Executives
Francis I. Perier - Chief Financial Officer, Executive Vice President of Finance & Administration and Member of Disclosure, Legal Compliance & Risk Management Committee
Frank J. Murdolo - Vice President of Investor Relations
Marco Taglietti - Senior Vice President of Research & Development, Member of Disclosure, Legal Compliance & Risk Management Committee and President of Forest Research Institute (FRI)
Elaine Hochberg - Chief Commercial Officer, Executive Vice President of Marketing and Member of Disclosure, Legal Compliance & Risk Management Committee
Analysts
Dana Yi - Morgan Stanley, Research Division
Gregory B. Gilbert - BofA Merrill Lynch, Research Division
Annabel Samimy - Stifel, Nicolaus & Co., Inc., Research Division
Aaron Gal - Sanford C. Bernstein & Co., LLC., Research Division
Mario V. Corso - Caris & Company, Inc., Research Division
Gary Nachman - Susquehanna Financial Group, LLLP, Research Division
Marc Goodman - UBS Investment Bank, Research Division
Traver A. Davis - Piper Jaffray Companies, Research Division
Irina Rivkind - Cantor Fitzgerald & Co., Research Division
Timothy Chiang - CRT Capital Group LLC, Research Division
Gregory Waterman - Goldman Sachs Group Inc., Research Division
Ann Trimble - Barclays Capital, Research Division
Corey B. Davis - Jefferies & Company, Inc., Research Division
David G. Buck - Buckingham Research Group, Inc.
Frank H. Pinkerton - SunTrust Robinson Humphrey, Inc., Research Division
Louise A. Chen - Collins Stewart LLC, Research Division
Catherine J. Arnold - Crédit Suisse AG, Research Division
Forest Laboratories (FRX) Q3 2012 Earnings Call January 17, 2012 10:00 AM ET
Operator
Good morning. My name is Angel, and I will be your conference operator today. At this time, I would like to welcome everyone to the Forest Laboratories Fiscal 2012 Third Quarter Earnings Call. [Operator Instructions] Thank you. I would now like to turn the call over to our host, Mr. Frank Murdolo, Investor Relations. Sir, you may begin your conference.
Frank J. Murdolo
Thank you, Angel, and good morning, everyone. Thank you for joining us today for this third quarter fiscal 2012 conference call. Joining me today is Elaine Hochberg, our Executive Vice President of Sales and Marketing, and Chief Commercial Officer; Frank Perier, our Executive Vice President of Finance and Administration, and Chief Financial Officer; and Marco Taglietti, our Senior Vice President, Research and Development, and President of the Forest Research Institute.
By now, each of you should have seen the earnings release that we issued around 8:00 this morning. The release is also available at our website, www.frx.com. By way of Safe Harbor statement, let me add that various remarks that we may make about future expectations, plans and prospects for the company may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and actual results may vary.
Let me now turn the call over to Elaine, who will comment on the business during the quarter.
Elaine Hochberg
Thank you, Frank, and good morning, everyone. It's my pleasure to update you on how our commercial portfolio of new and existing products is performing.
As you've heard in previous reviews, fiscal year 2012 has and definitely continues to be an important year for laying the foundation of Forest's future growth. It's a year in which Forest actively promoted, for the very first time, 6 products representing 4 therapeutic categories -- CNS, cardiovascular, respiratory and anti-infective -- to a wider range of healthcare practitioners, both PCPs and multiple specialists, and a wider array of venues, that now include hospitals, than ever before. 3 of the 6 products, Teflaro, Viibryd and Daliresp, were first made available for sale in calendar year 2011. And 2 of those 3, Viibryd and Daliresp, were fully launched simultaneously by our recently expanded field force in August.
Consequently, the third quarter performance of these products will reflect just 4 months of full promotional activity. As Lexapro finishes its last full quarter before going generic at the end of quarter 4 fiscal year '12, it is important to note that our current promotional portfolio, which is a diversified mix of products, will continue to be the basis for our growth for the next several years.
For more than a decade, Forest has executed against launches that methodically build broad user bases of primary care and specialists to enhance familiarity, trial and utilization of our products for the treatment of patients. It's therefore particularly gratifying to note that in the early part of the launches of our newest products, we are experiencing good penetration of specialists such as psychiatrists and pulmonologists, as well as primary care physicians. Also in the hospital area, a new selling environment for us, uptake is occurring in a healthy mix of teaching, large systems and community-based hospitals.
I'll now address each of the 6 promoted products and Lexapro. Starting with Lexapro, a brand for which we have modified our sales effort many quarters ago, sales were $593 million, an increase of 1.1% for the quarter versus the same quarter a year ago. Sales therefore were predominantly preserved as price changes offset modest share change.
Namenda is and remains an important product for Forest. Sales for Namenda were $340.4 million in the quarter, with growth of 6.4% year-on-year. Alzheimer's disease is the scourge of an aging population and incidence is expected to increase substantially by the mid- to late 2020s. With a compound annual growth rate of approximately 23% since its launch in January 2004, Namenda should continue to be a growth product for Forest as we continue to support it. Furthermore, the launch of an XR product that has a higher dose, a once-a-day formulation and also has been studied in combination with all acetylcholinesterase inhibitors should propel future growth for this important product. We anticipate launching Namenda XR by early 2013.
Bystolic is another study of sustained growth for Forest and is a good example of how we build products over time to their full potential. Sales in the quarter for Bystolic were $90.6 million, representing growth of 33% year-over-year compared to sales of $68.1 million for the same quarter last year. At nearly 4 years post-launch, Bystolic's NRx volume has surpassed many antihypertensive agents when looking at launch-aligned new Rx volumes. Moreover, TRx launch-aligned volume is in line with Benicar, a first-line AR.
A recent analysis that we undertook of the more than 50 products launched to primary care physicians within the last 6 years revealed that Bystolic ranks among the top 10 of those products that steadily grew over the course of several years. In fact, Bystolic's prescription volume performance mimics that of Prilosec. It's gratifying to note that though Bystolic achieved a 4% share among specialists several months ago, recent weekly national share among all prescribers has now also topped 4%.
We believe this performance is generated from the broad user base of greater than 220,000 prescribers that we have built over the last 4 years. We also believe it's due to the satisfaction those prescribers have with Bystolic, as evidenced by the fact that 98% of using physicians are repeat prescribers. Strong clinical profiling of Bystolic that's been generated through an active Phase IV program has helped our field force elucidate Bystolic's blood-pressure-lowering effects and tolerability profile. In total, these data demonstrate that Bystolic, when used early and often in a wide array of hypertensive patients, can fill a need for doctors and the more than 1.4 million patients who have tried Bystolic to date.
Interestingly, younger patients comprise a higher percentage of Bystolic's patient base than they do for other beta-blockers and other antihypertensive agents in general. 56% of Bystolic patients are younger than 65, compared to 46% for other beta-blockers and 51% for the general antihypertensive market. Recent FDA label changes for the beta-blocker class that links blood pressure lowering to cardiovascular benefit should encourage doctors and patients to pursue target blood pressure levels and in turn, should foment a climate of growth for products like Bystolic.
Finally, managed care access for Bystolic remains favorable. Bystolic has coverage for 85% of total beta-blocker lives without any step edit or prior authorization restrictions.
We launched Savella in April 2009. And sales in the current quarter were $26.3 million, growth of 6.9% year-over-year compared to sales of $24.6 million last year. Overall, the fibromyalgia market has grown more modestly than anticipated and has proven itself to be a more specialty-driven market than a broad-based PCP category. Savella is the third of 3 fibromyalgia indicated products and the sole product to have only one indication. Nevertheless, Forest's entry into the category helped to drive up the prescriber universe, up from almost 60,000 prescribers when the product launched to over 100,000 prescribers today.
The increased user base helped the category grow. Growth in the last quarter was 12%, and Savella's November TRx share was 7.5% of the fibromyalgia market. Rheumatologists are an important source of prescribing for this category. Savella was able to garner prescription share with the specialty that beat order of entry and rivals the other 2 approved products in the category.
Acceptance of Savella is evidenced in the fact that over 100,000 physicians have prescribed Savella to date, and that repeat prescribers continues to account for over 95% of Savella's weekly prescriber base. Over 90% of Savella's business is coming from continuing patients. The remainder is primarily generated by new patients from add-on therapy and switches. In total, over 85% of Savella-treated patients are on polytherapy for their fibromyalgia, which is similar to the current experience of Cymbalta and Lyrica.
We maintain 3 years post-launch managed-care unrestricted access of approximately 80% of lives in either Tier 2 or Tier 3 in commercial and Medicare plans.
A year ago, Teflaro was launched into a new selling environment for Forest, hospitals. With a newly formed hospital sales force of almost 235 representatives, Forest introduced this 2-indication cephalosporin to fight complicated skin and skin-structure infections and community-acquired bacterial pneumonia. Despite our newness as a company within the hospital environment, the recognition of the quality of our sales efforts and of Teflaro is continuing to advance. Teflaro is proving to be a steady climber and is gaining penetration, first in skin, an obvious source of opportunity given its effectiveness against MRSA; and now as we enter the height of the respiratory season, NCAP as well.
Sales with Teflaro in the quarter were $6.5 million. Since product availability last January and a full promotional launch last March, Teflaro has generated almost 200,000 days of therapy. In quarter 3, days of therapy increased 40% over quarter 2 to reach 63,000 in the quarter. Teflaro has a strong user base of over 2,500 purchasing hospitals, approximately a 24% increase over the number of hospitals at the end of September, exceeding the past U.S. antibiotic product launches of CUBICIN, Vibativ and Doribax, and behind those of Zyvox and Tygacil.
The number of repeat accounts is also climbing. Quarter-over-quarter, we've seen an increase of 15% in total accounts purchasing Teflaro. 75% of hospitals have purchased Teflaro multiple times. From launch to date, approximately 1,400 target hospitals have added Teflaro to formulary, and 549 hospitals have unrestricted access, which is a 23% increase versus the number of hospitals at the end of September. Our hospital sales representatives continue to make inroads in this new selling environment. We have seen a steady increase in the number of specialists reached per visit quarter-over-quarter, and we anticipate even further growth and penetration in the coming months.
Teflaro was used as first-line therapy in 24% of CAP visits and 44% of skin infection visits. While the majority of Teflaro visits to date have ABSSSI diagnosis, CAP diagnosis should increase as we enter the height of the respiratory season, which runs 30% higher in the first quarter of the year. Also, you'll recall that CMS added Teflaro to the specifications manual for national hospital inpatient quality measures -- core measures as a recommended initial antibiotic for CAP. The addition of Teflaro applies to hospital discharges on and after January 1, 2012. This is very encouraging. It's a very encouraging endorsement and should increase the use of Teflaro as a first-line therapy for CAP right as the season is in full swing.
Although Forest is focused on our important U.S. launch, our products have potential global revenue. Our out-licensing partner, AstraZeneca, continues its progress developing ceftaroline for many x U.S. markets. Keep in mind that Teflaro competes in a very large market with approximately 23 million annual therapy days each for community acquired pneumonia and skin infection. Valued at brand prices, that's worth nearly $4 billion. The WAC price for Teflaro is $82 per day of therapy.
Our newest launches in 2011 are Daliresp for COPD and Viibryd for depression. In June, we began shipping the products and in August, we held our simultaneous promotional launches. By September, we began our medical education programs for physicians and initiated use of the new marketing materials for both products. To support these 2 important product launches, as well as our actively marketed products as previously reported, we expanded our field sales organization by about 300 sales representatives. Over 1,200 representatives are promoting each product.
Let's turn to Daliresp. Our story here is progress and an educational push for this new first-in-line agent. The FDA approved Daliresp last February as a treatment to reduce the risk of COPD exacerbations in patients with severe COPD associated with chronic bronchitis and a history of exacerbation. Sales for the quarter were $8.4 million and total prescription volume more than doubled over the previous quarter. With an introductory wholesale acquisition cost of $5.75 per day, Daliresp is participating in a COPD market that is currently valued at approximately $5.5 billion, with over 26 million prescriptions written annually. Based on Daliresp's indication for severe COPD patients, we will have access to about half of the high-volume portion of therapy, which spans the moderate to severe patient population.
We are pleased with the early prescription data and trends for Daliresp. As the week ended -- as of the week ended December 30, there have been approximately 70,000 prescriptions written. Over 12,000 physicians have already tried Daliresp, with approximately 56% using it more than once. Since launch, primary care physicians and other healthcare providers have written approximately 78% of scrips and specialists around 22%, which is in line with expectations. Our sales force has reached 84% of physicians, and we expect to reach the balance of our audience by the end of the fiscal year.
Physicians' interest in Daliresp is very high, with awareness of the product well above 80% to 90%. Feedback from pulmonologists and PCPs is positive as seen by the fact that most prescribers have written more than once. Likelihood to prescribe remains high for both PCPs and pulmonologists. We continue to focus on educating these physicians about how Daliresp works and explaining where, when and how Daliresp should be used to reduce the risk of exacerbations in patients with severe COPD. In fact, our education efforts on behalf of Daliresp are akin to what our extensive education efforts were for Namenda when we launched that product. It also included disease-state understanding, appropriate patient identification and product-specific knowledge.
The support and advocacy of pulmonologists is a key need in this category. And early signs of adoption by this group are encouraging, with new prescription share among specialists exceeding national share and reaching almost 2% just 4 months from promotional launch. Going forward, we will also reach pulmonologists in the hospital setting. More than 500 hospitals to date have used Daliresp. In response to this expressed need and in view of the fact that 1/4 of severe COPD patients with exacerbations are admitted to hospitals, we will initiate hospital coverage in our fiscal fourth quarter by our hospital field force, and this will significantly increase our promotional efforts with pulmonologists.
We expect prescription volume to increase as physicians continue to gain more experience with Daliresp and understand when, where and how to use this novel compound alongside Spiriva, Advair and other COPD products. Use with other COPD products currently accounts for over 75% of Daliresp use today.
Managed care plans are currently evaluating Daliresp for formulary placement, and we've already made some important wins. New managed care wins in quarter 3 include Caremark Part D, including member health; ESI, commercial and Part D; Harvard Pilgrim, commercial; and Select health, commercial. Combined commercial and Part D, Tier 3 -- Tier 2 and Tier 3 unrestricted access was approximately 64%. Formulary access is building, and we expect wins at many large strategic accounts in the upcoming quarter. Our target for unrestricted formulary access is over 80% by the end of the first year on the market.
Turning to Viibryd. With sales for the quarter of $18.9 million, Viibryd is off to a strong start. Viibryd's wholesale acquisition cost is $3.95 per day. Prescriptions in the third quarter grew 2.5x over the second quarter. The most positive signal of physician acceptance of Viibryd to date comes from a recent survey of prescribers in which those surveyed reported that more than 50% of all Viibryd use has been for first line, 29%; for second line, 26% use.
Our 30 million patients -- over 30 million patients are taking antidepressants in the U.S. Patients need a first-line antidepressant that offers efficacy that can help them recover, as well as an acceptable side effect profile. Furthermore, roughly 50% of patients need an alternative antidepressant, primarily due to lack of efficacy of the previous agent or secondarily due to side effects. In either situation, Viibryd can be that option. Its mechanism of action is different from other antidepressants. Viibryd is the first and only approved SSRI and 5HT1A receptor partial agonist.
As discussed in our quarter 2 call, physicians continue to describe the effect of the drug observed in the clinical trials as meaningful, consistent across multiple depression rating scales and similar to other SSRIs, with a tolerability profile that's favorable. And we're hearing very positive experiences from doctors and patients who've tried the drug so far. As of the week ended December 30, there have been nearly 210,000 prescriptions written by almost 29,000 prescribers, and approximately 60% are repeat writers. Since launch, about 25% of scrips have been written by psychiatrists and approximately 75% by primary care physicians and other healthcare providers. We're very pleased with the response to this product by not only specialists but also primary care physicians.
We're continuing to sample physician offices based on demand for new patient starts. Our managed care access goal for unrestricted formulary access is 65% by the end of year one on the market, and we are on track to meet that goal. Currently, 6 months into the launch, approximately 50% of lives are covered unrestricted Tier 2 or Tier 3 when combining commercial and Medicare Part D, including many of the large national plans.
We anticipate a lot of activity and formulary additions on national and regional plans beginning in January and throughout early 2012, as this is the time when most plans look at formulary changes for the upcoming calendar year. New managed care wins include Medco, commercial and Part D; CVS Caremark, commercial and Part D; MemberHealth [ph], part D; Express Scripts, commercial and Part D; and LifeWise [ph], commercial and Part D.
So third quarter fiscal '12 was an important period in which we initiated full promotion of our 2 newest products, Viibryd and Daliresp; while supporting a diverse line of 4 other in-line products including Teflaro, our entrance into a totally new environment, the hospitals, just 2 quarters prior. Overall, we are pleased with the strong performance of our promoted products with physicians; within managed care; and most of all, with patients.
Let me turn over the call to Frank Perier for an update on the financial results.
Francis I. Perier
Thank you, Elaine, and good morning, everyone. Total revenues for the fiscal third quarter, which include product sales, pretax earnings from Benicar, interest and other income, totaled approximately $1.2 billion, an increase of 7.4% from last fiscal year. Fiscal third quarter revenues were comprised of approximately $1.2 billion of product sales versus $1.1 billion last year, representing growth of 9.2%; $34.1 million of contract revenue, primarily from the Benicar agreement; as well as $3.3 million of interest income and $10.6 million of other income. Wholesale inventories are at normal levels of about 2.5 weeks at the end of the quarter.
Gross margin in the quarter came in at 77.4% compared to 76.6% in last year's third fiscal quarter. SG&A spending during the quarter was $396.1 million, up 38.6% from $285.7 million in last year's third quarter. The current level of spending reflects the resources and activities required to support our currently marketed products, particularly our newest products, Teflaro, Daliresp and Viibryd, as Elaine has just described.
Research and development spending for the quarter was $191 million as compared to $200.8 million reported in the third quarter last year. Last year's third fiscal quarter included an upfront license payment of $66.1 million to Grünenthal for GRT 6005 and GRT 6006 for the treatment of moderate to severe chronic pain. Excluding this payment, R&D spending for the current quarter increased 42%. The current quarter includes product development milestone charges of $24.6 million compared with $4.2 million in milestone payments last year. Research and development spending is primarily in support of the -- of an expanded late stage development program spread over multiple pipeline products.
With regard to the full year fiscal 2012 guidance, the company now expects fully diluted earnings per share to be in the range of $3.65 to $3.75. The company's reported effective tax rate in the quarter was 22.5%. The annual effective tax rate, excluding all onetime items, is expected to be 22.2%.
In May 2010, the Board of Directors approved a share repurchase program of up to 50 million shares of the company's common stock. There were no shares repurchased during the current quarter. We have 17.3 million shares remaining under our 2010 share repurchase authorization. Actual shares outstanding as of December 31 were approximately 265,490,000, a decrease of 20.6 million shares from last year.
Our cash and marketable securities balance as of December 31 was approximately $3.2 billion, an increase of $280 million from last quarter. Of the total $3.2 billion, approximately $450 million or 14% of our cash and marketable securities is domiciled domestically, with the remainder maintained by our international subsidiaries.
With regard to our use of cash, we have judiciously managed our cash resources to facilitate growth of the business and return of capital to shareholders. Since 2004, we have repurchased $4.7 billion worth of stock, including the 3 ASR programs. In addition, since 2007, we completed the acquisitions of Cerexa, Novexel, the Grünenthal European colistin business and Clinical Data for a cumulative total of $2.1 billion and invested an additional $700 million in initial new product license payments over the same period for a total of $2.8 billion invested in business development.
I'll now turn the call over to Marco for an update on the progress in our pipeline.
Marco Taglietti
Thank you, Frank. Good morning, everyone. Here in the Forest R&D organization, we are going through exciting times as we move the development of all the products of our pipeline forward. As we move into the first half of the calendar year 2012, we will be reporting several pivotal Phase III studies for levomilnacipran in MDD and for cariprazine in acute bipolar mania and schizophrenia. These pivotal studies would be the basis for the NDAs of these 2 products, which would be submitted in the second half of 2012. We also have 2 PDUFA dates coming up during the second quarter of the calendar year 2012, one for aclidinium and the other for linaclotide.
Let's start with a review of our CNS pipeline. In October, we and our partner, Gedeon Richter, announced the preliminary top line result of the first one of this series of studies, with positive result of the first Phase III study for cariprazine in patients with acute mania associated with bipolar I disorder. The data showed that cariprazine-treated patients with acute manic episodes experienced significant symptoms improvement compared to placebo-treated patients seen as early as day 4 of treatment, which was the first study time point, and at each subsequent time point study. We expect to report top line results from the second acute mania program in both schizophrenia studies later this quarter. Cariprazine is also under development in Phase II studies for bipolar depression and as an adjunct treatment in MDD.
We have a development collaboration with Pierre Fabre for F2695, also known as levomilnacipran, a once daily, selective serotonin and norepinephrine reuptake inhibitor for the treatment of depression. Development of levomilnacipran is on track. We initiated Phase III clinical trials during the summer of 2009 and reported top line results for the first Phase III clinical study last January. The primary endpoint in this first study was the Montgomery-Asberg Depression Rating Scale models, clinician rated. Also, the overall difference observed between the drug-treated and placebo-treated patients was not statistically significant in this first study. Levomilnacipran consistently demonstrated improvement relative to placebo over the course of the trial.
In July, however, we reported the outcome of the second Phase III trial, which showed positive result, both statistically and clinically significant. Analysis of the preliminary top line data indicate a statistically significant improvement was achieved for levomilnacipran-treated patients for all dose groups compared to placebo on the primary efficacy endpoint, which was changed from baseline to end of week 8 in the MADRS clinician-rated total score.
The result of this second trial are actually consistent with the previous findings in a 563-patient Phase II study of levomilnacipran, which demonstrated statistically significant improvement compared to placebo on the primary endpoint, which was changed from the baseline in total score of the MADRS. 2 additional placebo-controlled Phase III trials are ongoing, and we expect the result to become available for one of them later this quarter and the other in the next quarter.
Now let's turn to our anti-infective pipeline. With Teflaro approved and launched, our focus is now moving to the combination with avibactam, formerly known as NXL104. Avibactam is a new broad spectrum beta-lactamase inhibitor. It inhibits several classes of these bacterial enzymes called beta-lactamases that break down and inactivate beta-lactam antibiotics such as cephalosporins, penicillins and carbapenems, making the pathogens that produce these enzymes resistant to these antibiotics. Avibactam covers a broad range of beta-lactamases, including extended spectrum beta-lactamases, so-called ESBL. No other beta-lactamase inhibitor currently available on the market does that. Avibactam is perhaps one of the broadest beta-lactamase inhibitors now in development in clinical trials. We are combining avibactam with ceftaroline and with ceftazidime to enhance the spectrum of activity and counteract the resistance, especially in Gram-negative pathogens, which are becoming a major unmet medical need in both established and emerging markets.
Our anti-infective product portfolio now addresses practically the entire spectrum of clinical relevant bacterial pathogens by covering both Gram-positive pathogen with ceftaroline and ceftaroline/avibactam, and Gram-negative pathogen with ceftazidime/avibactam.
In May, results were presented from 2 Phase II clinical trials for ceftazidime/avibactam in patients with complicated intra-abdominal infections and complicated urinary tract infections during the European Congress of Clinical Microbiology and Infectious Diseases held in Milan. Results from the 2 studies met the primary endpoint, demonstrating that ceftazidime/avibactam achieved high clinical cure rate and was well tolerated in patients with complicated intra-abdominal infection and complicated UTI.
Ceftazidime/avibactam combines a broad spectrum cephalosporin and a novel beta-lactamase inhibitor for potential use as a first-line treatment for hospital-acquired Gram-negative bacterial infection, including those caused by Pseudomonas aeruginosa and extended spectrum beta-lactamase producing organism. Development of ceftazidime/avibactam is a joint collaboration between Forest Laboratories and AstraZeneca.
In December, we initiated a clinical study with approximately 1,100 patients in the U.S. for the treatment of complicated intra-abdominal infections. In the coming months, the program will include a U.S. Phase III clinical study of approximately 950 patients for complicated urinary tract infection.
Moving now to linaclotide. We and our partner, Ironwood Pharmaceuticals, submitted to FDA in August the NDA for linaclotide for the treatment of IBS-C and chronic constipation, based upon efficacy and safety results from a Phase III program comprising 4 double-blind placebo-controlled trials and 2 open-label long-term safety studies. The PDUFA action date is expected to occur in June 2012. A total of more than 2,800 patients received a once-daily dose of either linaclotide or placebo across the 4 placebo-controlled trials, 2 trials in patients with IBS-C and 2 trials in patients with CC. Additionally, over 3,200 patients have enrolled into ongoing open-label safety trials, and more than 2,000 of those patients have received linaclotide for at least 12 months.
Updating our respiratory pipeline. In June, we submitted to the FDA the NDA for aclidinium for the treatment of COPD. The filing is based on 2 positive Phase III clinical studies that investigated the twice-daily administration of aclidinium, the ACCORD I COPD study that was completed in early 2010 and the ATTAIN study that was completed by our partner, Almirall, this past January. Here, again, with a standard 10 months to review time line, the PDUFA target action date is expected to occur in April 2012.
We view aclidinium as part of a broader respiratory franchise opportunity, which includes aclidinium as monotherapy; aclidinium as a fixed-dose combination with formoterol; the inhaled long-acting beta-2 agonist, LAS 100977; and Daliresp. With regard to the fixed-dose combination of aclidinium and formoterol, we reported 2 Phase IIb dose ranging studies comparing different fixed-dose combination of aclidinium and formoterol to aclidinium alone, formoterol alone and placebo, administered DAD [ph] in patients with moderate to severe COPD. The Phase III studies with the fixed-dose combination began in September 2011, and we anticipate top line results from the trials to report out during the first half of the calendar year 2013.
We are also working with Almirall to develop, market and distribute 977 [LAS 100977] in the United States. 977 is a very potent inhaled, once-daily, long-acting beta 2-agonist. We, along with Almirall, plan to develop it in combination with an undisclosed corticosteroid for the dual indication of both asthma and COPD. To further enhance the value of this respiratory franchise, we have access to a unique dry powder inhaler delivery device developed by Almirall. This device is convenient to use for patients and easy to develop for higher or more frequent dosages, as well for various combination agent. We believe this DPI device will add to the competitiveness of our respiratory franchise.
Also in respiratory, we are supporting the launch of Daliresp, and we are planning additional post-marketing studies for Daliresp to meet FDA's post-approval requirement and to further characterize the profile of Daliresp in the approved indication.
April of last year, we announced a licensing agreement for cardiovascular product, azimilide, which is a class III antiarrhythmic agent. It was originally developed by Procter & Gamble and has been studied in over 5,300 patients to investigate its potential as an antiarrhythmic agent. Based on its mechanism of action and results of clinical trials, azimilide was determined to be best suited for use in patients with a history of life-threatening ventricular arrhythmias and who have an implantable cardiovascular defibrillator.
In 2006, following submission of data from the SHIELD 1 Phase III clinical study, the FDA under its then operable review practices issued an Approvable Letter requesting an additional clinical trial for azimilide. In 2010, the FDA agreed to one additional Phase III study to support the regulatory submission for azimilide in the U.S. The SHIELD 2 study was initiated by Forest in September and is being conducted under the blessing of a special protocol assessment with the FDA.
Also in the cardiovascular area, our transaction with Clinical Data brings to Forest apadenoson, a potent agonist of the adenosine A2A receptor subtype, with improved selectivity for this receptor over other subtypes. Apadenoson is a coronary vasodilator in Phase III development as a pharmacologic stress agent for radionuclide myocardial perfusion. ASPECT-1 and ASPECT-2 are non-inferiority studies comparing apadenoson to Adenoscan, and the primary endpoint is image concordance. Enrollment is ongoing for ASPECT-1 study. And in June, we began enrollment for ASPECT-2.
Our R&D development pipeline also includes 2 earlier-stage programs. In June 2010, we partnered with TransTech Pharma to license TTP399, a functionally liver-selective glucokinase activator, for the treatment of Type II diabetes. Early Phase I testing suggests that pharmacological enhancement of glucokinase activity may lower blood glucose in diabetic patients.
Finally, in December 2010, we licensed GRT 6005 from Grünenthal. GRT 6005 and the compound GRT 6006 are novel first-in-class analgesics, with potent activity on opioid receptor like -1 and on the new [ph] opioid receptor for the treatment of moderate to severe chronic pain. GRT 6005 has completed proof-of-concept studies in nociceptive pain, and further Phase II studies are planned prior to initiation of the Phase III studies.
This is all with regard to our development pipeline. Frank, I'm now turning the call back to you.
Francis I. Perier
Thank you, Marco. So just to recap, we have 5 new drugs that we are actively marketing: Bystolic, Savella, Teflaro, Daliresp and Viibryd. And when you include Namenda, it's the first time that Forest has promoted 6 products representing 4 therapeutic categories -- CNS, cardiovascular, respiratory and anti-infective -- to a wider range of healthcare practitioners, both PCPs and multiple specialists in a wider array of venues that now includes hospitals. You heard Marco speak about the 2 NDAs, aclidinium and linaclotide, that were filed this past summer and the potential for 2 additional NDAs to be filed later this year for levomilnacipran and cariprazine. Collectively, our next 9 group of products.
And the company has 6 additional products in Phase II or later that are expected to mature in 2014 and beyond. We believe that the next 9 are collectively sufficient over time to replace the revenues lost due to the patent expiries of both Lexapro in this fiscal year and Namenda in 2015 and to provide growth. Forest's track record of developing new products is one of the strongest in the industry. Over the last 10 years, Forest has received 7 novel drug approvals, including 4 in the last 5 years, outpacing not only its specialty pharmaceutical peers, but also some of the world's largest global pharmaceutical companies.
Our business development team continues to see interesting and commercially attractive products in the market, and we have clearly demonstrated the ability to compete effectively to secure such important new products, either through product licenses or direct acquisition. Our first priority remains to provide for the future growth of the company's sales and earnings beyond fiscal 2012 and '13. In addition to advancing our current pipeline and supporting our existing and future in-line products, we are also actively pursuing new product licenses and assessing potential acquisitions to add to our development pipeline and in-line products.
We have made significant progress in creating a robust pipeline that has already delivered significant value and has the potential to deliver even greater value, both in the near and long term, with patent protection extending through 2020 and beyond. These additions have the potential to feed our existing therapeutic areas, as well as allow us to enter into new therapeutic areas consistent with our business model. This combined effort will continue to drive our decision-making and allocation of resources as we look forward into the next decade.
Over the past few years, our dialogue with the investment community has been about building our R&D pipeline. Going forward, as we continue to achieve success with our pipeline and launch these new products, you will hear more about the execution of our commercialization strategies. We remain confident in our ability to launch additional new products in parallel with advancing our established pipeline.
Frank J. Murdolo
Thank you, Frank. I will now read third quarter sales figures for some of our smaller products: Campral, $5.0 million; Celexa, $3.5 million; Cervidil, $13.4 million; Esgic, $0.6 million; Europe, $34.3 million; generics, $6.6 million; Lorcet, $1.0 million; Monurol, $0.6 million; thyroid, $11.1 million; Tiazac, $0.7 million. And just for information, the Benicar third-party sales third-party sales were $214.6 million.
Operator, we'll start the Q&A session in just a moment, please.
Operator
[Operator Instructions]
Frank J. Murdolo
Okay, operator, thank you. We're ready to begin the Q&A.
Question-and-Answer Session
Operator
And your first question comes from the line of Greg Gilbert from Bank of America.
Gregory B. Gilbert - BofA Merrill Lynch, Research Division
I'll ask to -- first, I think it's for Elaine. The company has been suggesting a relatively modest switch of the immediate-release Namenda form to the XR product before the patent expires on the base compound. So is that still the case or there are other things that could lead to a more complete switch? And my second question is a broader question for Frank and others. If you were to make a significant acquisition going forward, say, to the tune of $1 billion or several billions, what would it have to achieve in your minds in order to be a better use of cash than buying your shares, given that you already believe you have products in-house that can create a growth off of your past earnings power in some future year?
Elaine Hochberg
Greg, good morning. We believe that Namenda XR has a very nice profile. It has a higher dose. It's once a day. And of course, the drug has been studied against full acetylcholinesterase inhibitors versus Namenda, which was only studied against Aricept. I think our expectations follow the models of many drugs in the marketplace, which range anywhere from 20% to 30% to 40% depending on market uptick.
Francis I. Perier
Yes, Greg. And as we continue to look at acquisition opportunities in that range, we're always looking. We are looking for opportunities that can add significant incremental value to the overall earnings potential of the business. Again, acquisitions that come with some marketed products or high-potential, ready-to-launch products like Clinical Data are certainly products that we think fit right into our sweet spot and that can add incremental long-term earnings growth and long-term value to the organization. That's really what we're looking for.
Gregory B. Gilbert - BofA Merrill Lynch, Research Division
So in your mind, CLDA so far has been a better use of capital than share buyback, for example.
Francis I. Perier
Absolutely. I think that as you look at already the launch experience that we have with Clinical Data that, that was a fairly smart investment.
Operator
And your next question comes from the line of Louise Chen from Collins Stewart.
Louise A. Chen - Collins Stewart LLC, Research Division
First question I had was we've gotten a lot of questions regarding your trough EPS guidance of not below $1.20. Is that still intact? And then if that is the case, what do you think we're missing in our modeling since it appears that to get to that guidance, either SG&A needs to be lower or sales of new product launches need to increase a lot more in the next couple of quarters?
Francis I. Perier
Louise, I think the fact that we haven't provided any update on fiscal '13 $1.20 speaks for the fact that we continue to believe that we can achieve fiscal '13 $1.20. Now we are in the throes right now of putting the detailed budgets and plans together for fiscal '13 and -- but as we go into the budget cycle, it still looks like it's certainly a very achievable number. And it's just a matter of fine-tuning both our sales outlook and sales forecast and the investments that we intend to make. And I think you can be assured that we will invest appropriately behind all of our launch products, both what we have in the market today as well as what we expect to launch, as well as continuing to advance our R&D pipeline. So we do intend to strike the appropriate balance between the future growth of the organization and the current spending level. And I will predicate all that on, this is all based upon what we have in-house today. If something major changes, we would have to reevaluate where we are. But based on what we have in-house today, we think it's still an achievable number.
Louise A. Chen - Collins Stewart LLC, Research Division
And then my second question is just on your SG&A. The fiscal third quarter, I think you mentioned that's a good run rate to use going forward. I just want to make sure if that's correct. And then, how should we think of SG&A spend if linaclotide is approved and launched?
Francis I. Perier
Well, I think we're on track to achieve what we've guided to SG&A for the full year. There's only one quarter left, so I think that kind of speaks for itself. And we're not really giving any additional guidance on SG&A spend. I think we had guided to -- we certainly expected SG&A spend to increase in fiscal '13 based upon the 2 pending NDAs that we have sitting with the FDA.
Operator
Your next question comes from the line of Marc Goodman from UBS.
Marc Goodman - UBS Investment Bank, Research Division
First question is on Teflaro. Can you give us the breakdown of usage for skin versus the pneumonia? Second question on Viibryd. Can you tell us, with all the rebates and discounts going on, is the pricing similar to Lexapro, less than Lexapro? Just give us a sense of how it is relative to Lexapro, apples-to-apples, given everything -- all the rebates and everything.
Francis I. Perier
Sure, Marc. Yes, with the breakdown of the skin indications, complicated skin and skin structure infections versus community-acquired bacterial pneumonia and the utilization that we're seeing in the market right now, it's about a 70/30 split, where we've got about 70% of the business is weighted towards skin and 30% is weighted towards pneumonia. So -- and again, what we're targeting -- what we're really targeting is to be really successful, we need to get to more of a 50/50 split on that -- on the utilization. The skin indication has been a pretty easy and logical use for the product, particularly with the MRSA indication. But in pneumonia, you're still fighting a legacy of Rocephin that's out in the marketplace. However, what we have seen is that pulmonologists and respiratory doctors who have used Teflaro for a pneumonia infection are very, very satisfied with the product, and we have seen many of them moving at the first line. And also, keep in mind, that we're right in the throes of the beginnings of the cold and flu season. So again, we're focused on increasing that, as I think as Elaine focused on in her comments, increasing that utilization in pneumonia.
Marc Goodman - UBS Investment Bank, Research Division
Do you have anything to add, Elaine?
Elaine Hochberg
The market, in my perspective, is behaving very rationally, very logically. As Frank noted, skin is the obvious play space on MRSA for doctors to try. Institutionally, respiratory tend to take a bit longer. The season is here, CMS core measures is here. We do believe that as we get to the end of this cold season, you'll begin to see our growth in CAP bring us more towards the balance that Frank has discussed.
Marco Taglietti
So given the excellent results that we have incurred, which is very strong results showing that actually our activity is certainly comparable to [indiscernible] and in some cases, there are sometimes strains that's usually growing concern about MRSA infection. Also in CAP I think it a little bit -- it creates certainly good prospect for the drug to continue to grow in CAP.
Francis I. Perier
And then turning to the question about Viibryd and the discounts on Viibryd, I think as Elaine has described in her remarks, we're already making very good formulary access and coverage for both Daliresp and Viibryd. And I think the way to think about the discounts that we're -- and the rebates that are encompassed in those agreements, it's very similar to Lexapro. There's been no big increase in discounts in order to get the formulary access that we'd like to have.
Marc Goodman - UBS Investment Bank, Research Division
And just one other thing, in that minimal of $1.20 for fiscal '13, you had mentioned before up 5% to 6% for both R&D and SG&A. That still holds in your comments?
Francis I. Perier
Yes, I mean, we had said that, I guess, last April when we gave the guidance, that we were going to be kind of in the 5% growth range for SG&A expenses and R&D expenses. Thus far, that still appears to be on track. As I said, we're in the midst of our detailed budgeting process right now. But I think we're -- it's certainly within reach.
Operator
And your next question comes from the line of David Buck from Buckingham Research.
David G. Buck - Buckingham Research Group, Inc.
Just on Daliresp and Viibryd, maybe for Elaine. Can you talk a little bit about how sampling has impacted the numbers, particularly in the December quarter, and what your expectation would be for levels of perhaps some tailing off of sampling and, specifically for Daliresp, some transfer over to prescription share -- prescription growth?
Elaine Hochberg
Yes, I'd never addressed you before directly, so it's nice to do so. And it probably is nice to explain just very quickly our philosophy about sampling. It is not untoward in any category that we've entered, that in first year, we could sample probably as much as we actually sell, sometimes 2x as much depending the development of the category. It's not been my experience, in all the years that I've been here, that we dramatically taper samples because as we first sample and create trials, we create demand for new patients and that continues to move. Several years later, we will actually see significant production by those additions that we heavily sampled in the early period. It is our experience in the first year that we will continue to see demand for our drugs to be sampled as new patients start -- continue to grow. Our promotional efforts will hopefully aid and abet that.
David G. Buck - Buckingham Research Group, Inc.
And just in terms of sampling versus overall sales, can you give -- you mentioned some years it may be as much as actual sales whereas, say, Daliresp in terms of your sampling activity versus what you're booking in terms of prescriptions.
Elaine Hochberg
In general, Daliresp is performing as we had expected. This is a new category doctors need to try. They are bringing patients in, many of them in various stages of severe disease, and using accordingly as they get their experience. And we will closely monitor that and work with that and try to aid and abet their understanding of drug.
Operator
And your next question comes from the line of Corey Davis from Jefferies.
Corey B. Davis - Jefferies & Company, Inc., Research Division
Maybe to follow on that a little bit. I think you said you compared the amount of educational efforts you're putting out there on Daliresp to that of Namenda, and yet, the 2 launches are dramatically different. So I can't think of a better way of asking the question than, why isn't Daliresp doing better? Are doctors just not understanding where it should be used? Is it just a matter of reach? Were they struggling to find the right patients, et cetera?
Elaine Hochberg
That's a very good question. We actually are fairly pleased with how Daliresp is performing. Perception of the drug from all of our market research is very good. The user base is growing. 50% of pulmonologists have tried the drug to date and only 4 months out. The repeat usage, by the way, of those physicians is very similar to what we see in another therapeutic categories like Bystolic. Patients treated per using physician is similar to Spiriva. In our estimation, the market is behaving logically. And maybe unlike Namenda, where there had been tremendous use abroad prior to our launch for a very long time, where there was all this pent-up demand, Daliresp is a virtual newcomer on this side of the ocean and the others. So right now, we believe we're in a very good position for a category, by the way, which in the end is really just beginning to grow.
Francis I. Perier
I think add also Corey that -- and again, Daliresp is the first product launched into the COPD market that is not a bronchodilator. So you're really launching a completely new mechanism targeted at the exacerbations associated with severe COPD, which, again, you're not going to get that -- there's a lot of medical education that needs to be delivered and you're not going to get that in your first 3 or 4 calls that you're going to have in that doctor's office. So -- since -- that takes some time, but physicians who are using it, physicians who have written it and put patients on it, the market research indicates that the product, they've -- has a very stable profile with the physician and there's really -- there's no major hurdles.
Elaine Hochberg
The other thing I probably would add to this is that general awareness is very different today than it was all those years ago. Aside from the fact that memantine had been previously marketed, the amount of medical education in the market preceded us so that awareness of memantine was much, much higher. Here, we're basically building from scratch, and within several short months, have been able to raise awareness. But from there, we'll have to, of course, continue to promote, to instruct doctors where, when, how to use the drug and how to recognize patients who have the potential for additional exacerbation.
Corey B. Davis - Jefferies & Company, Inc., Research Division
That's a good point. And Frank, while I've got you there, your gross margin this quarter seemed to go up a lot sequentially with nothing obvious, at least to me, in terms of the product mix that drove that, so is there a logical explanation there?
Francis I. Perier
Gross margin was pretty much in line both with expectation and prior year.
Corey B. Davis - Jefferies & Company, Inc., Research Division
Was it my math then?
Francis I. Perier
Well, we're pretty much -- I think it's math, Corey. We're pretty much right in line, 76%, 77%, which is basically where we've been pretty much every quarter.
Operator
And your next question comes from the line of Tim Chiang from CRT Capital.
Timothy Chiang - CRT Capital Group LLC, Research Division
Maybe just taking with gross margin, Frank. Do you expect gross margins to change materially once Lexapro goes generic? Or at least during the 180 days of exclusivity that the generics has? I mean, should 76% to 77% gross margin be a right number?
Francis I. Perier
Yes, I mean, Tim, we haven't really been given any hard guidance on gross margin going forward. But I think our expectation as we look out into the 5-year plan is that we have actually very little movement in gross margin over our planning horizon. And again, I think the reason for that is that royalties and related royalty expenses are included in cost of goods, and across our product lines it's pretty consistent.
Timothy Chiang - CRT Capital Group LLC, Research Division
Maybe just one follow-up on Lexapro. With the floor of $1.20 in fiscal '13 of EPS, is it possible that you will still get a material contribution from Lexapro at least during the 6 months of exclusivity that Teva has?
Francis I. Perier
I would certainly count our expectations relative to the 6 months of exclusivity that will remain for Lexapro as being material for the next fiscal year.
Timothy Chiang - CRT Capital Group LLC, Research Division
Any sort of numbers in terms of the share that you might want to throw out there in terms of what you think you'll still be able to retain?
Francis I. Perier
You know what? I'll be in a better position to give you those numbers in April.
Operator
And your next question comes from the line of Gary Nachman with Susquehanna Financial.
Gary Nachman - Susquehanna Financial Group, LLLP, Research Division
First for Elaine on Bystolic, how much more headroom is there for the product? Where you think share could peak out at? And where would incremental growth continue to come from? What parts of the market could you still tap into, do you think?
Elaine Hochberg
We think Bystolic is a wonderful story and we continue to generate a tremendous amount of Phase IV data. In fact, we're launching a -- our clinical to our field force, is very POA to instruct physicians about patients using Bystolic in line with an ACE inhibitor versus ACE inhibitor alone. So we believe that there is a tremendous amount of opportunity. We see Bystolic moving -- continuing to move forward in the treatment paradigm. When we launched several years ago, beta-blockers generally were relegated third or fourth line. Bystolic continues to move younger and earlier in treatment. And we believe that as we manifest Bystolic benefits in a continuing stream of data, with the right promotion behind it, more and more physicians will continue to look to the opportunity of adding Bystolic to their regimen.
Gary Nachman - Susquehanna Financial Group, LLLP, Research Division
Okay. Do you think you could ultimately double share from where it is now? Just curious if your peak projections of the product has changed recently?
[Technical Difficulty]
Gary Nachman - Susquehanna Financial Group, LLLP, Research Division
Yes, I'm still here if you can hear me, I don't know if you heard. I
I was just following up and asking -- when we heard your response -- and that was very helpful. But I was curious, like, if your peak sales projections for Bystolic have changed at all. And I asked you if you could achieve maybe double the share of where you're at now, if you think that's a reasonable target.
Francis I. Perier
Gary, we haven't -- I guess you lost me early on in my response, because I said we haven't really shared what our long-term share targets are for the product, but that we continue the growth trend that the product's on to continue. Bystolic's in a very unique spot in the hypertension market. With Diovan going generic, our share of voice, not just in the beta-blocker category, but the overall hypertension market, has gone up dramatically. And as Elaine described, Bystolic has actually changed doctors' treatment algorithms in hypertension. Where beta-blockers normally reserve a third or fourth line therapy, we're seeing now that Bystolic is being used and used pretty consistently by both cardiologists and high-prescribing primary care doctors as the first add-on therapy to an ACE or an ARB. So what that really does is it also expands the pond of opportunities for Bystolic in the marketplace. So there's no -- we have a -- I think we have a very good, efficacious, well-tolerated drug that's got -- has over 220,000 writers in the market with very little competition. And we also have a fairly comprehensive life cycle management program underway, both with new data in Phase IV as we've already described, as well as some other interesting things that we'll probably be talking about in the future. So Bystolic is -- again, I think it's a tremendous success story and it's got plenty of room to go.
Gary Nachman - Susquehanna Financial Group, LLLP, Research Division
Okay. If I could squeeze one more, just a follow up on the Lexapro question before either for you, Frank, or Elaine. Do you guys have any plan to be aggressive with the brand like Pfizer was with LIPITOR? Or we should just expect the launch of the authorized generic and then Teva's exclusive launch over the 6-month period?
Francis I. Perier
I think from an expectation standpoint, if you just assume this is kind of your normal 3-party market for 6 months, that's probably the right way to think about it. We are certainly looking for some ways to help accelerate that, but that's the way you should think about it.
Operator
And your next question comes from the line of Annabel Samimy from Stifel, Nicolaus.
Annabel Samimy - Stifel, Nicolaus & Co., Inc., Research Division
Just really quickly on the number of franchises you guys are developing. It's very impressive that you're now moving into the fourth franchise and potentially the GI franchise as well. To what extent do you have the capacity to absorb some of these new franchises with your current sales force? And to what extent are you going to have add to that sales force for linaclotide?
Francis I. Perier
Annabel, thank you for the question and it's a great question. And it's interesting, the number of products that we're already promoting with our existing sales force. That's really -- and we really expanded that field force by 300 reps on the primary care side of the house last year. We -- and as we said, when we acquired Clinical Data, we accelerated part of the sales force expansion that had always been planned for the timing of the approval of aclidinium and linaclotide. So next year -- next fiscal year, we do plan, pending the approval of those products, to have another expansion of the sales force to basically round it out more. So you've almost added, over the 2 expansions, a full primary care sales force plus another specialty field force. So I think that's the way to think about it, that as we look at both of what our reps are doing today and then what we have coming out of the pipeline, hopefully out of the FDA this year, that we'll have the right level of resources to promote those products.
Annabel Samimy - Stifel, Nicolaus & Co., Inc., Research Division
Any details on the size of that sales force expansion?
Francis I. Perier
Well, again, I said, we had always planned to have a full field force expansion for aclidinium and linaclotide. That was about 550 people. We brought in about 300 last year. We'll probably be about the same size of an expansion this year.
Annabel Samimy - Stifel, Nicolaus & Co., Inc., Research Division
Okay, great. And then just if I can ask a question on Daliresp, I don't -- maybe I missed this, but can you just tell us which patient population it's in specifically? Is it in the most severe population? Is it trending in towards the severe to moderate to severe population? How is that broadening out in the COPD market?
Elaine Hochberg
Annabel, this is Elaine. It's a very good question. Of course, we're indicated for severe and doctors are logically trying it at the back end of that spectrum and they're slowly moving forward. In a way, I've often talked about it internally very much like what we did with Bystolic, starting at the back end then moving forward, and we're beginning to see some of that movement, albeit it will take continued reinforcement and education with physicians to help them fully realize that.
Operator
And your next question comes from the line of Irina Rivkind from Cantor Fitzgerald.
Irina Rivkind - Cantor Fitzgerald & Co., Research Division
I wanted to see if you could update us on the products that you had partnered in Canada with Janssen and whether or not we can expect to see any revenues from those in the coming year. And if not, when we can perhaps start seeing some of those revenues.
Francis I. Perier
Yes, the -- regarding the Canadian business, we have just recently filed Bystolic for approval with the Canadian medical authorities. So it's really pending that review and approval before we'll be in a position to launch the product. And I think we'll be in a better position to kind of give you an update on that when we give full-year guidance on '13 in April. But it's a great question, Annabel. Thank you -- Irina, I'm sorry.
Irina Rivkind - Cantor Fitzgerald & Co., Research Division
I just have a second follow up. In terms of the market opportunity for Forest's COPD portfolio, how do you view that in recent -- in light of the recent setbacks from Novartis and GSK? Has anything changed in the way you guys view the opportunity in the market?
Francis I. Perier
I think that as we look at some of the decisions that have come from the respiratory division of the FDA, I think that actually we're very pleased with the COPD pipeline that we have, especially for the drugs that we have both approved in the market, as well as under development. And I think that as you look at both where Daliresp fits -- will fit in the overall treatment regimen, where aclidinium will fit in the overall treatment regimen, where aclidinium and formoterol will fit in the overall treatment regimen, as well as the other products that we have in the pipeline, that we think we're in a pretty good space relative to positioning ourselves to be competitive in the COPD market.
Operator
And your next question comes from the line of Mario Corso from Caris & Company.
Mario V. Corso - Caris & Company, Inc., Research Division
Can you talk a little bit about -- in terms of this year's guidance, so it's a $0.10 difference between the high end and the low end of the range. Can you talk about what the swing factors are that you're looking for there? And in terms of linaclotide and aclidinium, are you expecting to have FDA panel reviews on both of those products?
Francis I. Perier
Sure. Mario, I think with regard to the range of guidance, we really -- if you think about it, we were at $3.60 to $3.70 originally, which was our full-year planning range. And again, that's factored on -- there's a lot of puts and takes that can happen within our P&L in any given year. We basically have raised the range from -- to $3.65 to $3.75, so it brought both the bottom and the top up by $0.05. And again, there's still plenty of puts and takes that have yet to unfold in the fiscal year. But that's kind of the -- really the rationale behind the range of the guidance.
Marco Taglietti
With regards to the Advisory Committee for FDA, being both linaclotide and aclidinium novel mechanism of action, you should expect that there would be advisory committees. Of course, this remains a decision of FDA.
Operator
And your next question comes from the line of Gregory Waterman from Goldman.
Gregory Waterman - Goldman Sachs Group Inc., Research Division
Just a specific one, and I apologize if I missed this earlier. The other revenue line accreted over $10 million in income. This is a big step up from recent quarters. Can you just tell us what drove that?
Francis I. Perier
Yes, Greg. They were really just nonrecurring one-time items in other income in the quarter. One was a contingent gain settlement from a legal matter, and I think we had some positive impact from foreign exchange. Those are the 2 principal items.
Gregory Waterman - Goldman Sachs Group Inc., Research Division
And we can assume there's no cost of goods to go alongside those?
Francis I. Perier
No, no, no.
Operator
And your next question comes from the line of David Risinger from Morgan Stanley.
Dana Yi - Morgan Stanley, Research Division
This is Dana Yi for Dave. When I looked at Daliresp's 9-month sales it was $18 million, less than 1/3 of your $60-million fiscal year target. Can you please comment on the slower-than-expected sales ramp and if you're still confident that you will meet the target?
Francis I. Perier
Thank you for the question. We're not giving updates on guidance on individual products at this point. It's -- I will say that if you look at our 3 launched products, that we're probably running slightly behind expectation on Daliresp and Teflaro from an overall year standpoint. We're running ahead on Viibryd. But the individual puts and takes, again, at the launch phase of these products are not that important. What we're really looking forward as to what's going to be the trend and trajectory of these products as we look out to fiscal '13, and we'll give you more guidance on that in April.
Elaine Hochberg
And what I would say about all of our launch products at this point, including Teflaro, is that perceptions by doctors and by those using are very good. That nothing that we have seen to date indicates any fatal flaw and just really more opportunity for us to grow.
Operator
Your next question comes from the line of Frank Pinkerton from SunTrust.
Frank H. Pinkerton - SunTrust Robinson Humphrey, Inc., Research Division
First one, can you just make any comments on cash flow impact of Lexapro over the next 180 days? Just specifically, any comment around where rebating stands. Are there going to be any onetime items there? And I know also on the pricing side, very conservative over the last couple of years in raising price. Once generics come out, would there be a chance to raise price again?
Francis I. Perier
Frank, no, I don't think we expect any major kind of cash flow impacts other than the fact that the sales are going to be down. But the value of those sales should remain relatively static. We've taken some price increases on Lexapro, and I think our pricing has always been appropriate. Maybe on the conservative end, but I always think it's always been appropriate and responsible. And we will continue to look at prices and opportunity in the market.
Frank H. Pinkerton - SunTrust Robinson Humphrey, Inc., Research Division
Okay, great. And just a follow-up. A lot of time, analysts, we try to look at the numbers. For example, like G&A is, what is kind of a fixed to built-in number to things like run sales forces and everything else? And then what would be variable in a year, say, for product launches? How do you remove the variable? How do you add variable for the next year? So can you just do a -- maybe a breakdown for what maybe some of the cost over the last 3 quarters that included launches and other things, either as a percentage or a number, just to give us a little more color on how to try to forecast some of the SG&A going forward?
Francis I. Perier
Yes, I think the way to think about it is that we have a base of sales reps in the organization that's now approaching 3,300 reps, and that they are fully employed. Now we do have -- plan to expand our rep base again, assuming the approval of aclidinium and/or linaclotide. So that's kind of one major component. I think the, kind of, the variable component that does kind of wax and wane with product launches and depending upon where the product's life -- where it is in its life cycle is the amount of marketing, investment and support that you're putting behind the product. And again, when you have launch products, that's the period when you have the largest investment behind the product. And if you're launching a primary care product with several million details a year, you're looking at anywhere between $70 million and $90 million of incremental marketing expenses to launch that product. So if you have multiple products and they're in the primary care space, they're -- those are going to be big pockets of incremental expense, which might actually grow somewhat in the following year and then start to decline by year 3 and 4.
Operator
And your next question comes from the line of Ronny Gal from Sanford Bernstein.
Aaron Gal - Sanford C. Bernstein & Co., LLC., Research Division
I got 2, starting with the first one around Namenda and Namenda XR. A good segment of the sales of Namenda is from the long-term care channel. And I was wondering about the incentive structure for those organizations. That is, obviously using rebates as a major tool with the PBMs and I'm not sure if this tool actually works in long-term-care channel. Are those organizations more capitated and look at total acquisition cost of the drugs? Can you give us some color about how those guys think about buying drugs?
Elaine Hochberg
Ronny, it's Elaine. Our experience with Namenda in long-term care has been rather similar to our experience on the retail side, and we would expect with Namenda XR for that to be the same.
Aaron Gal - Sanford C. Bernstein & Co., LLC., Research Division
So it's saying they don't -- there's no difference in the financial incentives for this organization versus the broader market?
Elaine Hochberg
Not really.
Francis I. Perier
No.
Aaron Gal - Sanford C. Bernstein & Co., LLC., Research Division
Okay, great. And second, around Viibryd, I'm a little bit surprised that the percentage of use as first line is so high. I think you mentioned 26% to 29% in first and second line. Can you just give us a little bit more color here? You kind of expect that in a market so saturated with generics that the co-pay will influence patient behavior. And your product will be used essentially by -- as patients cycle through for drugs. What drives that first-line adoption?
Francis I. Perier
Ronny, I'll maybe start and I think Elaine will give you a little bit of additional color as well. I mean, as we went into the launch, remember, we were expecting that -- to position Viibryd as the first alternative to -- basically second line, as the first alternative to one generic failure. And that's how we were trying to position it in the marketplace. We also are very pleasantly -- we are also very pleased with the response in the market to the product. I think it's given the profile of the drug. I think first and foremost, you have a drug that's efficacious and works on the depression symptoms. So that's first and foremost. And that's your way into the market. And having the product on the market these several months, have enough time, try enough patients to and say, "You know what? It looks this product is an efficacious antidepressant. It works against MDD. By the way, it's got a very interesting side effect profile. I know who those patients likely are. Let me try this drug on them." And -- so getting -- based on research, about 1/2 of our prescriptions out of first-line therapy at this stage of the launch. We're very pleased with that positioning. And I think it's largely attributed to the profile of the product and I would also say, largely attributable to the expertise of our sales force in knowing who to call and what's the right messaging in this market.
Elaine Hochberg
Ronny, I would say that Frank has this on the button. The attributes of the product really bespeak first-line use much more than reserving it for special cases, and I think the market's voting that there's need. And why not try this product, given the fact that its attributes are appropriate for that utilization?
Aaron Gal - Sanford C. Bernstein & Co., LLC., Research Division
Do you think it's more on a sexual side effect as the differentiator here?
Elaine Hochberg
I think Frank led with efficacy. What we're hearing and what we know from our market research is doctors primarily are leaving other drugs or one drug based on efficacy. So efficacy is the play. Everything else is commentary and comes into the mix.
Operator
And your next question comes from the line of Doug Tsao from Barclays capital.
Ann Trimble - Barclays Capital, Research Division
It's Ann Trimble for Doug Tsao. Just a few, the first on aclidinium and linaclotide. Could you review your expectation for first cycle or [indiscernible]? And the second question is, given Forest's commitment to some of this hospital-based resources to support Teflaro as well as Daliresp, has Forest thought about expanding that sales force?
Marco Taglietti
Well, with regard to aclidinium and linaclotide, we submitted 2 very complete packages both in terms of efficacy and safety. And FDA is going through their review right now. So we have very little feedback right now on which we can make any prediction on how FDA will see these packages. We believe that -- and you may have -- we believe the data, both in terms of efficacy and safety, are very solid. I think you may have seen some of our press releases and at this point, we are optimistic, but very certainly a strong possibility of a first cycle approval.
Francis I. Perier
And with regard to the institutional sales force, no, we basically don't plan to expand that field force. It's -- we have about 245 reps in the institutional field force right now. They've done an excellent job of moving Teflaro and getting Teflaro into over 2,500 hospitals around the country. They continue now to drive the message throughout those institutions and to drive utilization. And interestingly, the combination of adding Daliresp to their call point is a synergistic call, really, because again, Daliresp is going to the pulmonologist and the pulmonologist is also one of the call points for Teflaro. So it's really a synergistic play and really a way to kind of wrap the pulmonologists with, "Here's all the products that Forest has to bear in the marketplace." So it's a very synergistic call. It doesn't really require additional field force or put a tremendous demand on that field force to go out and find a new set of docs. They're already trying to get to the pulmonologists for pneumonia infections.
Elaine Hochberg
In fact, anecdotally, some of our [indiscernible] earlier in the year, pulmonologists were asking us about Daliresp. So we're already seeing that synergy even before we step in the door.
Operator
And your next question comes from the line of David Amsellem from Piper Jaffray.
Traver A. Davis - Piper Jaffray Companies, Research Division
Traver Davis on for David. I just have a couple on Viibryd to start. Are you seeing usage primarily in patients who have cycled through other antidepressants? And are there any other depression subgroups where the drug is gaining traction? And I have a follow-up on Viibryd.
Elaine Hochberg
Can you repeat the question? I'm sorry, but you broke up.
[Technical Difficulty]
Traver A. Davis - Piper Jaffray Companies, Research Division
So just a couple of questions on Viibryd. Are you seeing usage primarily on patients who have cycled through other antidepressants? And also, are there any other depression subgroups where the drug is gaining traction?
Francis I. Perier
I think that what we're seeing with Viibryd, I think as we've indicated, is that where our expectation had been that patients would be going through -- a high volume of patients who have been failing a generic first, that actually there's awful lot of first-line use for the product. So doctors, based upon our market research, are using Viibryd pretty heavily. Almost half the doctors in our research are using Viibryd as a first-line agent. And probably about 60% of the remainder are using it as a second-line agent after one generic failure.
Elaine Hochberg
And I would say, from the very beginning, we have been seeing naive-to-market patients on the drug and that remains. Of course, we are seeing first line and second line as Frank just talked about. And maybe in the mix, there are ones who have tried drugs many times before and are now coming back, but we are seeing a tranche coming from naive-to-market patients.
Traver A. Davis - Piper Jaffray Companies, Research Division
And also, can you elaborate on any plans that you may have to expand the label for Viibryd? Are you looking to maybe getting an indication for anxiety disorders? And is an expanded label something you feel you need to have in order to maximize the commercial opportunity?
Elaine Hochberg
This is Elaine. We always need data to elucidate the benefits of our drugs to physicians on an ongoing basis. We have a healthy program with R&D to model our position in depression and we are, in fact, looking at additional indications. Marco may want to comment.
Marco Taglietti
Absolutely. We have -- actually, the program is very -- both are looking at new indications. We're looking pediatrics. It's one of our Phase IV commitment. We're looking to explore lower doses. This is also a part of our Phase IV commitment, but is also a way to expand the label -- the labeling and the use of the drug. We are also looking at collapse prevention and that is, again, part of our Phase IV commitment that not only will satisfy the FDA request, but will allow us actually to make a much richer labeling. So I think we are investing quite a lot in terms of R&D for Viibryd.
Francis I. Perier
Yes, I think the way to think about it, too, is that the life cycle program, the label expansion program, the Phase IV program that we have in place for all of these products will be very similar to what we've done in the past with Celexa, Namenda and Lexapro as far as getting -- having regular data come out of the R&D organization that we can put into the hands of our field force, and expanding the label to make sure that the product profile is broad as it can be.
Traver A. Davis - Piper Jaffray Companies, Research Division
That's helpful. And just one last one on the pipeline. Can you talk about how you think levomilnacipran is differentiated from other dual-reuptake inhibitors? And also, do you need to see evidence of differentiation from other SNRIs rather than just statistical benefit over placebo in the current study in order to move ahead with an NDA?
Francis I. Perier
I think maybe I can -- being the finance guy, I can take a couple of shots at the science here. I think that one thing that we've seen, very interesting about levomilnacipran, is that it has more -- higher ratio of norepinephrine to serotonin than the other dual-mechanism agents there in the market. And the hypothesis being that, that could be one of the contributing factors to the significant changes in the MADRS scores in the last completed Phase III study, as well as the original Phase II -- large Phase II study that we originally licensed the drug from. So we certainly see the ability to potentially position levomilnacipran against the dual-mechanism agents, the SNRIs, kind of at the upper end of the depression market. Based upon the clinical profile we've seen to date, we're going have some more data shortly that will hopefully validate that -- those assumptions. And it's -- I think that's one way of positioning levomilnacipran within the marketplace.
Elaine Hochberg
And I would say that with the happy performance as far as Viibryd in its relevant part of the marketplace, there is room for levomilnacipran to do the same in its part of the marketplace. Marco?
Marco Taglietti
So I think very little to add, other than the efficacy of levomilnacipran has been really what trigger our interest when we were selecting the drug, and really positioning this for really the patient that really require significant amount of efficacy. I think the type of difference we're seeing in MADRS score is not something has been seen frequently, and we have not only the Phase II, but now we have a Phase III confirming it, one of our Phase III, and we're waiting just in -- very soon to have the results of the next Phase III studies.
Operator
And your final question comes from the line of Catherine Arnold from Crédit Suisse.
Catherine J. Arnold - Crédit Suisse AG, Research Division
I wanted to ask you just 2 quick things. One is, Marco, on cariprazine. If we see efficacy in the trials that are going to be released, can you just remind us what the potential is for this molecule in regards to injectable and long-acting forms as we may see a trend moving in that direction? And then, Frank, I just wanted to -- I thought you were very elegant in the way you respond to that earlier Lexapro question about contracting. But I guess I wanted to come back to that just for a second and ask you a different way. Is there any reason why Forest would not consider some creative strategies through the exclusivity period?
Marco Taglietti
So let me start taking the question about cariprazine. What we have seen to date, we have a Phase III studies, actually in acute mania and betas confirming the good results on the Phase II with good efficacy. For schizophrenia, we are still waiting for the Phase III trials. Some of our Phase III trials actually have also an active control. So that is our way, really, to be able to character -- fully characterize the profile. And at this point, really, we are in a waiting mode until we will get the results in this quarter. The other indication, as a adjunct therapy in MDD and in bipolar depression, we are in Phase II, so maybe a little early to make a final comment on the profile. But we are really very confident with the type of mechanism of action. The evidence that we have accumulated in Phase II is really -- show that this drug can be differentiated with a D2/D3 partial agonist effect and that is really where we think we may see some differentiation both in terms of efficacy and tolerability. Tolerability will be really, I think, a big aspect for this drug.
Francis I. Perier
Thanks, Marco. Yes, I think again, from the setting expectations standpoint, I think people should expect that this is going to be a generitization of a major product, with one generic company with 6 months exclusivity and one authorized generic will be competing in the marketplace as well, Mylan being our authorized generic. We will certainly be looking for more opportunities to maintain Forest's share of that final 6-month cash flow cycle. We're just not in the position to be making any of those promises at this point. But suffice it to say that we think we've always been a fairly creative and assertive competitor in the market, and I think you should expect the same during that 6-month period.
Elaine Hochberg
Catherine, this is Elaine. I'm just going to get back to your first question. I think Marco really talked very well about cariprazine. I think mechanistically, with D2/D3, when you put it all together, relative to the market that currently exists, it would probably suggest we're more similar to the Abilify spectrum of the world than elsewise. And with the other elements of the mechanism, we should be able to further elucidate benefits for the drug in the marketplace.
Operator
And there are no further questions.
Frank J. Murdolo
Okay. Well, thank you, operator. Thanks, everyone, for joining us this morning, and we look forward to speaking with you with any additional questions that you may call in on. Thank you.
Operator
Thank you for your participation. This concludes today's conference call. You may now disconnect.
Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.
THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.
If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!