It’s unclear what impact − if any − a local drug manufacturer’s loss of a major contract will have on its plant in Seymour.
Lannett Co. Inc., 1101 W. C Ave., announced Monday that Jerome Stevens Pharmaceuticals will not renew its contract with the company when it expires March 23, 2019.
The company was Lannett’s primary supplier of finished goods and accounted for 36 percent of its finished goods inventory in 2017, according to The Wall Street Journal.
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Philadelphia-based Lannett develops, manufactures and distributes generic pharmaceutical drugs at a 381,000-square-foot manufacturing plant on a 4.19-acre site in the Freeman Field Industrial Park.
A news release from the company said it purchases butalbital, aspirin, caffeine with codeine phosphate capsules, digoxin tablets and levothyroxine sodium tablets from Jerome Stevens. It’s unclear whether any of those drugs are manufactured or distributed at the Seymour plant.
A local representative would not confirm whether the contract would affect the plant, and a company spokesperson referred The Tribune to a news release issued by the company Monday.
The company is the fourth-largest industrial employer in Jackson County with 686 employees in the first quarter of 2018, according to Jackson County Industrial Development Corp.
Tim Crew, chief executive officer of Lannett, said in a news release that the company has launched eight new products that are expected to bring in $50 million for fiscal 2019 and has acquired 25 market or near market ready products.
“While we are disappointed and intend to redouble our continuing efforts to explore options for addressing our capital structure, we have been preparing for this contingency, knowing that this outcome was a possibility,” he said. “Accordingly, we have been focused on improving our already strong base commercial business of more than 100 currently marketed products.”
The news has caused the company’s stock to plunge more than 60 percent this week.
Shares fell from $13.52 at the market’s open Monday to $5.20 at close Wednesday. The stock fell below $5 throughout the day Thursday.
Lannett purchased Kremers Urban Pharmaceuticals for $1.23 billion on Nov. 27, 2015. The company announced an immediate 10 percent reduction in workforce as a result of the purchase and a 20 percent reduction between then and 2019.
The reduction was part of a restructuring process to streamline operations after closing Kremers Urban corporate offices in Princeton, New Jersey.
The company has only seen a net loss of four jobs since that reduction, according to data from JCIDC.
Lannett plans to release its full 2018 fiscal report Tuesday, and a company spokesperson said more answers may be available in the report.