Lannett restructures, cuts jobs

Lannett is taking steps to restructure and to substantially reduce costs in part to mitigate the impact of competitive pricing pressure, including the Food and Drug Administration's recent approval of Amneal's generic fluphenazine. Lannett said that it is consolidating its research and development function into a single location in Philadelphia and lowering operating costs.

The company's workforce will be reduced by approximately 80 positions, equal to approximately 8.5% of the company's total number of employees. The company said that it expects these actions to result in cost savings in excess of $15 million annually.

"Our goal is to proactively strengthen our business by enhancing our manufacturing efficiencies and improving our cost structure," said Tim Crew, Lannett CEO. "For the coming year, we expect to grow our topline, driven by a solid pace of new product introductions, as we have done over the past couple of years. In our recently completed fiscal 2020 fourth quarter, we launched six new products, which have already secured customer awards of approximately $15 million."

Crew added,"At the same time, we had expected pricing pressure in fiscal 2021 on certain key products, including generic fluphenazine, currently our largest revenue product and one that has higher than average gross margins. A competitor has recently received approval for this product and we believe will launch shortly. We implemented the restructuring and cost-savings plan, in part, to mitigate the impact of competitive pricing pressure."

The company said the majority of the affected positions are based at its Seymour, Indiana plant. Most of the reductions are effective as of today. "This is a difficult but necessary move for the company," Crew said. "The people of Lannett dedicate themselves to the business, and we appreciate all of their contributions."

The company said that affected employees will receive severance and other benefits.

Crew added that the company is on pace to submit an ANDA for generic of GlaxoSmithKline's’ Advair DISKUS, a partnered product, before the end of the current calendar year. Pharmacokinetic studies for the product, which were delayed due to COVID-19, have resumed.