Lannett Company, Inc.

For fiscal Q2 2023, net sales were $80.9 million versus $86.5 million in the prior-year quarter and $75.1 million in Q1 2023. Gross profit increased to $15.7 million, or 19% of net sales, from $9.7 million, or 11%, a year ago. Net loss narrowed to $14 million, or $0.34 per share, from $15.9 million, or $0.39 per share, and adjusted EBITDA was positive $1 million. At quarter-end, cash and cash equivalents were approximately $56 million, including an approximately $19 million tax refund, and total debt was approximately $659.4 million. Full-year FY2023 guidance was raised to net sales of $285 million to $305 million, adjusted gross margin of approximately 17% to 19%, adjusted R&D of $21 million to $23 million, adjusted SG&A of $61 million to $63 million, adjusted interest expense of approximately $53 million, adjusted effective tax rate of 20% to 22%, adjusted EBITDA of negative $5 million to positive $1 million, and capex of $8 million to $10 million.

Tim Crew said results in the first half of fiscal 2023 exceeded expectations, helped by stabilization in the base business after a difficult and competitive period. He emphasized that the company is pushing ahead on biosimilar insulin and respiratory programs, with glargine still on track for top-line data this quarter and a BLA filing around mid-year, and aspart following with later milestones. He also framed the restructuring and outsourced R&D model as a way to lower fixed costs while maintaining direct investment in pipeline development.

John Kozlowski highlighted the main financial drivers: Q2 net sales of $80.9 million, gross profit of $15.7 million at 19% margin, net loss of $14 million, and positive adjusted EBITDA of $1 million. He said cash was about $56 million at December 31, 2022, boosted by the roughly $19 million tax refund, while total debt was about $659.4 million. He also quantified the restructuring benefits as about $11 million in annualized savings and estimated the outsourced R&D transition would preserve $5 million to $8 million of liquidity over the next 18 to 24 months.

There was no analyst Q&A in the transcript, so the most notable discussion came from management’s prepared remarks and the follow-up summary. The main concerns addressed were competition, FDA timing, and execution risk on the pipeline and launches; management said it continues to assume new competitors for some products even where they have not yet appeared. They also noted FDA-related delays for some respiratory products, including additional responses to a CRL and a possible later launch for Sucralfate.