UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK

VINCENT VINCI, Individually and On Behalf ofAll Others Similarly Situated, CIVIL ACTION NO.

Plaintiff,

vs . CLASS ACTION COMPLAINT

FOREST LABORATORIES, INC ., HOWARDSOLOMON, AND KENNETH GOODMAN,

Defendants .JURY TRIAL DEMANDED

Plaintiff, Vincent Vinci ("Plaintiff'), individually and on behalf of all other persons similarly

situated, by its undersigned attorneys, for its complaint against defendants, alleges the followin g

based upon personal knowledge as to itself and its own acts, and information and belief as to al l

other matters, based upon, inter alia, the investigation conducted by and through its attorneys, which

included, among other things, a review of the defendants' public documents, conference calls an d

announcements made by defendants, United States Securities and Exchange Commission ("SEC")

filings, wire and press releases published by and regarding Forest Laboratories, Inc . ("Forest" or the

"Company") securities analysts' reports and advisories about the Company, and information readily

obtainable on the Internet . Plaintiff believes that substantial evidentiary support will exist for the

allegations set forth herein after a reasonable opportunity for discovery .

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NATURE OF THE ACTION

1 . This is a federal class action on behalf of persons who purchased the securities o f

Forest between August 15, 2002 and August 31, 2004, inclusive (the "Class Period"), seeking t o

pursue remedies under the Securities Exchange Act of 1934 (the "Exchange Act" )

JURISDICTION AND VENU E

2 . The claims asserted herein arise under and pursuant to Sections 10(b) and 20(a) o f

the Exchange Act, (15 U.S .C. §§ 78j(b) and 78t(a)), and Rule IOb-5 promulgated thereunder (1 7

C.F.R. §240.10b-5) .

3 . This Court has jurisdiction over the subject matter of this action pursuan t to §27 o f

the Exchange Act (15 U.S .C. §78aa) and 28 U .S.C. § 1331 .

4. Venue is proper in this Judicial District pursuant to §27 of the Exchange Act, 1 5

U.S .C . § 78aa and 28 U .S .C. § 1391(b) . Many of the acts and transactions alleged herein, including

the preparation and dissemination of materially false and misleading information, occurred in

substantial part in this Judicial District . Additionally, the Company maintains a principal executive

office in this Judicial District.

5 . In connection with the acts, conduct and other wrongs alleged in this complaint ,

defendants, directly or indirectly, used the means and instrumentalities of interstate commerce,

including but not limited to, the United States mails, interstate telephone communications and th e

facilities of the national securities exchange .

PARTIES

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6. Plaintiff, Vincent Vinci, as set forth in the accompanying certification, incorporate d

by reference herein, purchased Forest securities at artificially inflated prices during the Class Period

and has been damaged thereby.

Defendant Forest is a Delaware corporation with its principal executive office s

located at 909 Third Avenue, New York, New York 10022 .

Defendant Howard Solomon ("Solomon") was, at all relevant times, the Company' s

Chairman and Chief Executive Officer .

9 . Defendant Kenneth Goodman ("Goodman") was, at all relevant times, the Company' s

President and Chief Operating Officer .

10. Defendants Solomon and Goodman are collectively referred to hereinafter as the

"Individual Defendants ." During the Class Period, each of the individual defendants, as senior

executive officers and/or directors of Forest was privy to non-public information concerning it s

business, finances, products, markets and present and future business prospects via access to interna l

corporate documents, conversations and connections with other corporate officers and employees ,

attendance at management and Board of Directors meetings and committees thereof and via report s

and other information provided to them in connection therewith . Because of their possession of such

information, the Individual Defendants knew or recklessly disregarded the fact that adverse fact s

specified herein had not been disclosed to, and were being concealed from, the investing public .

11 . Because of the Individual Defendants' positions with the Company, they had access

to the adverse undisclosed information about the Company's business, operations, operational trends ,

financial statements, markets and present and future business prospects via access to interna l

corporate documents (including the Company's operating plans, budgets and forecasts and report s

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of actual operations compared thereto), conversations and connections with other corporate officers

and employees, attendance at management and Board of Directors meetings and committees thereof

and via reports and other information provided to them in connection therewith .

12. It is appropriate to treat the Individual Defendants as a group for pleading purposes

and to presume that the false, misleading and incomplete information conveyed in the Company's

public filings, press releases and other publications as alleged herein are the collective actions of the

narrowly defined group of defendants identified above . Each of the above officers of Forest, by

virtue of his or her high-level position with the Company, directly participated in the management

of the Company, was directly involved in the day-to-day operations of the Company at the highest

levels and was privy to confidential proprietary information concerning the Company and its

business, operations, growth, financial statements, and financial condition, as alleged herein . Said

defendants were involved in drafting, producing, reviewing and/or disseminating the false and

misleading statements and information alleged herein, were aware, or recklessly disregarded, that

the false and misleading statements were being issued regarding the Company, and approved or

ratified these statements, in violation of the federal securities laws .

13. As officers and controlling persons of a publicly-held company whose securities were

and are registered with the SEC pursuant to the Exchange Act, and was traded on the New Yor k

Stock Exchange ("NYSE") and governed by the provisions of the federal securities laws, the

Individual Defendants each had a duty to disseminate accurate and truthful information promptly

with respect to the Company's financial condition and performance, growth, operations, financial

statements, business, markets, management, earnings and present and future business prospects, and

to correct any previously-issued statements that had become materially misleading or untrue, so that

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the market price of the Company's publicly-traded securities would be based upon truthful an d

accurate information. The Individual Defendants' misrepresentations and omissions during the Class

Period violated these specific requirements and obligations .

14. The Individual Defendants participated in the drafting, preparation, and/or approval

of the various public and shareholder and investor reports and other communications complaine d

of herein and were aware of, or recklessly disregarded, the misstatements contained therein and

omissions therefrom, and were aware of their materially false and misleading nature . Because of

their Board membership and/or executive and managerial positions with Forest, each of th e

Individual Defendants had access to the adverse undisclosed information about Forest financia l

condition and performance as particularized herein and knew (or recklessly disregarded) that thes e

adverse facts rendered the positive representations made by or about Forest and its business issued

or adopted by the Company materially false and misleading .

15 . The Individual Defendants, because of their positions of control and authority as

officers and/or directors of the Company, were able to and did control the content of the various SE C

filings, press releases and other public statements pertaining to the Company during the Class Period .

Each Individual Defendant was provided with copies of the documents alleged herein to b e

misleading prior to or shortly after their issuance and/or had the ability and/or opportunity to preven t

their issuance or cause them to be corrected. Accordingly, each of the Individual Defendants i s

responsible for the accuracy of the public reports and releases detailed herein and is therefore

primarily liable for the representations contained therein .

16 . Each of the defendants is liable as a participant in a fraudulent scheme and course o f

business that operated as a fraud or deceit on purchasers of Forest securities by disseminatin g

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materially false and misleading statements and/or concealing material adverse facts . The scheme

(i) deceived the investing public regarding Forest business, operations, management and the intrinsi c

value ofForest securities ; and (ii) caused Plaintiff and other members of the Class to purchase Fores t

securities at artificially inflated prices .

PLAINTIFF'S CLASS ACTION ALLEGATION S

17. Plaintiff brings this action as a class action pursuant to Federal Rule of Civi l

Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all those who purchased the securitie s

of Forest between August 15, 2002 and August 31, 2004, or the Class Period, and who wer e

damaged thereby. Excluded from the Class are defendants, the officers and directors of the

Company, at all relevant times, members of their immediate families and their legal representatives ,

heirs, successors or assigns and any entity in which defendants have or had a controlling interest .

18. The members of the Class are so numerous that joinder of all members is imprac-

ticable . Throughout the Class Period , Forest's securities were actively traded on the NYSE. While

the exact number of Class members is unknown to Plaintiff at this time and can only be ascertaine d

through appropriate discovery, Plaintiff believes that there are hundreds or thousands of member s

in the proposed Class . Record owners and other members of the Class may be identified fro m

records maintained by Forest or its transfer agent and may be notified of the pendency of this action

by mail, using the form of notice similar to that customarily used in securities class actions .

19. Plaintiff's claims are typical of the claims of the members of the Class, as al l

members of the Class are similarly affected by defendants' wrongful conduct in violation of federal

law that is complained of herein .

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20. Plaintiff will fairly and adequately protect the interests of the members of the Clas s

and has retained counsel competent and experienced in class and securities litigation .

21 . Common questions of law and fact exist as to all members of the Class an d

predominate over any questions solely affecting individual members of the Class . Among the

questions of law and fact common to the Class are :

(a) whether the federal securities laws were violated by defendants ' acts as allege d

herein ;

(b) whether statements made by defendants to the investing public during the Clas s

Period misrepresented material facts about the business, operations and management of Forest ; and

(c) to what extent the members of the Class have sustained damages and the prope r

measure of damages .

22. A class action is superior to all other available methods for the fair and efficien t

adjudication of this controversy since joinder of all members is impracticable . Furthermore, as the

damages suffered by individual Class members may be relatively small, the expense and burden of

individual litigation make it impossible for members of the Class to individually redress the wrong s

done to them. There will be no difficulty in the management of this action as a class action .

SUBSTANTIVE ALLEGATIONS

Background

23. Forest and its subsidiaries, develop, manufacture and sell ethical drug products, whic h

require a physician's prescription, as well as non-prescription pharmaceutical products sold

over-the-counter ("OTC"). The Company' s products in United States consist of branded -ethical drug

specialties marketed directly or detailed to physicians by the Company's Forest Pharmaceuticals ,

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Forest Therapeutics, Forest Healthcare, Forest Ethicare and Forest Specialty Sales forces . It

promotes in the United States those of its branded products, which has potential for growth an d

concentrates on group of physicians, who are high-prescribers of its products, such as Namenda ,

Forest's N-Methyl-D-Aspartate ("NMDA") antagonist for the treatment of moderate to sever e

Alzheimer's disease ; Lexapro, selective serotonin reuptake inhibitor ("SSRI") for the treatment o f

major depression, and Benicar, an angiotensin receptor blocker for the treatment of hypertension,

which Forest co-promotes with Sankyo .

Materially False And MisleadingStatements Issued During The Class Period

24. On August 15, 2002, Forest announced that Lexapro had been approved by the U .S .

Food and Drug Administration ("FDA") for the treatment of major depressive disorder .

Commenting on the news, defendant Solomon stated :

While Celexa, which Forest first introduced in 1998, is still the fastestgrowing SSRI in the market and has proven effective in the treatmentof major depression, Lexapro's combination of tolerability andpowerful efficacy, resulting in manypatients experiencing relief earlyin their treatment, may make it highly desirable for the treatment ofmajor depression[ .] . . .

25 . On October 15, 2002, Forest reported record revenues and earnings for its secon d

quarter ended September 30, 2002 . Net sales for the quarter increased 41% to $531,599,000 from

$376,267,000 in the prior year . Sales in the quarter included $386,398 , 000 of Celexa , Forest's

selective serotonin reuptake inhibitor (SSRI) for the treatment of depression, compared to net sale s

of $351,435,000 last quarter and $256,078,000 in the prior year's second quarter. Sales of Lexapro ,

Forest 's recently launched SSRI, were $21,749,000 . Commenting on these results, defendant

Solomon stated :

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In the recently completed quarter Forest's antidepressant franchisesignificantly increased through the continuing strength of Celexa,augmented in the quarter by the successful launch in September ofLexapro . Although it is still early in the launch of Lexapro, we haveexperienced positive physician response and a strong uptake inLexapro prescription volume . We also continue to make progress inthe development of our pipeline products .

We continue to see significant opportunity for growth during thebalance of our fiscal year . We intend to invest behind this opportunityby expanding our sales representative headcount still further andmaximizing our support of Lexapro given its favorable profile andearly physician response and therefore its ultimate market potential .Also during the fiscal year, we expect a generic competitor forTiazac(R), our calcium channel blocker for hypertension, andincreasing support of products presently in our pipeline and whichmay be acquired during the year . Accordingly, although it is difficultto predict earnings for the second half of the fiscal year, we arecomfortable that earnings should be at least fifty percent above thesecond half of last year.

26. Additionally on October 15, 2003, Forest held a conference call to discuss it s

financial results . During the call, defendant Goodman stated :

We saw a continued strength in the antidepressant franchise withCelexa achieving record quarterly sales of $386 million and with thecompany receiving approval for and launching Lexapro, the successorproduct to Celexa . Lexapro sales in the quarter were $22 million .During the quarter, we also received an approvable letter forlercanidipine, our calcium channel blocker for the treatment ofhypertension, and reported on the results of a very importantcompelling phase III clinical trial for memantine in combination withAerocept for the treatment of moderate to severe Alzheimer's disease .Although still early in the launch, we are very encouraged by theuptake of Lexapro and the overall market share gains for ourantidepressant franchise .

We currently rank third in franchise share for new prescriptionshaving recently surpassed Prozac and its generics, and continue tonarrow the market share gap to the market leaders . We continue tosee very strong growth in overall prescription volume for the SSRImarket with a growth rate of approximately 16 percent . Concurrentwith the Lexapro launch on September 5th, we eliminated al l

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promotions and representative sampling of Celexa and are focusingour efforts in the antidepressant franchise entirely on Lexapro . We arepositioning Lexapro with positions at the SSRI of choice whenprescribing for new patients, those patients who are not respondingto or not tolerating other SSRIs, and patients who are returning to themarket with a recurring episode of depression . The early market sharedata supports Lexapro's positioning as all of the other SSRI and SNRIproducts have lost share since Lexapro's launch .

27. On January 16, 2003, Forest reported record revenues and earnings for its thir d

quarter ended December 31, 2002. Net sales for the quarter increased 46% to $586,804,000 fro m

$403,100,000 in the prior year. Sales in the quarter included $452,194,000 for Forest' s

antidepressant franchise which was comprised of $371,207,000 of Celexa and $80,987,000 of

Lexapro, Forest's recently introduced SSRL Antidepressant sales in last year's third quarter were

$280,502,000. Commenting on these results, defendant Solomon stated : "Growth in our

antidepressant franchise was principally responsible for our strong financial performance during the

quarter. We are optimistic about the prospects for continued strong growth in our antidepressan t

franchise[ .] . . ."

28. Additionally on January 16, 2003, Forest held a conference call to discuss its financia l

results . During the call, defendant Goodman stated :

We saw dramatic expansion in our anti-depression franchise withtotal franchise sales $452m during the quarter . Of this, Lexapro

contributed $81m in sales, while Celexa sales were $371m. Celexapro-launch, now 4 months old, is going exceptionally well and we

expect Lexapro to be one of the most successful launches in the

industry. We have also been pleased with the performance of Celexa

and the curve of it's market share decline during the up take of

Lexapro. Since the launch of Lexapro in September, our combined

anti-depressant franchise has gained nearly four market share points,

within the SSRI category .

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29. On April 22, 2003, Forest reported record revenues and earnings for its fiscal fourt h

quarter and twelve months ended March 31, 2003 . Net sales for the fiscal year ended March 31 ,

2003 increased to $2,206,706,000, a 41% increase over reported sales for fiscal year 2002 o f

$1,566,626,000 . For the fiscal year, total antidepressant franchise sales were $1,696,709,000 which

was comprised of $1,451,979,000 of Celexa and $244,730,000 of Lexapro . Commenting on thes e

results, defendant Solomon stated :

Our significant growth in earnings this past fiscal year was basedprincipally on increased sales of our highly successful antidepressantproducts -- Celexa and Lexapro . Those products currently account fora higher and growing percentage of new presc riptions for SSRIs thanany other products in the category . We expect further growthprincipally in Lexapro , which we anticipate will be augmented byapproval of Lexapro for Generalized Anxiety Disorder in the currentfiscal year. We are also anticipating that the approval of Aerospan forasthma may occur this year and that the approval of memantine forthe treatment of moderate to severe Alzheimer 's may occur early nextfiscal year . We are therefore increasing our salesforce this year aswell as our research and development budgets to further suppo rt ourexisting products and their expanded indications and our currentproducts in development, as well as to enable us to unde rtake newprojects .

At this time, we expect that our projected investment combined withthe anticipated continuation of overall market share gains for ourantidepressant products is likely to result in earnings per share growthfor the fiscal year ending March 31, 2004 of at least 20% .

30. On June 19, 2003, Forest reported that based on a preliminary analysis of a recently

completed study, memantine administered to patients currently receiving acetylcholinesteras e

inhibitor therapy for the treatment of mild to moderate Alzheimer's disease failed to demonstrate

statistically significant differences on cognitive or global outcomes versus

placebo/acetylcholinesterase treatment .

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31 . On July 15, 2003, Forest announced that earn ings per share equaled $ .48 in the firs t

quarter of fiscal 2004 , an increase of 45% from the reported $ .33 in last year's first quarter .

Commenting on these results, defendant Solomon stated :

During the quarter our antidepressant franchise (Celexa and Lexapro)achieved the leading current market share of both new and totalprescriptions for SSRIs . New prescriptions for Lexapro now exceedthose of Celexa, and Lexapro's market share increase more than offsetthe share decline for Celexa. We look forward to a continuation ofLexapro's strength in the market which has been driven by consistentphysician and patient response to the clinical attributes of the product .

32. On July 15, 2003, Bloomberg reported :

Forest Laboratories Inc ., the maker of the Celexa antidepressant, saidprofit this year may fall short of forecasts because of slowing growthfor depression drugs . The company's shares tumbled 9 .4 percent .

** *

"Maybe the fast growth in this company is done," said Charles Ryan,an analyst for the BB&T Large Company Growth Fund, which holds30,000 Forest shares . "It's definitely a shock to me . This makesinvestors nervous . "

33 . On September 25, 2003, Morgan Stanley reported :

FDA Advisory Panel Gives Memantine the Nod

This is clearly positive news for FRX . The FDA typically follows thepanel's recommendation with respect to approving new drugs . Goinginto the meeting we were expecting a favorable outcome, but themarket was more skeptical and was obviously waiting for a nod fromthe panel, as the stock jumped almost $4 on the positiverecommendation .

34 . On December 12, 2003, Deutsche Bank issued a report on Forest. The report, i n

relevant part, read :

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We recently sponsored a number of investors meetings with themanagement of Forest- . We came away from these meetings witha sense that the outlook for Forest' s bus iness remains robust . . . .

Specific events include the impending launch of the new Alzheimer'streatment Namenda, improved visibility and perhaps an accelerationin the ongoing switch from Celexa to Lexapro . . . .

35 . On January 7, 2004, Forest announced that results of a U.S., Phase Ill study of

Namenda as monotherapy in mild to moderate Alzheimer's disease show the drug demonstrated a

statistically significant difference versus placebo with respect to the study's primary efficac y

measures of cognition and global outcome .

36. On January 13, 2004, Forest announced that Namenda, the first and only medication

approved for patients with moderate to severe Alzheimer's disease , was available to physicians,

patients, and pharmacies nationwide . Namenda was approved by the FDA on October 16, 2003

following a unanimous recommendation for approval by the Peripheral and Central Nervous Syste m

Drugs Advisory Committee on September 24, 2003 .

37. On January 20, 2004, Forest reported record revenues and earn ings for its third

quarter ended December 31, 2003 . Net sales for the quarter increased 19% to $700,447,000 fro m

$586,804,000 in the prior year . Sales in the quarter included $587,892,000 for Forest' s

antidepressan t franchise which was comprised of $313,696,000 of Lexapro and $274,196,000 o f

Celexa. Antidepressant franchise sales in the quarter increased by 30% as compared to last year' s

third quarter sales of $452,194,000 . Commenting on these results, defend ant Solomon stated :

During this quarter several important events occurred for Forest . Wereceived Food and Drug Administration approval for Namenda(TM)for the treatment of moderate to severe Alzheimer's disease and forLexapro for the treatment of Generalized Anxiety Disorder. Theseregulatory approvals are both important advances for physicians,patients and caregivers involved with these debilitating diseases . We

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also reported positive results from a placebo- controlled study ofNamenda in the treatment of mild to moderate Alzheimer's diseasewhich will serve as the basis of a potential label expansion . Lexaproachieved meaningful market share gains while Benicar(R)*, anangiotensin receptor blocker for the treatment of hypertension whichis co-promoted with Sankyo, continued to gain market share at theexpense of all competing products in the category .

38 . On January 20, 2004, Forest held a conference call to discuss its financial results .

During the call, defendant Goodman stated :

Key events for us during the quarter were the two significant FDAapprovals. Namenda, for the treatment of moderate to severeAlzheimer's disease and Lexapro for the treatment of generalizedanxiety disorder. Both opportunities are an important component ofsupporting our continued growth during the next several years . Also,we reported a positive study outcome for our mild to moderatemonotherapy study for Namenda which will support a supplementalNew Drug Application for that indication around the middle of theyear. This is meaningful as it could lead to Namenda being the onlyapproved product for the entire spectrum of Alzheimer's patients .

39. On April 20, 2004, Forest reported revenues and earnings for its fiscal fourth quarte r

and twelve months ended March 31, 2004 . Net sales for the fiscal year ended March 31, 2004

increased to $2,650,432,000 a 20% increase over reported sales for fiscal year 2003 o f

$2,206,706,000. For the fiscal year, total antidepressant franchise sales were $2,176,238,000 which

was comprised of $1,088,957,000 of Lexapro and $1,087,281,000 of Celexa . Commenting on thes e

results, defendant Solomon stated :

The just completed fiscal year was highlighted by strong performancefrom our antidepressant category led by our SSRI Lexapro and by therecent launch of Namenda, an NMDA receptor antagonist for thetreatment of moderate to severe Alzheimer's disease . For the yearLexapro sales surpassed the $1 billion mark and now account formore than two-thirds of the new prescription market share for ourfranchise . We anticipate further significant growth for this productand our franchise, which currently has the leading market share in th e

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category, as physicians continue to gain experience with and upgradepatients to Lexapro .

The launch of Namenda this past quarter for moderate to severeAlzheimer's disease has been notable for the rapid early adoption ofthe product by physicians and resulting significant market share gains .Namenda's distinct mechanism of action, favorable side effect profileand unique indication in the moderate to severe disease category willcontinue to drive use both as monotherapy and in combination withother currently approved products .

40. On January 20, 2004, Forest held a conference call to discuss its financial results .

During the call, defendant Goodman stated :

Namenda has exceeded our early projections . We are very pleasedwith the early read we have on the launch . Although the product hadbeen available in pharmacies since January we did not begin activedetailing and sampling until March 1, and have already seen a broadspectrum of patients utilizing the product . Our sampling program isvery active and will remain so for the foreseeable future. We have

noted abroad early acceptance byprimary care physicians, in additionto neurologists and psychologists . Although still very early in thelaunch we estimate that approximately 60% of Namenda's use is incombination with cholinesterase inhibitors, and abut 90% of its usein moderate to sever patients, 70% moderate and 20% severe .

41 . On April 23, 2004, Google published an article which stated that U .K. researches

found that SSRI 's, like Celexa and Lexapro, shouldn 't be given to children because the risks

outweigh the benefits . In fact, previously unpublished findings showed that such medicines were

less effective, had more side effects and raised the risk of suicide more than reported in publishe d

studies .

42. On June 29, 2004, Forest announced that it had received a request from the Office

of the Attorney General of the State of New York for any information that may exist with respec t

to off-label clinical trials or promotion of its' products .

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43 . The statements contained in ¶¶ 24-42 were materially false and misleading when

made because defendants failed to disclose or indicate the following: (1) that the defendants failed

to publish data showing that its SSRI's, Celexa and Lexapro, had mores side effects and raised th e

risk of suicide in children ; (2) that the Company, despite the unpublished data, aggressively marketed

the SSRIs; and (3) that the Company's Alzheimer's treatment was ineffective .

The Truth Begins To Emerge

44. On August 31, 2004, Forest announced that in a preliminary analysis, data from th e

first Phase III study of the investigational Alzheimer's disease treatment, neramexane , failed to

achieve statistical significance . More specifically, the Company, in its press release, stated :

The six-month, double-blind, parallel-group Phase III study wasdesigned to evaluate the safety and efficacy of combination therapywith neramexane and any of the three most widely prescribedacetylcholinesterase inhibitors (AChEI) compared to an AChEI alonein 415 outpatients with moderate to severe Alzheimer's disease . Earlyanalysis of data indicates that patients receiving neramexane and anAChEI did not achieve a statistically significant difference comparedto patients on an AChEI alone on the study's primary endpoints ofcognition and function . The primary endpoints were the SevereImpairment Battery (SIB), a measure of cognition, and theAlzheimer's Disease Cooperative Study-Activities of Daily LivingInventory, modified for severe dementia (ADCS-ADLsev), a measureof functionality. The secondary endpoint, the Clinician'sInterview-Based Impression of Change Plus Caregiver Input(CIBIC-Plus), also failed to show statistical significance . There wereno safety issues identified in the study. Further analysis of these datawill be completed in the coming months .

45, News of this shocked the marked . Shares of Forest fell $3 .87 per share , or $8.44

percent, on September 1, 2004, to close at $41 .98 per share .

Post Class Period Statements

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46. On September 7, 2004, Forest announced that it would establish a publicly available ,

on-line Clinical Trial Registry containing summaries of key Forest- sponsored clinical studies

completed since January 1, 2000 for drugs which Forest currently markets . The creation of the

Clinical Trial Registry was a part of an agreement reached with the New York State Attorne y

General .

UNDISCLOSED ADVERSE FACT S

47. The market for Forest's securities was open, well-developed and efficient at al l

relevant times . As a result of these materially false and misleading statements and failures to

disclose, Forest's securities traded at artificially inflated prices during the Class Period. Plaintiff and

other members of the Class purchased or otherwise acquired Forest securities relying upon th e

integrity of the market price of Forest's securities and market information relating to Forest, an d

have been damaged thereby .

48. During the Class Period, defendants materially misled the investing public, thereb y

inflating the p rice of Forest ' s securities , by publicly issuing false and misleading statements and

omitting to disclose material facts necessary to make defendants' statements, as set forth herein, no t

false and misleading. Said statements and omissions were materially false and misleading in that

they failed to disclose material adverse information and misrepresented the truth about the Company,

its business and operations, as alleged herein .

49. At all relevant times, the mate rial misrepresentations and omissions particularized

in this Complaint directly or proximately caused or were a substan tial contributing cause of the

damages sustained by plaintiff and other members of the Class . As described herein, during the

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Class Period, defendants made or caused to be made a series of materially false or misleadin g

statements about Forest's business, prospects and operations . These material misstatements and

omissions had the cause and effect of creating in the market an unrealistically positive assessmen t

of Forest and its business, prospects and operations, thus causing the Company's securities to b e

overvalued and artificially inflated at all relevant times . Defendants' materially false and misleadin g

statements during the Class Period resulted in plaintiff and other members of the Class purchasing

the Company' s securities at artificially inflated prices , thus causing the damages complained o f

herein.

ADDITIONAL SCIENTER ALLEGATION S

50. As alleged herein, defendants acted with scienter in that defendants knew that the

public documents an d statements issued or disseminated in the name of the Company were

materially false and misleading ; knew that such statements or documents would be issued or

disseminated to the investing public ; and knowingly and substantially participated or acquiesced i n

the issuance or dissemination of such statements or documents as primary violations of the federal

securities laws . As set forth elsewhere herein in detail, defendants, by virtue of their receipt o f

information reflecting the true facts regarding Forest, their control over, and/or receipt and/o r

modification of Forest's allegedly materially misleading misstatements and/or their associations with

the Company which made them privy to confidential proprietary information concerning Forest ,

participated in the fraudulent scheme alleged herein .

51 . Defendants knew and/or recklessly disregarded the falsity and misleading nature o f

the information which they caused to be disseminated to the investing public . The ongoing

fraudulent scheme described in this complaint could not have been perpetrated over a substantia l

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period of time, as has occurred, without the knowledge and complicity of the personnel at the highes t

level of the Company, including the Individual Defendants .

Applicability Of Presumption Of Reliance:Fraud-On-The-Market Doctrine

52 . At all relevant times , the market for Forest securities was an efficient market for th e

following reasons, among others :

(a) Forest stock met the requirements for listing, and was listed and actively trade d

on the NYSE, a highly efficient and automated market ;

(b) As a regulated issuer, Forest filed periodic public reports with the SEC and the

NYSE ;

(c) Forest regularly communicated with public investors via established market

communication mechanisms, including through regular disseminations of press releases on th e

national circuits of major newswire services and through other wide-ranging public disclosures, such

as communications with the financial press and other similar reporting services ; and

(d) Forest was followed by several secu rities analysts employed by major brokerage

firms who wrote reports which were distributed to the sales force and certain customers of their

respective brokerage firms . Each of these reports was publicly available and entered the publi c

marketplace .

53 . As a result of the foregoing, the market for Forest securities promptly digested curren t

information regarding Forest from all publicly-available sources and reflected such information i n

Forest's stock price. Under these circumstances, all purchasers of Forest securities during the Clas s

Period suffered similar injurythrough their purchase of Forest securities at artificially inflated prices

and a presumption of reliance applies .

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NO SAFE HARBOR54. The statutory safe harbor provided for forward- looking statements under ce rtain

circumstances does not apply to any of the allegedly false statements pleaded in this complaint .

Many of the specific statements pleaded herein were not identified as "forward- looking statements "

when made. To the extent there were any forward-looking statements, there were no meaningful

cautionary statements identifying important factors that could cause actual results to differ materially

from those in the purportedly forward-looking statements . Alternatively, to the extent that the

statutory safe harbor does apply to any forward-looking statements pleaded herein, defendants are

liable for those false forward- looking statements because at the time each of those forward-lookin g

statements was made, the particular speaker knew that the particular forward-looking statement wa s

false, and/or the forward-looking statement was authorized and/or approved by an executive office r

of Forest who knew that those statements were false when made .

FIRST CLAIMViolation Of Section 10(b) O f

The Exchange Act Against And Rule 10b-SPromulgated Thereunder Against All Defendant s

55 . Plaintiffrepeats and realleges each and every allegation contained above as if fully

set forth herein .

56 . During the Class Period, defendants carried out a plan, scheme and course of conduc t

which was intended to and, throughout the Class Period, did : (i) deceive the investing public,

including Plaintiff and other Class members, as alleged herein ; and (ii) cause Plaintiff and other

members of the Class to purchase Forest securities at artificially inflated prices . In furtherance of

this unlawful scheme, plan and course of conduct, defendants, and each of them, took the actions se t

forth herein .

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57. Defendants (a) employed devices, schemes, and artifices to defraud ; (b) made untrue

statements of material fact and/or omitted to state material facts necessary to make the statements

not misleading; and (c) engaged in acts, practices, and a course of business which operated as a frau d

and deceit upon the purchasers of the Company's securities in an effort to maintain artificially high

market prices for Forest securities in violation of Section 10(b) of the Exchange Act and Rule I Ob-5 .

All defendants are sued either as primary participants in the wrongful and illegal conduct charged

herein or as controlling persons as alleged below .

58. Defendants, individually and in concert, directly and indirectly, by the use, means or

instrumentalities of interstate commerce and/or of the mails , engaged and participated in a

continuous course of conduct to conceal adverse material information about the business, operation s

and future prospects of Forest as specified herein .

59. These defendants employed devices, schemes, and artifices to defraud, while i n

possession of material adverse non-public information and engaged in acts, practices, and a cours e

of conduct as alleged herein in an effort to assure investors of Forest value and performance an d

continued substantial growth, which included the making of, or the participation in the making of ,

untrue statements of material facts and omitting to state material facts necessary in order to make the

statements made about Forest and its business operations and future prospects in the light of th e

circumstances under which they were made, not misleading, as set forth more particularly herein,

and engaged in transactions, practices and a course of business which operated as a fraud and deceit

upon the purchasers of Forest securities during the Class Period.

60 . Each of the Individual Defendants' primary liability, and controlling person liability ,

arises from the following facts : (i) the Individual Defendants were high-level executives and/or

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directors at the Company during the Class Period and members ofthe Company's management team

or had control thereof; (ii) each of these defendants, by virtue of his or her responsibilities and

activities as a senior officer and/or director of the Company was privy to and participated in the

creation, development and reporting of the Company's internal budgets, plans, projections and/or

reports ; (iii) each of these defendants enjoyed significant personal contact and familiarity with the

other defendants and was advised of and had access to other members of the Company's

management team, internal reports and other data and information about the Company's finances,

operations, and sales at all relevant times ; and (iv) each of these defendants was aware of the

Company's dissemination of information to the investing public which they knew or recklessly

disregarded was materially false and misleading .

61 . The defendants had actual knowledge of the misrepresentations and omissions of

material facts set forth herein, or acted with reckless disregard for the truth in that they failed to

ascertain and to disclose such facts, even though such facts were available to them . Such defendants '

material misrepresentations and/or omissions were done knowingly or recklessly and for the purpose

and effect of concealing Forest's operating condition and future business prospects from the

investing public and supporting the artificially inflated price of its securities . As demonstrated by

defendants' overstatements and misstatements of the Company's business, operations and earnings

throughout the Class Period, defendants, if they did not have actual knowledge of the

misrepresentations and omissions alleged, were reckless in failing to obtain such knowledge by

deliberately refraining from taking those steps necessary to discover whether those statements were

false or misleading .

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62. As a result of the dissemination of the materially false and misleading informatio n

and failure to disclose material facts, as set forth above, the market price of Forest securities wa s

artificially inflated during the Class Period . In ignorance of the fact that market prices of Forest' s

publicly-traded securities were artificially inflated, and relying directly or indirectly on the false and

misleading statements made by defendants, or upon the integrity of the market in which the securitie s

trade, and/or on the absence of material adverse information that was known to or recklessl y

disregarded by defendants but not disclosed in public statements by defendants during the Clas s

Period, Plaintiff and the other members of the Class acquired Forest securities during the Clas s

Period at artificially high prices and were damaged thereby.

63 . At the time of said misrepresentations and omissions, Plaintiff and other members

of the Class were ignorant of their falsity, and believed them to be true. Had Plaintiff and the other

members of the Class and the marketplace known the truth regarding the problems that Forest wa s

expe riencing, which were not disclosed by defendants, Plaintiff and other members of the Class

would not have purchased or otherwise acquired their Forest securities, or, if they had acquired suc h

securities during the Class Period, they would not have done so at the artificially inflated price s

which they paid .

64 . By virtue of the foregoing, defendants have violated Section 10(b) of the Exchange

Act, and Rule I Ob-5 promulgated thereunder.

65 . As a direct and proximate result of defendants' wrongful conduct, Plaintiff and th e

other members ofthe Class suffered damages in connection with their respective purch ases and sales

of the Company's securities during the Class Period .

SECOND CLAIMViolation Of Section 20(a) Of

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The Exchange Act Against the Individual Defendant s

66. Plaintiff repeats and realleges each and every allegation contained above as if fully

set forth herein.

67 . The Individual Defendants acted as controlling persons ofForest within the mean ing

of Section 20(a) of the Exchange Act as alleged herein . By virtue of their high-level positions, and

their ownership and contractual rights, participation in and/or awareness of the Company' s

operations and/or intimate knowledge of the false financial statements filed by the Company with

the SEC and disseminated to the investing public, the Individual Defendants had the power t o

influence and control and did influence and control, directly or indirectly, the decision-making o f

the Company, including the content and dissemination of the various statements which Plaintiff

contend are false and misleading . The Individual Defendants were provided with or had unlimited

access to copies of the Company's reports, press releases, public filings and other statements allege d

by Plaintiff to be misleading prior to and/or shortly after these statements were issued and had the

ability to prevent the issuance of the statements or cause the statements to be corrected .

68, In particular, each of these defendants had direct and supervisory involvement in the

day-to-day operations of the Company and, therefore, is presumed to have had the power to contro l

or influence the particular transactions giving rise to the securities violations as alleged herein, an d

exercised the same .

69 . As set forth above, Forest and the Individual Defendants each violated Section 10(b )

and Rule 1 Ob-5 by their acts and omissions as alleged in this Complaint . By virtue of their positions

as controlling persons, the Individual Defendants are liable pursuant to Section 20(a) of th e

Exchange Act . Asa direct and proximate result of defendants' wrongful conduct, Plaintiff and other

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members of the Class suffered damages in connection with their purchases of the Company' s

securities during the Class Period.

WHEREFORE , Plaintiff prays for relief and judgment, as follows :

(a) Determining that this action is a proper class action, designating Plaintiff as Lead

Plaintiff and certifying Plaintiff as a class representative under Rule 23 of the Federal Rules of Civi l

Procedure and Plaintiff' s counsel as Lead Counsel ;

(b) Awarding compensatory damages in favor of Plaintiff and the other Clas s

members against all defendants , jointly and severally, for all damages sustained as a result o f

defendants' wrongdoing, in an amount to be proven at trial, including interest thereon;

(c) Awarding Plaintiff and the Class their reasonable costs and expenses incurred in

this action, including counsel fees and expert fees ; and

(d) Such other and further relief as the Court may deem just and proper .

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JURY TRIAL DEMANDED

Plaintiff hereby demands a trial by jury .

Dated :By:BRODSKY & SMITH, LLCEvan J . Smith, EsquireMarc L. Ackerman, Esquire240 Mineola BoulevardMineola, NY 1150 1(516) 741-497 7

SCHIFFRIN & BARROWAY, LLPMarc A. Topaz, EsquireRichard A. Maniskas, Esquir eTamara Skvirsky, Esquire280 King of Prussia Road,Radnor , PA 19087(610) 667-770 6

Attorneys for Plaintiff

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