I believe there are 4 dimensions of a truly great company; innovation, excellence in execution, talented people and sustained shareholder return. Regarding innovation, Forest has been successful with this approach of licensing and developing new and innovative drugs to address patient need. And the company’s recent track record of 7 regulatory approvals since 2009 speaks for itself.
Now that they are approved, flawlessly executing these launches and finding new channels to reach target customer is Forest’s biggest short-term priority. The Forest team is strong, talented and committed; people are the company’s greatest strength. This company has created a lot of shareholder value over its history.
Forest’s top priority in the near term is maximizing the brand performance, including achieving further uptake of Linzess by expanding the prescriber base and taking share from competing products, including OTCs; fueling the shift from Namenda to Namenda XR; there's a lot of value to stakeholders in moving to XR, especially patients and caregivers; engaging a hand-to-hand combat to gain share in the respiratory COPD market; maximizing the Bystolic opportunity; and launching FETZIMA well in December.
Second priority is to deliver on some very important near-term pipeline opportunities, including cariprazine, which is expected late this year and the combination program. Third priority is to develop plans to reduce the company’s cost structure in a manner that does not detract from the launches in the near-term pipeline priorities.
Second quarter was strong in terms of sales levels and growth rate. Namenda XR, Forest’s recent product launch, is off to a very strong start and currently running ahead of expectation. And sales in prescription levels for the company’s two newest products, Linzess and Tudorza, continues to increase at a nice pace. Also preparations for the launch of levomilnacipran, SNRI for depression, are on schedule, and Forest looks forward to the introduction of that product.
Total revenues were $855.3 million versus $760.6 million last fiscal year. Product sales were $811.4 million versus $692 million last year. Contract revenue was $36 million and included $35 million from the Benicar agreement. Interest and other income totaled $7.8 million. Wholesale inventories decreased to just under half a week this quarter compared to last quarter with just over 2 weeks. The impact to sales is approximately $23 million.
Q2 Sales Figures for Smaller Products:
Campral, $2.9 million; Celexa, $3.1 million; Cervidil, $15.3 million; Esgic, $0.2 million; Europe, $41.3 million; generics, $7.1 million; Lexapro, $21.7 million; Lorcet, $0.7 million; Monurol, $1.6 million; thyroids, $10.1 million; and Tiazac, $0.5 million. And just for information, the Benicar third-party sales were $200.5 million for the quarter.
Earnings for the second fiscal quarter reflected solid sales in Namenda franchise and lower spending for research and development expenses. Forest now expects that non-GAAP earnings per share for the full fiscal year will be in the range of $0.95 to $1.15. The company’s guidance for the total product sales and total net revenue for the fiscal year remain unchanged in the range of $3.3 billion to $3.5 billion, respectively.
With regard to the quarterly phasing, the company expects a breakeven non-GAAP EPS to be reported in the fiscal third quarter. Product sales will be sequentially lower, impacted by elevated discount rates, largely attributable to the Medicare Part D coverage.
SG&A expense is expected to be sequentially higher due mainly to the launch of FETZIMA and timing of other marketing expenses related to the launch of products. R&D is also expected to be sequentially higher due to the timing of milestone payments in the quarter, approximately $50 million.
Revenues in the fourth fiscal quarter will be sequentially higher, reflecting continued growth of Forest’s new product launches and lower discount rates on the product sales. SG&A expense and the cost of R&D are expected to be moderately lower than the third quarter.