News Wires - CNBC.com
NEW YORK - HSBC analyst Savant Ahmed lowered his price target on drug developer Forest Laboratories Inc. Wednesday, citing a lack of catalysts this year and concerns for growth after 2012.
On Tuesday, the company reported a 34 percent jump in first-quarter profit to 83 cents per share, beating Wall Street expectations. It also reaffirmed its full-year profit outlook of $3.05 to $3.15 per share.
Ahmed said the short-term boost in profit is not enough to offset future growth concerns. He lowered his price target to $50 from $58, but reaffirmed a "Neutral" rating.
"We continue to believe that the main challenge facing Forest is reinventing its sales line post-fiscal 2012, and we view the current pipeline as inadequate," he wrote in a note to investors.
After 2012, 80 percent of the company's revenue will face generic competition and the current pipeline is inadequate to prepare for it, he said. Most of the company's key clinical pipeline data updates aren't expected until at least the end of the year.
The company's key drugs include Lexapro, for depression, and Namenda, for Alzheimer's disease. Sales of the drugs totaled $552.3 million and $191.7 million, respectively, during the first quarter.
Shares of Forest fell 33 cents to $45.13 in morning trading.
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