDA), whichever occurs later. However,
Glenmark could launch its generic version earlier in certain
We note that Forest Labs has already settled litigation with
companies like Hetero Labs Ltd., Alkem Laboratories, Ltd.,
Indchemie Health Specialties Pvt. Ltd. and Torrent
Pharmaceuticals Ltd. All these companies were looking to launch
their generic versions of Bystolic.
However, Forest Labs still has patent infringement litigation
against Amerigen Pharmaceuticals Ltd. and
Watson Pharmaceuticals Inc.
), and related companies pending in the court.
Forest Labs has a strong presence in the cardiovascular
disease market. Forest Labs' cardiovascular products include
hypertension drug Benicar/HCT and Bystolic, a long-acting,
cardio-selective beta-blocker. We believe that Bystolic's unique
characteristics such as its low side-effect profile could make it
a multi-million dollar revenue generator.
We continue to be encouraged by positive efficacy and
tolerability data which we believe will help differentiate the
drug from generic beta blockers in the market. Bystolic turned in
sales of $347.8 million in fiscal 2012, up 31.6%. Bystolic has
$500 million potential in its current indication.
Forest Labs is looking to drive Bystolic's growth by providing
additional data on the appropriate use of the product. The
company is also working on extending the product's lifecycle by
conducting a phase III study with a fixed dose combination of
Bystolic and valsartan (the market leader) for hypertension. A
fixed dose combination product would expand the patient
population for Bystolic.
We currently have a Neutral recommendation on Forest Labs
which carries a Zacks Rank #3 (Hold). Forest is facing tough
times with Lexapro losing patent protection.
Moreover, the company lowered its guidance for Namenda, which
is currently the main contributor to the company's top line. The
performance of new products, especially Teflaro, has also been
below expectations. However, we remain encouraged by the
company's progress with its pipeline candidates.
Pharma stocks which currently look attractive are
), which carry a Zacks Rank #1 (Strong Buy).
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