Forest Laboratories Inc is looking more at earlier-stage products to acquire rather than more advanced ones because it feels confident it can weather the patent expirations of its two biggest medicines, the drugmaker's finance chief said on Thursday.

Forest has one of the most severe patent cliffs in the pharmaceutical industry: analysts expect Forest to lose about one-fourth of its revenue after its Lexapro antidepressant loses patent protection early next year. Its Namenda Alzheimer's drug will lose patent protection in 2015.

To counter those declines, Forest has acquired or licensed rights to new products that are in late-stage development or are newly approved. It calls them the Next Nine.

While not ruling out buying more late-stage products, Chief Financial Officer Frank Perier said, Our focus is maybe toward a little bit earlier stage.

We think we're in a good place in managing the next two patent expirations in Lexapro and Namenda, and we're really now focused on 2020 and trying to make sure we've got a flow of products that will continue to evolve, Perier said.

Asked whether the company has done enough to help fill the Lexapro-Namenda gap, Perier said, We think we've done enough, and anything that we would do would be incremental to grow the business.

We have one of the better product profiles of any major pharmaceutical company, relative to our size, said Perier, whose company has a market value of nearly $9 billion.

Forest launched two of those drugs this summer: antidepressant Viibryd, and Daliresp, for reducing the risk of exacerbations from chronic obstructive pulmonary disease.

The company began a full launch in late August with 1,200 sales representatives supporting each product. We're very pleased with how the launches are going, Perier said.

How those drugs are doing may become clearer next Tuesday, when Forest reports results for its fiscal second quarter.

Tougher regulations have made it more difficult to raise awareness of new medicines before their approvals, Perier said.

You're launching today with physician awareness levels based upon market research that are very, very low at the point in time the products are approved as opposed to if you went back 10 years ago, Perier said.

Perier said the challenge is particularly acute for Daliresp, a tablet in an area addressed generally by inhaled products.

Now you're dealing with a whole new drug in a whole new class really so there's a little bit heavier lifting at the earlier stage of the product launch to first get physicians aware, he said.

Although the company does not give specific long-term product sales projections, Perier said Forest typically looks for products with annual sales potential of at least $500 million. Viibryd and Daliresp appear to fit those projections, he said.

Our planning window is between that $500 million and a billion dollars, Perier said. There's nothing to indicate that either one of those drugs won't be somewhere in that range.

In August, Forest won a showdown with activist investor Carl Icahn as shareholders backed the drugmaker's slate of board members over nominees proposed by the billionaire.

Three new board members who were Forest nominees were elected to the 10-member panel, while two longtime directors left. Perier said Icahn's challenge accelerated a company plan to transition the board.

Clearly that was one of the outcomes, and it's a very positive outcome, Perier said.

Since the annual meeting, Perier said the company had a meeting with one of Icahn's representatives that was cordial and relatively informal.

Icahn's loss came after the U.S. government dropped plans to bar longtime CEO Howard Solomon from doing business with federal healthcare programs, weakening a key plank in Icahn's argument for change.

In November, the company promoted four executives, including Perier, as part of succession planning for Solomon, who has led the company since 1977.

With the Icahn battle and government action behind the company, Perier said, the board is back to going through their succession planning process.

(Reporting by Lewis Krauskopf in New York)

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