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Raymond James: Lannett Emerges From Levothyroxine Woes

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Raymond James: Lannett Emerges From Levothyroxine Woes

Lannett Company, Inc. (NYSE: LCI) announced the amendment of its Senior Secured Credit Facility Term A loan of $275 million, which takes the company a step closer to emerging from debt following the loss of generic levothyroxine, according to Raymond James.

The Analyst

Analyst Elliot Wilbur maintains a Market Perform rating on Lannett.

The Thesis

Although the modification of the original Term A loan doesn’t change the cash outflow profile of principal obligations related to the loan, it “slightly loosen the shackles on the company” and “should afford ample ceiling well through loan maturity in 2020,” Wilbur said in a note. (See his track record here.) 

Lannett’s management projects the company’s adjusted EBITDA for fiscal 2020, or the 12 months ending September 2020, significantly ahead of Street estimates.

The company expects the 16 products that it has launched so far in 2018 to generate $75 million in revenue with margins of 35-40 percent through June 2019. the analyst said.

Further, the company plans to launch another 15-17 products by the end of fiscal 2019. These would mostly be internally developed products with equally high margins and a market value exceeding $5 billion, according to Raymond James. 

The drug gConcerta is likely to be a near-term catalyst, with a GDUFA date of Feb. 1, 2019, Wilbur said.

Sometime next year, more news should arrive from the FDA and the management on Numbrino — topical cocaine — which received a CRL in July, the analyst said. 

Price Action

Lannett shares were down 2.85 percent at $5.11 at the time of publication Thursday. 

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Latest Ratings for LCI

DateFirmActionFromTo
Sep 2019SunTrust Robinson HumphreyMaintainsHold
Aug 2019SunTrust Robinson HumphreyMaintainsHold
Mar 2019SunTrust Robinson HumphreyInitiates Coverage OnHold

View More Analyst Ratings for LCI
View the Latest Analyst Ratings

 

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