Forest Laboratories Shares Dive After New Acquisition



Forest Laboratories is down around 4% today after it announced its move to buy Clinical Data would weaken earnings for the next three years in a press release.

  • Forest is acquiring the Mass-based drug maker for $1.2 billion. Clinical Data shares have dropped over 8% today.
  • The company is making the bid for Clinical Data to acquire its antidepressant Viibryd, which was just approved by the FDA.
  • Forest has been on a search for an antidepressant to replace its blockbuster drug Lexapro, which accounts for 56% of the company’s sales. Lexapro loses its patent protection in 2012.
  • Forest is paying $30 per share for Clinical Data and will pay an extra $6 per share if sales of Viibryd reach certain goals.
  • David Amsellem, an analyst at Piper Jaffray, said in a research note today that he does not expect Viibryd sales to approach Lexapro numbers. Forest will be making major investments in marketing and sales for the launch of Viibryd.
  • Clinical Data reported a third-quarter loss of $5.2 million.

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