This morning generic drug maker Lannett Company Inc. (LCI:NYSE.MKT) announced that it has entered into an agreement with Sinotherapeutics Inc., a China-based specialty pharmaceutical company, to be the exclusive U.S. distributor of Posaconazole Delayed-Release Tablets 100mg. Sinotherapeutics has received final approval from the U.S. Food and Drug Administration (FDA) of its Abbreviated New Drug Application (ANDA) for Posaconazole Delayed-Release Tablets 100mg, which is an AB-rated generic equivalent of Merck's Noxafil Delayed-Release Tablets. Lannett expects to commence shipping the product shortly. Posaconazole belongs to a class of drugs known as azole antifungals and is used to prevent certain fungal infections in patients who have severely weakened immune systems.
According to IQVIA, the brand product's annual U.S. sales were approximately $325 million for the twelve months ended June 2019. Under the agreement, Lannett will make milestone payments based on market dynamics and performance. The company will provide sales, marketing and distribution and will receive a share of the profits.
Lannett's CEO Tim Crew commented, "The Sinotherapeutics team is highly skilled at formulating particularly difficult to develop products, such as Posaconazole Delayed-Release Tablets...Given the market dynamics of the product, we expect Posaconazole to be a meaningful contributor to our business."
The notice today comes on the morning after the company reported financial results for its fiscal 2019 fourth quarter and full year ended June 30, 2019.
For Q4/19, on a GAAP basis, the firm reported net sales were $133.8 million compared with $170.9 million for Q4/18. Gross profit was $49.3 million, or 37% of total net sales, compared with $66.5 million, or 39% of Q4/18 total net sales. Operating income in Q4/19 increased to $9.4 million from $8.6 million in Q4/18. Net loss was $7.6 million, or $0.20 per share, compared with $11.4 million, or $0.30 per share, for Q4/18. On a non-GAAP basis, Q4/19 adjusted net income was $14.7 million, or $0.37 per diluted share, compared with $24.5 million, or $0.64 per diluted share for Q4/18.
For full year FY/19, on a GAAP basis, net sales were $655.4 million compared with $684.6 million for FY/18. The firm reported that net loss was $272.1 million, or $7.20 per share, versus net income of $28.7 million, or $0.75 per diluted share, for FY/18. On a non-GAAP basis FY/19 adjusted net income was $91.8 million, or $2.35 per diluted share, compared with $118.2 million, or $3.10 per diluted share, for FY/18.
CEO Tim Crew stated, "We feel positive about our company's future following a number of significant accomplishments. Since January 2018, we have launched 25 products with annualized sales of approximately $100 million, acquired or in-licensed more than 40 ANDAs and paid down approximately $187 million of our outstanding debt, which included $87 million of voluntary payments. In the past year, we have expanded existing strategic alliances and established new ones, and submitted to the FDA nine product applications, all while we implemented and recently completed a net $33 million cost savings plan...Looking ahead, we expect to launch a number of new products that will continue to build our business in the near term and have begun adding products to our pipeline that have significant potential in the medium term and beyond".
The company provided guidance for FY/20 estimating GAAP net sales of $525–545 million and adjusted (non-GAAP) EBITDA of $145–160 million.
Sinotherapeutics, based just outside of Shanghai, lists that it is a specialty pharmaceutical company focused on developing generic products that are of high commercial value and possess high technological barriers. The company is integrated with R&D, regulatory affairs for product registration (FDA and NMPA), clinical supply and commercial manufacturing, and sales and marketing capabilities. The company has successfully developed and launched several controlled and delayed release ANDAs for the U.S. and Chinese markets.
Headquartered in Philadelphia, Penn., Lannett Company develops, manufactures, packages, markets and distributes generic pharmaceutical products for a wide range of medical indications.
LCI shares, which started the day with a 44%, short interest, opened much higher today at $8.25 (+$2.22, +36.82%) over the prior day's closing price of $6.03. Since the open the stock has traded between $7.96 and $8.85 and currently is priced at $8.44 (+2.41, +39.97%).[NLINSERT]
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