Back to top

Analyst Blog

Lannett Company, Inc. (LCI - Snapshot Report) recently extended its contract with Jerome Stevens Pharmaceuticals, Inc. for the exclusive distribution of Jerome Stevens’ Butalbital, Aspirin, Caffeine with Codeine Phosphate capsules USP, Digoxin tablets USP and Levothyroxine Sodium tablets USP in the U.S.

The agreement, which was due to expire in Mar 2014, is now extended for another five years. Moreover, Lannett and Jerome Stevens have agreed to mutually discuss the extension of the agreement for five more years up to Mar 2024.

We note that in Mar 2004, Lannett inked a 10-year deal with Jerome Stevens for the exclusive distribution rights in the U.S. to products in the latter’s portfolio, in lieu of 4,000 shares of Lannett’s common stock. The minimum purchase quantity as per the deal for the first year was $15,000, which increased by $1,000 every year after that.

For the tenth year of the agreement, the minimum quantity is expected to be $24,000. So far, Lannett has successfully met the minimum purchase requirement of the contract. On the other hand, Jerome Stevens has the option to terminate the agreement if Lannett fails to meet the minimum purchase requirement of the contract.

Lannett stated in its press release that the products under the contract contributed around $250 million to the company’s gross profit in 10 years. Moreover, the purchase of the products exceeded the initial targets.

Lannett currently carries a Zacks Rank #3 (Hold). Other players like Actelion (ALIOF), Biogen Idec Inc. and Gilead Sciences, Inc. (GILD - Analyst Report) currently look more attractive in the pharma space with a Zacks Rank #1 (Strong Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%