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Lannett Announces Preliminary Fiscal 2017 Fourth-Quarter And Full-Year Financial Results, Comments On Fiscal 2018 Outlook

"While our industry is currently facing challenges, Lannett is strong and we have put in place a number of initiatives to position the company for long-term growth," said Arthur Bedrosian, chief executive officer of Lannett. "Approximately 80% of our marketed products continue to be in the top three in terms of market share and we are on track to submit a New Drug Application for our proprietary C-Topical product shortly. In addition, we are expanding our pain management capabilities to include the development of innovative Active Pharmaceutical Ingredients (APIs) for the treatment of pain and addiction, as well as the sale of APIs to compounding pharmacies. And, finally, our plans include entry into the veterinary pharmaceutical market.

"During the fiscal 2017 fourth quarter, unusual items affected our expected financial results, including, among others, a $3.8 million write-off of inventory related to the delay of an anticipated approval for a Kremers Urban (KU) patch product, higher than expected impact of the Medicaid's Inflation-Adjusted Rebate program and a high level of returns of expired Methylphenidate ER previously sold to CVS, a KU customer. Combined, the unusual items impacted our adjusted earnings by approximately $0.24 per diluted share. Additionally, pricing and volume pressures that impacted a number of products in our fiscal third quarter continued into the first month of our fiscal fourth quarter. We took steps to address these factors, and, as a result, our sales and gross margins returned to normalized levels in the latter part of the fourth quarter.

"On a brighter note, for fiscal 2018 we expect a solid increase to our topline compared with fiscal 2017 and adjusted gross margin to continue to be above 50%, which exceeds the average of peer companies. Our confidence is based on actual improvements to our core business, as well as the expected launch of 10 already approved products in the coming fiscal year. We continue to anticipate a significant number of product approvals from our ANDAs filed at the FDA. As is our practice, our outlook does not include sales of products pending approval at the FDA nor does it include any benefit from our strategic alliances."

Commenting on the company's debt financial covenants, Bedrosian said, "Based on our preliminary...