NEW YORK, July 24, 2012 /PRNewswire/ -- Carl Icahn today issued the following open letter to shareholders of Forest Laboratories, Inc.:
CARL C. ICAHN
767 Fifth Avenue, 47th Floor
New York, NY 10153
July 24, 2012
Dear Fellow Forest Labs Shareholders,
The Forest Labs Annual Meeting will take place on August 15, 2012. Today we mailed you our definitive proxy statement containing important information, including information on how to vote your Forest shares. Your vote is important as the company is at a critical juncture and our four director nominees have the necessary qualifications, experience and shareholder perspective to help fix the problems at Forest Labs.
I believe Forest Labs is in crisis. Howard Solomon was wrong in the past with his overly optimistic predictions. The company's stock price is down 11% in the past 10 years and more than 50% from its peak. Moreover, it appears to me that Forest was completely unprepared for the Lexapro patent cliff resulting in an estimated 80% decline in earnings for the upcoming fiscal year.
I am also concerned, as should you be, that Howard Solomon will be wrong again about his currently optimistic view of the company's pipeline. Forest's new pipeline drugs have missed guidance 8 out of 11 times in the past four years. Therefore, the Board's current strategy is not expected to offset lost revenues from the Lexapro patent cliff and is responsible for the 80% earnings decline in the upcoming year. Additionally, the company is again making promises that we believe they can't keep and they will not be adequately prepared for the Namenda patent cliff that will occur in 2015 which could be devastating for the company.
MOREOVER, GIVEN FOREST'S WEAK HISTORY OF CAPITAL ALLOCATION, YOU SHOULD SHARE MY CONCERN THAT THE CURRENT BOARD WILL PERMIT HOWARD SOLOMON TO RISK THE COMPANY'S
SOURCE Carl C. Icahn
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