Lannett Sinks On Safety, Pricing Worries Over Generic Heart Drug
Lannett (NYSE: LCI) shares fell nearly 11 percent after an analyst downgraded the stock on worries that sales of its generic heart drug digoxin may decline on safety concerns and pricing.
Craig-Hallum cut its rating on Lannett to Hold from Buy, maintaining a $40 target.
A recent study warned that the widely prescribed drug appeared to shorten the lives of patients with a common type of irregular heart beat called atrial fibrillation.
The drug accounts for about 20 percent of Lannett's sales, which totaled $151 million last year. Digoxin is offered by a number of manufacturers under more than two dozen trade names.
Regarding pricing concerns, Lannett was served with a subpoena from Connecticut Attorney General George Jepsen last month concerning an investigation into digoxin price-fixing and other anti-trust violations.
News of the digoxin safety study appeared August 6 in the New York Times. Full results were published by The Journal of the American College of Cardiology.
The study involved 100,000 people with atrial fibrillation. Subjects taking digoxin were 20 percent more likely to die over a period of several years than those who weren't.
Lannett rose more than eight percent Monday after it forecast higher-than-expected fiscal fourth-quarter profits and revenue.
But on Tuesday afternoon shares traded recently at $35.42 per share, down 12.3 percent.
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