NEW YORK  - Shares of Forest Laboratories Inc. surged more than 15 percent on Friday a day after a U.S. court upheld a key patent for its blockbuster anti-depressant Lexapro. Analysts said Forest's victory over generic drug maker Teva Pharmaceutical Industries Ltd., wiped away a major cloud hanging over the stock.
The trial had threatened Forest's grip on Lexapro, which amounted to 63 percent of the New York-based company's nearly $3 billion in sales in its last fiscal year. Forest said the patent rights on Lexapro expire in March 2012.
"We see this as a resounding win for Forest and believe the stock should finally be able to trade more on the fundamentals of the business," Natexis Bleichroeder analyst Corey Davis said in a research note. Shares rose $5.84 to $44.24 in early trading on the New York Stock Exchange. Before Friday, they had fallen 5.6 percent this year, compared to a 0.2 percent rise for the American Stock Exchange Pharmaceutical index. Merrill Lynch analyst Gregg Gilbert said he would now closely watch prescription trends for Lexapro. Low-cost generic versions of Pfizer Inc.'s Zoloft anti-depressant are expected to launch later this month, and could erode Lexapro's market share.
Gilbert also pointed to Forest's crop of experimental medicines that are nearing the market, including nebivolol for hypertension and Orapem for bacterial infections.
"In our view, investors have ignored the progress that Forest has made over the last year or so in improving its later-stage pipeline," Gilbert wrote in a research note.