) plummeted 17.09% on the news that the Connecticut Attorney
General has issued a subpoena related to the pricing of its generic
version of the cardiovascular drug Lanoxin (digoxin). The drug is
marketed for treating mild-to-moderate heart failure in adults. It
increases left ventricular ejection fraction and improves heart
Lannett stated in its press release that the AG's office is
conducting an enquiry as to whether there was anyone responsible
for the fixing, maintaining or controlling the price of the
According to the subpoena, the office is also enquiring whether
there were attempts aimed at allocating and dividing customers or
territories pertaining to the sale of digoxin, not in accordance
with the Connecticut antitrust law. Lannett however stated
that its actions pertaining to the drug were in line with the
applicable laws. It will lend full support to the investigations.
The receipt of the subpoena is a setback for the stock since it
derives a substantial portion of its revenues from the sale of
cardiovascular drugs. We expect investor focus to remain on updates
regarding the investigations on the cardiovascular drug.
We remind investors that Lannett reported encouraging results in
the third quarter of fiscal 2014 (ended Mar 31, 2014) earlier in
the year on the back of strong sales driven by increased demand.
The company expects net sales in fiscal 2014 in the range of $261
million to $267 million.
Lannett carries a Zacks Rank #3 (Hold). Better-ranked stocks in
the health care sector include
The Medicines Company
), each carrying a Zacks Rank #1 (Strong Buy).
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