Forest Labs eyes 'earlier' assets for drug pipeline, next decade of business

With its battle for board control with billionaire Carl Icahn (photo) over (at least for this year), Forest Laboratories ($FRX) has its eyes on ensuring that its pipeline of experimental meds positions it for success, company CFO Frank Perier told Reuters.

Forest has gobbled up rights to a drug in Phase III development and treatments with new FDA approval stamps, including the antidepressant Viibryd, which was secured in the $1.2 billion buyout of developer Clinical Data early this year. Now Perier tells the news service his company is also emphasizing "earlier stage" drugs, with an eye on the health of the business in 2020.

This isn't to say the company isn't in the market for assets that could bring revenue much sooner. Even with two new launches this summer, analysts expect the drugmaker to take a significant hit to its bottom line as its top-selling antidepressant Lexapro and the Alzheimer drug Namenda lose patent protections in early 2012 and 2015, respectively, Reuters reports. And those types of holes in the business can't be quickly filled with Phase I programs. 

Forest finds itself in a similar pipeline position as Biogen Idec ($BIIB), which also has a lot of late-stage programs. However, Biogen also is lacking on the early-stage front. According to Forest's website, the company has only one Phase I program--GKI-399 in diabetes--along with 5 Phase II and 5 Phase III programs. The good news for large companies like Forest and Biogen is there are plenty of small biotechs looking for development deals, and upstarts appear very willing to take relatively small upfront sums to get a shot at big paydays on the back end of deals.

- read the Reuters' article