Forest Laboratories Inc. (FRX) reported encouraging results from two late-stage studies of its ceftaroline treatment for bacterial pneumonia and said it plans to file a new drug application for the product by the end of this year.

Dirk Thyne, president of Forest's Cerexa unit, called the results - which met their primary objective and achieved high clinical cure rates - "a significant development milestone" for ceftaroline.

The compound was at the heart of why Forest Labs acquired Cerexa 2 1/2 years ago for $480 million. In addition to being a pneumonia treatment, ceftaroline is being studied as a treatment of complicated skin infections.

In recent trading, Forest shares were up 1.4% at $24.54.

The studies focused on treating pneumonia contracted outside of hospitals or extended-care facilities. It put ceftaroline against Roche Holding AG (RHHBY) antibiotic Rocephin (ceftriaxone) in those patients requiring hospitalization.

The findings showed that ceftaroline wasn't inferior to Rocephin and had a slightly higher cure rate - 84% versus 78%.

The news brings a bit of light to what has been otherwise a dark few months for Forest. In the last quarter, Forest said sales of its depression fighter Lexapro fell 5%. Lexapro, which the company sells for Denmark's H. Lundbeck A/S (HLUKY) in the U.S., accounts for about 60% of Forest's revenue.

In April, Forest reported a 46% drop in fiscal fourth-quarter profit, partly reflecting $170 million the maker of name-brand and generic drugs set aside in connection with a U.S. government probe into its marketing practices.

In addition, the Food and Drug Administration earlier that month warned 14 major pharmaceutical companies, including Forest, about brief Internet ads that accompany searches on Google and other search engines. The FDA contended the ads were misleading because they didn't include risk information.

-By Mike Barris, Dow Jones Newswires; 201-938-5658; mike.barris@dowjones.com

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