Is Forest Laboratories, Inc. (FRX) Destined for Greatness?

Forest’s hope is that new drugs will replace lost Lexapro sales. In August, Forest and partner Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD) got FDA approval for a treatment for irritable bowel syndrome, which hits the market in December. Last month, Forest also announced that Namenda XR, a once-daily treatment for moderate to severe Alzheimer’s, has been made available throughout the United States. The company also announced positive results from a phase 3 clinical trial of the fixed dose combination of nebivolol and valsartan for hypertension. Forest also has two FDA-approved cardiovascular drugs (Bystolic and Tiazac) to treat high blood pressure, which might help turn around flagging revenue in the next few quarters.

Forest’s shares recently tacked on more gains after announcing a succession plans for current CEO Howard Solomon, who plans to retire by the end of the year. Expectations for Forest are quite low, having gotten pushed down substantially over the past few months. With the Lexapro loss last year and Namenda’s impending patent expiration in 2015 — both drugs used to account for about two-thirds of total revenue — investors certainly have plenty of reason to be skeptical and concerned about Forest’s future.

Putting the pieces together
Today, Forest has few of the qualities that make up a great stock, but no stock is truly perfect. Digging deeper can help you uncover the answers you need to make a great buy — or to stay away from a stock that’s going nowhere.

The article Is Forest Labs Destined for Greatness? originally appeared on Fool.com and is written by Alex Planes.

Fool contributor Alex Planes has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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