Forest Labs' longtime CEO Solomon to step down at year-end


Forest Laboratories Inc said Howard Solomon, its chief executive of more than 35 years, will retire at the end of this year, capping a tenure that saw the company morph from a small generic and vitamins maker to a $10 billion corporation.

Solomon will continue in the chairman role until the annual shareholder meeting in 2014, the company said.

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Forest Labs, which was in a bitter proxy battle with activist investor Carl Icahn last year, said it has been evaluating internal and external candidates for the top job.

The company adopted a shareholder rights plan last August year after Icahn built up a more than 10 percent stake in the company and won one of four board seats that he sought at the company.

Icahn has criticized the company for being ill-prepared to generate new growth as generic competition curtails revenue from two of its biggest-selling treatments - Lexapro for depression and Namenda for Alzheimer's disease.

He also accused the company of hiding information from shareholders that could show it was trying to deter potential acquirers and expressed concerns about the company receiving warning letters from the U.S. Food and Drug Administration about unethical practices by its sales representatives.

Icahn was not immediately available for comment when Reuters tried to contact him on Thursday.

"While Howard Solomon has built an unquestionably successful company, we believe disclosure of succession plans will be viewed favorably by investors and expect Forest shares to react positively to the news," J.P. Morgan analyst Chris Schott said in a note.

Solomon will stand for re-election to the board of directors at its 2014 shareholder meeting and become chairman emeritus.

The company's shares rose 2 percent to $38.30 in morning trade on the New York Stock Exchange. They touched a high of $38.98 earlier in the session.

(Reporting by Caroline Humer in New York and Esha Dey in Bangalore; Editing by Gerald E. McCormick and Saumyadeb Chakrabarty)