Analyst Upgrades Forest Labs
Shares of Forest Laboratories jumped Friday before markets opened and after a Credit Suisse said the drug developer "is in the early innings of a multi-year rejuvenation story."
Dr. Vamil Divan raised his rating on the shares to "outperform" from "neutral" and ramped up his price target to $85 from $60. The analyst said in a late Thursday research note that improvements in base business and incremental growth from future business development will bode well for the company.
The New York company should return by next year to revenue and earnings levels it had reached before it lost patent protection for its long-time best seller, the antidepressant Lexapro, Divan said.
The drugmaker announced last month that it planned to trim $500 million in costs over the next two years and buy back at least $400 million in company stock.
The changes arrived less than three months after former Bausch & Lomb leader Brenton Saunders replaced longtime CEO Howard Solomon.
The drugmaker took some heat last year from activist investor Carl Icahn, who criticized management and demanded more information about plans to replace Solomon. Last June, Forest seated a board member selected by Icahn, and the investor backed the choice of Saunders as new CEO.
Last week Forest said it will spend $2.9 billion in cash to buy Aptalis, which specializes in treatments for gastrointestinal problems and cystic fibrosis.
Shares of Forest Laboratories Inc. climbed 2.6 percent, or $1.80, shortly before markets opened Friday.