We recently took it to a buy from a market outperform in the wake of some market-related price weakness and a spectacular EPS outlook. Forest Laboratories historically has been a one-drug company, possessing the fastest growing antidepressant compound called Celexa. It competes with the big three SSRI antidepressants Prozac, Zoloft and Paxil. Celexa, however, has been delivering some very strong blows to the big three in terms of market share wins over the last 24 months. That growth in sales has driven revenues, and they ve reached enough size and critical mass on the manufacturing margin side, where the gross margins are starting to lift even more robustly than they have in the past three or four years.
Forest is clearly a unit growth and margin expansion story.
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