Lannett Company, Inc.
) shares, which had gained slightly after the company issued a
press release on the utilization of digoxin, saw its shares falling
4.3% in the subsequent trading session. Overall, shares are down
3.6% since the company's announcement.
Concerns regarding digoxin surfaced following the publication of an
abstract in the
Journal of the American College of Cardiology
(JACC). According to the abstract, digoxin was associated with a
potential increase in the risk of mortality in patients with newly
diagnosed atrial fibrillation. Lannett said that it does not expect
the findings to have a major impact on digoxin prescriptions until
a more effective alternative medication becomes available in the
market. Digoxin currently represents less than 10% of Lannett's net
Meanwhile, the company is working on diversifying its portfolio by
developing products internally, forming strategic alliances and
acquiring products from other companies. The company intends to
purchase the abbreviated new drug applications (ANDAs) for two
products − estradiol tablets and selegiline hydrochloride capsules.
Lannett has not disclosed the name of the seller and the financial
terms of the deal.
Earlier this week, Lannett had announced preliminary fourth-quarter
fiscal 2014 results − the company expects earnings per share in the
range of 60 cents − 64 cents. Net sales are expected to be $81
million, projecting a 101.5% increase from the year-ago quarter.
The Zacks Consensus Estimate for net sales is $75 million.
For fiscal 2014, Lannett expects net sales of nearly $274 million
(previous guidance: $261 million − $267 million) and earnings per
share in the range of $1.94 − $1.98. Lannett will report fiscal
2014 results on Aug 27 after market close.
Since digoxin is not one of the top five products at Lannett and
accounts for less than 10% of the company's revenues, any
deterioration in its performance should not hurt the top-line to a
large extent. However, we expect investor focus to remain on future
updates from the company on digoxin.
Lannett carries a Zacks Rank #2 (Buy). Investors looking for
well-positioned stocks in the health care sector may consider Endo
International plc (
), Mallinckrodt plc (
) and AstraZeneca plc (
). While Endo and Mallinckrodt carry a Zacks Rank #1 (Strong Buy),
AstraZeneca holds a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
MALLINCKRODT PL (MNK): Free Stock Analysis
LANNETT INC (LCI): Free Stock Analysis Report
ASTRAZENECA PLC (AZN): Free Stock Analysis
ENDO INTL PLC (ENDP): Free Stock Analysis
To read this article on Zacks.com click here.