LANNETT REPORTS BETTER THAN EXPECTED FINANCIAL RESULTS FOR FISCAL 2023 FIRST-QUARTER; REITERATES FULL-YEAR GUIDANCE

02 Nov 2022
www.prnewswire.com
Financial StatementBiosimilarLicense out/inCollaborate
Q1 Business and Financial Highlights:
Net Sales were $75.1 Million
Gross Margin 17%, Adjusted Gross Margin 18%
Net Sales, Gross Margin and Adjusted Gross Margin Increased from Preceding Quarter
Cash Was $78 Million at September 30
Sold Several Discontinued ANDAs for Approximately $3 Million
Pipeline Updates:
Completed Dosing of Subjects in the Pivotal Biosimilar Insulin Glargine Clinical Trial, Top-line Results Anticipated by Year End; BLA Filing On Track for First Half of 2023;
Generic FLOVENT®
ANDA Filing Anticipated Spring of Next Year, Earlier Granted CGT Status by FDA
TREVOSE, Pa., Nov. 2, 2022 /PRNewswire/ -- Lannett Company, Inc. (NYSE: LCI) today reported financial results for its fiscal 2023 first quarter ended September 30, 2022.
"For the quarter, our financial results improved compared with the preceding quarter and were better than expected, with higher product sales across the portfolio and adjusted gross margin exceeding our estimates," said Tim Crew, chief executive officer of Lannett. "This performance was in part driven by increased sales of generic Adderall in response to a market shortage where we were able to maintain supply, the sale, at a better than company average gross margin, of certain products under a private label agreement, a continuing normalization of our product return rates and, a more favorable pricing environment than we anticipated. Our cash position was approximately $78 million at September 30, 2022; we continue to expect to receive approximately $20 million of income tax refunds within the next couple of months.
"Turning to our pipeline, several product opportunities are nearing launch, subject to approval, in the current fiscal year, a few of which have the potential to be meaningful contributors to our financial results. For both our biosimilar insulin glargine and biosimilar insulin aspart products, timelines remain largely on track.
"Looking ahead, while we have reiterated our full-year guidance, we now believe our adjusted gross margin will be nearer the top end of the range. We remain focused on commercializing product opportunities, further growing our contract manufacturing business and advancing our high-value pipeline of insulin and respiratory products."
Key Pipeline Update Subject to FDA Approval
Over the course of the current fiscal year, the company continues to anticipate launching four notable products with respect to potential value Sucralfate, an oral suspension product, and three additional partnered products: Fludarabine, an injectable product currently in short supply, Sevoflurane, an inhaled anesthetic product, and Mesalamine Delayed Release Tablets 1.2 gram;
Dosing of subjects in the pivotal trial of healthy human volunteers for biosimilar insulin glargine has been completed, with no reported serious adverse events. Initial results from the trial are expected next month. The filing of the Biologics License Application (BLA) is anticipated next Spring, and thus a potential launch of the product in the first half of calendar year 2024;
The company's partner is producing biosimilar insulin aspart at commercial scale and the company expects to request a Type 2 meeting with the FDA in January of next calendar year. An IND filing is anticipated for later this fiscal year. The company estimates initiating the clinical study next summer and completing the study in the first half of calendar 2024. The company anticipates a potential launch of the product in calendar year 2025;
For generic ADVAIR DISKUS®, the company responded to the CRL last month and anticipates additional responses to another CRL next year, with a launch possible in 2024;
Generic Flovent Diskus®. The FDA earlier granted the company's request for CGT status and the filing of the ANDA is estimated for next calendar year;
Generic Spiriva® Handihaler®. The company expects that its partner will commence a pilot PK study by early next year.
First-Quarter Financial Results: Fiscal 2023 vs Fiscal 2022
GAAP basis:
Net sales were $75.1 million compared with $101.5 million
Gross profit was $12.6 million, or 17% of net sales, compared with $16.5 million, or 16% of net sales
Asset impairment charges were $4.7 million compared with $0 million
Net loss was $28.0 million, or $0.68 per share, compared with $22.3 million, or $0.56 per share
Non-GAAP basis:
Net sales were $75.1 million compared with $101.5 million
Adjusted gross profit was $13.8 million, or 18% of net sales, compared with $20.6 million, or 20% of net sales
Adjusted interest expense increased to $13.3 million from $12.8 million
Adjusted net loss was $17.1 million, or $0.42 per share compared with $10.6 million, or $0.27 per share
Adjusted EBITDA was $0.3 million versus adjusted EBITDA of $10.0 million
Guidance for Fiscal 2023
Based on its current outlook, the company reiterated guidance for fiscal year 2023, as follows:
Conference Call Information and Forward-Looking Statements
Later today, the company will host a conference call at 4:30 p.m. ET to review its results of operations for its fiscal 2023 first quarter ended September 30, 2022. The conference call will be available to interested parties by dialing 855-327-6837 from the U.S. or Canada, or 631-891-4304 from international locations. The call will be broadcast via the Internet at www.lannett.com. Listeners are encouraged to visit the website at least 10 minutes prior to the start of the scheduled presentation to register, download and install any necessary audio software. A playback of the call will be archived and accessible on the same website for at least three months.
Discussion during the conference call may include forward-looking statements regarding such topics as, but not limited to, the company's financial status and performance, regulatory and operational developments, and any comments the company may make about its future plans or prospects in response to questions from participants on the conference call.
Use of Non-GAAP Financial Measures
This release contains references to non-GAAP financial measures, including Adjusted EBITDA, which are financial measures that are not prepared in conformity with United States generally accepted accounting principles (U.S. GAAP). Management uses these measures internally for evaluating its operating performance. The company's management believes that the presentation of non-GAAP financial measures provides useful supplementary information regarding operational performance, because it enhances an investor's overall understanding of the financial results for the company's core business. Additionally, it provides a basis for the comparison of the financial results for the company's core business between current, past and future periods. The company also believes that including Adjusted EBITDA and the other non-GAAP financial measures presented in this release is appropriate to provide additional information to investors. Non-GAAP financial measures should be considered only as a supplement to, and not as a substitute for or as a superior measure to, financial measures prepared in accordance with U.S. GAAP.
Detailed reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the financial tables following this release.
Non-GAAP financial measures exclude, among others, the effects of (1) amortization of purchased intangibles and other purchase accounting entries, (2) restructuring expenses, (3) asset impairment charges, (4) non-cash interest expense, as well as (5) certain other items considered unusual or non-recurring in nature.
ADVAIR DISKUS® and Flovent® Diskus® are registered trademarks of GlaxoSmithKline. Spiriva® Handihaler® is a registered trademark of Boehringer Ingelheim.
Lannett Company, founded in 1942, develops, manufactures, packages, markets and distributes generic pharmaceutical products for a wide range of medical indications – see financial schedule below for net sales by medical indication. For more information, visit the company's website at www.lannett.com.
Cautionary Statement Regarding Forward-Looking Statements
This release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts and can be identified by the words "estimate," "expect," "believe," "target," "anticipate" and other similar expressions. Any such statements, including, but not limited to, statements regarding the company's competitive environment and other market conditions; regulatory and operational developments; the timing related to commencing and successfully completing the pivotal clinical trials, filing the Biologics License Applications, and successfully launching any products, including biosimilar insulin glargine and biosimilar insulin aspart; the potential material impact of COVID-19 on future financial results; the timing of the company's restructuring plan and its ability to realize estimated cost reductions and other benefits therefrom; the company's financial status and performance; and the company's ability to achieve the financial metrics stated in the company's guidance for fiscal 2023, whether expressed or implied, are subject to risks and uncertainties which can cause actual results to differ materially from those currently anticipated due to a number of factors beyond the company's control. Such factors include, but are not limited to, the difficulty in predicting the timing or outcome of FDA or other regulatory approvals or actions, the ability to successfully commercialize products upon approval, including acquired products, and the company's estimated or anticipated future financial results, future inventory levels, future competition or pricing future levels of operating expenses, product development efforts or performance, and other risk factors discussed in the company's latest Form 10-K, subsequent Form 8-Ks and 10-Qs and other documents filed with the Securities and Exchange Commission from time to time. You should not place undue reliance upon any such forward-looking statements, which represent the company's judgment as of the date of this release. To the fullest extent permitted by law, the company disclaims any intent or obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
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