Forest faces $100M gender bias suit

Posted July 6th, 2012.

As it appeared in FiercePharma

by Eric Palmer

Megan Barrett says when she returned from each of two maternity leaves, her job ranking at Forest Laboratories ($FRX) was downgraded. When Jennifer Seard tried to figure out a way to both continue to work and get time to take care of her epileptic son, she says a manager told her she was “unmotivated.”

Now they and two other former sales representatives at the drugmaker have filed a $100 million gender bias lawsuit against the company. They are asking for class status for about 1,500 former and current women sales reps there dating to 2008, Reuters reports. “Gender discrimination is Forest’s standard operating procedure rather than a sporadic occurrence,” the complaint says.

The woman have plenty other cases to look to for encouragement. The firm they are using, Sanford Wittels & Heisler, won a $175 million settlement in a similar case in 2010 against Novartis ($NVS), and then turned around and got another $99 million from the company for sales reps in 2012. And Bayer is facing one right now from 8 women who are asking for more than $100 million.

The Forest case comes as the company has had its attention tuned to its very public and bruising fight with investor Carl Icahn, who wants to load the board with friends and turn over the management at the company since its growth has been stalled.

Icahn has been peppering shareholders with letters accusing CEO Howard Solomon of such things as betting against his own company by selling $500 million in personal shares at above market prices and with dynasty building, saying he is preparing to turn the company over to his son, David. Forest has retorted that Icahn is up to his old tricks and does nothing to work constructively with the company, which says it is making progress with new products.

His arguments are getting a boost from analysts who say that Forest needs to buy a company with a drug that can give it some revenue as it faces patent losses, Bloomberg reports. About 75% of its $4.5 billion in sales last year came from one drug, antidepressant Lexapro, and its was stripped of its patent shield in March. Both Robert W. Baird & Co. and Piper Jaffray Cos. say Forest should use some of the $3.2 billion in cash and securities sitting idle on its balance sheet to buy a company with the kind of revenue potential to boost its bottom line.

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