Barr Pharma shares drop after guidance cut, downgrade

The stock fell $11.65, or 23.5 percent, to $38 in afternoon trading. Shares hit their lowest point in more than three years earlier in the trading session, falling to $37.40.

"Given challenges, we think recovery could take time with multiple headwinds emerging from the first quarter," said Goldman Sachs analyst Randall Stanicky, downgrading the stock to "Neutral" from "Buy".

In a note to investors, Stanicky said the lower guidance appears to be influenced by a mix of weak U.S. generic sales, lower sales of contraceptives, and higher research and development costs.

Earlier in the day, the Montvale, N.J.-based company reported its first-quarter profit doubled, but generic contraceptive sales declined. Overall results missed Wall Street forecasts.

The decline in contraceptive sales prompted the company to reduce its full-year guidance to a range of $2.75 to $3.05 per share, from a previous forecast of $3.05 to $3.35 per share. The company forecast revenue between $2.7 billion and $2.8 billion.

Analysts polled by Thomson Financial forecast earnings of $3.27 per share on revenue of $2.78 billion.