Forest Laboratories, Inc. (NYSE: FRX), an international pharmaceutical manufacturer and marketer, today announced that reported earnings per share equaled $0.91 in the second quarter of fiscal 2012. Reported earnings per share in the second quarter of fiscal 2011 were $1.00.
Net sales for the quarter increased 9.0% to $1,130.3 million, from $1,037.3 million in the year-ago period. Sales of Bystolic® (nebivolol), a beta-blocker for the treatment of hypertension, were $82.3 million, an increase of 29.2% over the year-ago period. Sales of Savella® (milnacipran HCl), a selective serotonin norepinephrine dual reuptake inhibitor (SNRI) for the management of fibromyalgia, recorded sales of $25.5 million, an increase of 19.1% from last year's second quarter. Teflaro® (ceftaroline fosamil), a broad-spectrum bactericidal cephalosporin for the treatment of adults with community-acquired bacterial pneumonia (CABP) and with acute bacterial skin and skin structure infection (ABSSSI), recorded sales of $5.3 million. Teflaro was launched in March 2011. The Company's newest products, Daliresp® and Viibryd® were formally launched in August. Following initial trade stocking during the quarter ended June 30, 2011, sales of Daliresp (roflumilast), a PDE4 enzyme inhibitor for the treatment to reduce the risk of exacerbations in patients with chronic obstructive pulmonary disease (COPD) recorded sales of $1.2 million and Viibryd (vilazodone HCl), an SSRI and a partial agonist at serotonergic 5-HT1A receptors for the treatment of MDD recorded sales of $5.3 million. Sales of Lexapro® (escitalopram oxalate), a selective serotonin reuptake inhibitor (SSRI) for the initial and maintenance treatment of major depressive disorder (MDD) in adults and adolescents and generalized anxiety disorder in adults were $596.1 million compared with $569.3 million in the year-ago period. Namenda® (memantine HCl), an NMDA receptor antagonist for the treatment of moderate and severe Alzheimer's disease, recorded sales of $336.8 million during the quarter, an increase of 8.6% from last year's second quarter.
Contract revenue was $33.6 million in the current quarter compared to $42.4 million last year. Benicar® (olmesartan medoxomil) co-promotion income decreased to $31.5 million, compared to $39.9 million in last year's second quarter. Per the agreement with Daiichi Sankyo, Forest's 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.
Cost of sales as a percentage of sales was 23.4% compared with 23.7% in last year's second quarter. Selling, general and administrative expense for the current quarter was $388.7 million as compared to $316.4 million in the year-ago quarter. The current level of spending reflects the resources and activities required to support our currently marketed products, particularly our newest products, Teflaro, Daliresp and Viibryd.
Research and development spending for the current quarter was $197.3 million compared with $154.5 million in last year's second quarter. The current quarter includes product development milestone charges of $30.0 million compared to $3.0 million of milestones in the prior year's quarter.
Income tax expense for the quarter was $69.3 million, reflecting a quarterly effective tax rate of 21.7%. Reported net income for the quarter ended September 30, 2011 was $249.8 million or $0.91 per share compared to $286.1 million or $1.00 per share reported for last year's second quarter.
On August 15th the Company announced that under the 2010 Share Repurchase Program approved in May 2010, it entered into an agreement with Morgan Stanley & Co. (MSCO) to repurchase $350 million of its common shares utilizing an accelerated share repurchase (ASR) transaction. Pursuant to the ASR transaction, MSCO delivered to the Company 9.7 million shares in the quarter. This current ASR transaction is in addition to the ASR transaction announced on June 3, 2011 to repurchase $500 million of its common shares under the same 2010 Share Repurchase Program. Diluted shares outstanding at September 30, 2011 were approximately 273,753,000 a reduction of approximately 13.7 million shares compared to the year-ago period due mainly to the Company's accelerated share repurchase programs.
Six Month Results
Revenues for the six months ended September 30, 2011 increased 7.7% to $2,321.0 million from $2,155.1 million in the prior year.
Net income for the six months ended September 30, 2011 increased 25.9% to $508.0 million from $403.6 million reported in the six months of the prior year. Reported diluted earnings per share increased 32.1% to $1.81 per share in the current year's six months as compared to diluted earnings per share of $1.37 per share in last year's six months.
Fiscal 2012 Guidance
The Company still expects that diluted earnings per share for the fiscal year ending March 31, 2012 will be in the range of $3.60 to $3.70.