Jefferies Sees No Value Destruction To Forest Laboratories

Jefferies & Company has published a research report on Forest Laboratories

as Jefferies believes that the company will experience no value destruction to shares despite its deep late-stage pipeline operations. In the report, Jefferies writes "Viibryd, CLDA's (NASDAQ: $31.21, NC) approved depression drug is an SSRI & 5HT1a partial agonist; somewhat novel dual-action MOA. We're under no illusions that Viibryd is a sole Lexapro replacement, but it's a legitimate addition to FRX's group of recently-launched or late-stage assets, which should cumulatively fill the divot. Viibryd fits FRX's M.O. of monetizing slightly differentiated, safe drugs with its considerable marketing & managed care prowess. FRX will likely promote the solid tolerability profile – particularly on sexual side effects. Like for Bystolic (FRX's successful beta-blocker), FRX will have a large share-of-voice in a mostly genericized depression market. We model market penetration far slower than historic MDD launches; even below Pristiq. We assume a 2H'11 launch, peak volume penetration of <3%, and peak sales of ~$700M." Jefferies maintains its Buy rating and $39 price target. Forest Laboratories closed yesterday at $32.18.