Forest Laboratories Inc. is in the midst of launching Linzess (linaclotide) for irritable bowel syndrome and Tudorza (aclidinium) for chronic obstructive pulmonary disease. Both products are off to a strong start following their December 2012 launches, management said during a fiscal fourth quarter sales and earnings call April 23.

In addition to Linzess and Tudorza, Forest has introduced a string of new products over the last five years. In 2011, the company launched Viibryd (vilazodone) for depression, Daliresp (roflumilast) for COPD and the hospital antibiotic Teflaro (ceftaroline). But combined sales of the five new entries barely made a dent in the revenues lost by Forest in 2012 from Lexapro (escitalopram). The antidepressant lost patent exclusivity on March 14, 2012, paving the way for the entry of the first generic alternatives.

With the loss of Lexapro, Forest lost more than half of its revenue and an even greater portion of its profits. Revenues for the 12 months ended March 31 decreased 31.8% to $3.1 billion, as the company made up some of the losses from new products. Forest reported a net loss of $32.1 million, compared to net income of $979.1 million the prior year.

On the positive side for investors, the company did report net income of $45.4 million for the fourth quarter, although the amount paled in comparison to the $192.7 million in the year-ago period.

The company’s failure to launch new drugs to fill the revenue gap has drawn the ire of activist investor Carl Icahn, who is the second-largest individual investor in Forest and has called for a change in leadership Also see "Carl Icahn’s Partial Victory In Battle For Forest: One Board Seat" - Pink Sheet, 15 August, 2012..

But Forest management said the seven new products it has launched since 2008 are starting to gain traction. Collectively, the products generated sales of $254.3 million in the fourth quarter, up 51.3% over the year-ago quarter. Those drugs, along with two others pending at FDA that are expected to launch in 2013 – levomilnacipran for major depressive disorder and cariprazine for the treatment of schizophrenia and acute mania associated with bipolar 1 disorder – are expected to help the company return to growth.

Tudorza Scripts Ahead Of Expectations

Tudorza Pressair is a long-acting muscarinic antagonist (LAMA) approved in July for long-term maintenance treatment of bronchospasm associated with COPD Also see "Forest Tudorza Pressair Approval For COPD Includes Post-marketing CV Safety Study" - Pink Sheet, 23 July, 2012.. It joins an increasingly crowded field for COPD treatments, including Forest’s own Daliresp (roflumilast), a PDE4 enzyme inhibitor to reduce the risk of exacerbations in patients with COPD approved in August 2011.

Forest is partnered on Tudorza with Almirall SA and the two companies are developing it in a fixed-dose combination with the long-acting beta antagonist (LABA) formoterol. The firms announced positive data from the first of two Phase III trials studying the combination April 16. Top-line results from a second Phase III trial will read out later this quarter, and the companies plan to file an NDA for the combination in early 2014.

Tudorza generated sales of $10.8 million in the fiscal fourth quarter, its first full quarter on the market. Daliresp generated sales of $23.2 million, up from $13.1 million in the year-ago fourth quarter.

Since its launch, 70,000 prescriptions have been written for Tudorza, exceeding expectations, Chief Commercial Officer Elaine Hochberg said.

“Our user base is growing, and it’s growing consistently, week to week, with strong adoption by both primary care physicians and pulmonologists,” she said. “Since launch, 14,000 physicians have used Tudorza and we’re adding approximately 700 new users each week.”

Forest expects to have 50,000 physicians using the product by the end of the year. The company is targeting 80,000 physicians through its 1,500-person sales force. As for formulary access, Tudorza is on formulary on “several major plans,” Hochberg said. The company also is offering copay assistance to patients on health plans that are not yet including it on formulary.

“This program essentially bridges the gap between today and the future when formulary coverage is more fully established across the country,” she said.

The launch of Daliresp has been slower as the company has had to educate physicians about where and how to use the drug in the treatment paradigm for COPD, according to Hochberg. The launch of Tudorza is giving Forest’s sales team an opportunity to talk to physicians about Daliresp, too.

“Since the launch of Tudorza, we have seen a slight but noticeable increase in new prescription volumes of Daliresp among [primary care physicians] and the number of hospitals purchasing Daliresp on a weekly basis,” she said.

Linzess Launch In Full Force With Patient Outreach, Sampling

Linzess is partnered with Ironwood Pharmaceuticals Inc. and is that company’s first commercial product. It was approved by Aug. 30 at a 145 mcg dose for chronic idiopathic constipation and a higher 290 mcg dose for constipation-predominant irritable bowel syndrome, a disease subtype. It was launched by Ironwood and Forest Dec. 17 Also see "Launching Linzess Into A Tough Primary Care Market" - In Vivo, 22 December, 2012..

Management and some analysts think the product could become a blockbuster brand, given the lack of treatment options for the disease. As an indication of the unmet need, approximately 50% of new patient starts for Linzess are coming from the OTC market.

But sales of the drug were just $4.5 million in the fiscal fourth quarter, below what many investors expected. Forest recorded initial trade stocking of $19.2 million for Linzess in the fiscal third quarter.

Management at both Forest and Ironwood said they expect the brand to gain traction throughout 2013. There have been more than 70,000 prescriptions written for Linzess since launch by 15,000 unique health care providers, according to Hochberg. The company expects to have 65,000 prescribers one year from now, she added. Forest and Ironwood are marketing Linzess with a joint sales force of 1,400 reps targeting 80,000 gastroenterologists and primary care physicians.

The companies have launched a direct-to-consumer marketing campaign as well, which includes mail and Internet promotions, as well as an extensive sampling campaign.

In a separate same-day conference call, Ironwood Chief Commercial Officer Thomas McCourt said the companies have distributed more than 300,000 30-day “early-experience kits” to over 30,000 gastroenterologists and high-prescribing primary care physicians. And Hochberg noted that sampling is especially important in targeting current OTC patients, given the high level of sampling used in the OTC market.

Forest is expecting substantially higher sales of both Linzess and Tudorza in fiscal 2014; it forecasts sales of $170 million coming from Linzess and of $90 million from Tudorza.

Many New Products For Forest, But Not Enough To Fill The Lexapro Gap

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