Q4 Business and Financial Highlights:
Net Sales were $74.2 Million
Adjusted Gross Margin Better than Expected, Improved vs Q3
Cash Was $88 Million at June 30
Completed Major Elements of November 2021 Restructuring Plan
Pipeline Updates:
Pivotal Biosimilar Insulin Glargine Clinical Trial Over 90% Complete, Top-line Results Anticipated by Year End; BLA Filing On Track for First Half of 2023
Expect to File IND for Biosimilar Insulin Aspart by First Half of 2023
Generic FLOVENT® DISKUS® Product On Track for ANDA Filing Early Next Calendar Year, Granted CGT Status by FDA
Expect Partner to Commence Pilot PK Trials for Generic Spiriva® Handihaler® by Year End 2022
Licensed a Filed ANDA for Mesalamine Delayed Release Tablets USP, 1.2 g, from an Existing Partner
Expect to Launch At Least Four Non-Solid Oral Generic Products With Limited Competition in Fiscal 2023
TREVOSE, Pa., Aug. 24, 2022 /PRNewswire/ -- Lannett Company, Inc. (NYSE: LCI) today reported financial results for its fiscal 2022 fourth quarter and full year ended June 30, 2022.
"For the quarter, net sales were in line with our expectations, adjusted EBITDA was at the top end of our guidance range and adjusted gross margin was better than anticipated, rebounding from our adjusted gross margin in recent quarters," said Tim Crew, chief executive officer of Lannett. "Our cash position was approximately $88 million at June 30, 2022; we continue to expect to receive sizable income tax refunds within the next couple of months.
"With regard to our pipeline, we have added several near-term product opportunities, of which a few have the potential to be meaningful contributors to our financial results, especially in the second half of the current fiscal year. Our durable large market partnered product opportunities continue to progress and achieve notable development milestones (details discussed below). As part of our pre-launch activities for biosimilar insulin, we have initiated preliminary discussions with a number of states and other organizations around initiatives and programs to make insulin more accessible and affordable to millions of patients. We welcome these initiatives and believe our significant scale and competitive cost structure will help position us to support and prosper from these initiatives on affordable insulin.
"Looking ahead, our efforts will be focused on commercializing recently added product opportunities, which we believe will help increase our full-year gross margin in fiscal 2023. At the same time, we intend to maintain operating discipline to reduce expenses and make the most of our cash resources, all while working to further develop with our partners our high value pipeline of insulin and respiratory products, expand our existing strategic alliances and form new ones."
Key Pipeline Update Subject to FDA Approval
Company anticipates launching over the next several months Zolmitriptan, a nasal spray product for migraine and cluster headaches, and Fludarabine, an injectable product currently in short supply;
By the end of the current fiscal year, the company anticipates launching Sucralfate, an oral suspension product, and two additional partnered products. Sevoflurane, an inhaled anesthetic product, and Mesalamine Delayed Release Tablets 1.2 gram;
Biosimilar insulin glargine. More than 90% of the subject enrollment goal has been achieved and the pivotal clinical trial for biosimilar insulin glargine is expected to be completed next month. Thus far no serious adverse events have been reported. Top-line results are expected toward the end of this calendar year, and 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;
Biosimilar insulin aspart: The company's partner is producing insulin aspart at commercial scale and will be requesting a Type 2 meeting with the FDA later this 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 spring of calendar 2024. The company anticipates a potential launch of the product in the middle of calendar year 2025;
Generic ADVAIR DISKUS®, fluticasone propionate and salmeterol inhalation powder, remains on priority review. The company anticipates fully responding to the CRL next year, with a launch possible in 2024.
Generic Flovent Diskus®, fluticasone propionate inhalation powder: the pivotal clinical end-point study and PK trials for the 100 mcg/blister were successfully completed in the first attempt. The FDA has granted the company's request for CGT status and the filing of the ANDA is estimated for earlier next calendar year;
Company expects its partner to commence a pilot PK study of generic Spiriva® Handihaler® by year end and is targeting an ANDA filing by early 2024.
Restructuring, Cost Reduction Initiatives
The major elements of the company's restructuring plan announced in November 2021 have been completed. The transfer of certain products from the company's recently sold Carmel plant to its main plant is progressing on schedule and the manufacturing of Lannett labeled product at that site will largely be completed by the end of this calendar year.
Fourth-Quarter Financial Results: Fiscal 2022 vs Fiscal 2021
GAAP basis:
Net sales were $74.2 million compared with $106.0 million
Gross profit was $7.9 million, or 11% of net sales, compared with $22.7 million, or 21% of net sales
Asset impairment charges were $53.9 million compared with $18.6 million
Net loss was $93.3 million, or $2.30 per share, compared with $177.9 million, or $4.50 per share
Non-GAAP basis:
Net sales were $74.2 million compared with $106.0 million
Adjusted gross profit was $10.4 million, or 14% of net sales, compared with $26.4 million, or 25% of net sales
Adjusted interest expense increased to $13.1 million from $12.1 million
Adjusted net loss was $17.8 million, or $0.44 per share compared with $7.4 million, or $0.19 per share
Negative adjusted EBITDA was $1.3 million versus adjusted EBITDA of $12.1 million
Full-Year Financial Results: Fiscal 2022 vs Fiscal 2021
GAAP basis:
Net sales were $340.6 million compared with $478.8 million
Gross profit was $33.2 million, or 10% of net sales, compared with $75.6 million, or 16% of net sales
Restructuring expenses were $2.8 million compared with $4.0 million
Asset impairment charges were $103.3 million compared with $216.6 million
Net loss was $231.6 million, or $5.74 per share, compared with $363.5 million, or $9.23 per share
Non-GAAP basis:
Net sales were $340.6 million compared with $478.8 million
Adjusted gross profit was $50.0 million, or 15% of net sales, compared with $122.3 million, or 26% of net sales
Adjusted interest expense increased to $51.7 million from $43.7 million
Adjusted net loss was $61.0 million, or $1.51 per share, compared with $1.0 million, or $0.03 per share
Guidance for Fiscal 2023
Based on its current outlook, the company provided guidance for fiscal year 2023, as follows:
*A reconciliation of Adjusted amounts to most directly comparable GAAP amounts can be found in the financial tables following this release.
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 2022 fourth quarter and full year ended June 30, 2022. The conference call will be available to interested parties by dialing 877-407-9716 from the U.S. or Canada, or 201-493-6779 from international locations. The call will be broadcast via the Internet at . 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.
Lantus® is a registered trademark of Sanofi S.A., and ADVAIR DISKUS® and Flovent® Diskus® are registered trademarks of GlaxoSmithKline. Spiriva® Handihaler® is a registered trademark of Boehringer Ingelheim.
About Lannett Company, Inc.:
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 .
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.
FINANCIAL SCHEDULES FOLLOW
Company Codes: NYSE:LCI
