Forest Labs plans to buy schizophrenia drug, cut costs

(Reuters) - Forest Laboratories Inc, which is facing patent expirations on several of its biggest drugs, on Monday said it planned to buy rights to a new schizophrenia drug from Merck & Co and cut its annual operating costs by $500 million in 2016. The specialty drugmaker said it will acquire rights to the oral drug, called Saphris (asenapine), which is approved to treat acute bipolar mania, for an upfront payment of $240 million to Merck and additional payments on defined sales milestones. Saphris has been a poor seller for Merck, which earlier this year took $330 million in write-offs on the drug, due to reduced sales expectations for the product. The drug was acquired by Merck through its merger in 2009 with Schering-Plough Corp. To help finance the deal, Forest said it would issue $1 billion in new long-term debt, through an offering of eight-year senior unsecured fixed-rate notes.



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