Lannet's Generic Fioricet Approved

Lannett Company, Inc. ( LCI - Snapshot Report ) recently announced that the US Food and Drug Administration (FDA) granted approval to the company’s abbreviated new drug application (ANDA) for its generic version of Watson Pharmaceuticals Inc.’s ( ) Fioricet (butalbital, acetaminophen and caffeine) tablets (50 mg, 325 mg and 40 mg).

Fioricet is currently approved for the relief of tension headache. Lannett intends to start shipping its generic version in October 2012.

As per IMS Health, total sales at average wholesale price (AWP) of butalbital, acetaminophen and caffeine tablets amounted to approximately $30 million for the twelve months ended July 31, 2012. Out of the total sales of $30 million, $15 million was recorded from sales of branded Fioricet.

We note that this is not the company’s first approved generic associated with tension headache. Previously, the company had gained approval for the generic version of Watson Pharma’s Fiorinal (butalbital, aspirin and caffeine capsules), which it distributes currently.

Lannett specializes in the manufacturing, packaging, marketing and distribution of generics. Lannett has generics for the treatment of a wide range of diseases like obesity, thyroid, and hypertension, among others.

Other generic launches at Lannett Company include Watson Pharma’s diuretic drug, Microzide and GlaxoSmithKline’s ( GSK - Analyst Report ) Diyazide.

We remind investors that the company currently has several pending applications with the FDA, which includes quite a few candidates targeting large markets.

In the last two fiscal years, Lannett has received approval for ten ANDAs from the FDA. The company also expects to receive several more approvals in the current fiscal year.

Our Recommendation

Currently, we have a Neutral recommendation on Lannet Company, Inc. The stock carries a Zacks #3 Rank (short-term Hold rating).