Is anyone following Lannett Company Inc (LCI) ?

[tiedyed1]

Lannett Corporation is a generic drug company.
I like these businesses and in the past this forum enjoyed profits from Perrigo (PRGO), another large generic drug company.
LCI was also a member of the most recent Mr. Market Margaritaville Data Dump.

Lannett came onto my radar early this week from a pay service recommendation and I liked the fundamentals and nature of the business.
What no one expected was for the company to receive a CT AG subpoena for information on the pricing and territory distribution of one of its drugs.

The stock went from $47.50 down to $38.50 , down $9 (almost 19%) upon this news.

I am still conducting my due diligence, but my gut is feeling a huge overreaction here.
The drug being questioned, Digoxin, makes up 8-9% of LCI's annual sales.
The questions are regarding pricing (and not regarding a drug that needs to be pulled from the market) and LCI has promptly replied that there was no price fixing and are fully cooperating with the AG inquiry.
This action in general will keep the stock price depressed for a while, but once this matter gets sifted and worked out the company is still a solid company warranting a higher stock price.

Anyone else looking at this?
Hoping to hear others take and chime in.

Thanks; -Adam
Old Hippy & Mortgage Pro

[mrmarket]

Lannett Corporation is a generic drug company.
I like these businesses and in the past this forum enjoyed profits from Perrigo (PRGO), another large generic drug company.
LCI was also a member of the most recent Mr. Market Margaritaville Data Dump.

Lannett came onto my radar early this week from a pay service recommendation and I liked the fundamentals and nature of the business.
What no one expected was for the company to receive a CT AG subpoena for information on the pricing and territory distribution of one of its drugs.

The stock went from $47.50 down to $38.50 , down $9 (almost 19%) upon this news.

I am still conducting my due diligence, but my gut is feeling a huge overreaction here.
The drug being questioned, Digoxin, makes up 8-9% of LCI's annual sales.
The questions are regarding pricing (and not regarding a drug that needs to be pulled from the market) and LCI has promptly replied that there was no price fixing and are fully cooperating with the AG inquiry.
This action in general will keep the stock price depressed for a while, but once this matter gets sifted and worked out the company is still a solid company warranting a higher stock price.

Anyone else looking at this?
Hoping to hear others take and chime in.

Thanks; -Adam
Old Hippy & Mortgage Pro

It's been in 5 of my data dumps this year. Earnings growth looks great but chart looks like wet blanket right now. Don't know why, but sometimes I get suspicious as everyone who is selling can't be stupid.

[tiedyed1]

Yes, the chart is troublesome as the masses took the stance that LCI has done something wrong after receiving an AG subpoena for information. The stock price tanked on this news and then the blood sucking attorneys looking for class action suits jumped on board with nothing supporting any wrongdoing.

I have yet to find anything supporting this negative speculation and that non conformist in me wants to wave my rebel flag and say those who sold were not making a good move.

The only news from the company lately was today:

Lannett Company, Inc. (LCI) today announced that it has received approval from the U.S. Food and Drug Administration (FDA) of its Abbreviated New Drug Application (ANDA) for Oxycodone Hydrochloride Capsules, 5 mg, the therapeutic equivalent to the reference listed drug, Oxycodone Hydrochloride Capsules, 5 mg, of Lehigh Valley Technologies, Inc. According to IMS, for the year ended June 2014 total sales of Oxycodone Hydrochloride Capsules, 5 mg, at Average Wholesale Price (AWP) were approximately $7.1 million. The company expects to commence shipping the product in the coming months.

“Oxycodone Hydrochloride Capsules, 5 mg, represents our third product approved by the FDA thus far in 2014, and, importantly, adds to our goal of vertical integration,” said Arthur P. Bedrosian, president and chief executive officer of Lannett. “We hope to receive additional product approvals in the near future while we continue to develop our robust pipeline.”

I am not saying back up the truck, but remain bullish and feel this stock is undervalued and provides a buying opportunity here.

-Adam
Old Hippy & Mortgage Pro