Lannett Company, Inc. (NYSE: LCI) Investor Securities Class Action Lawsuit 08/24/2018

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Company Name(s): 
Lannett Company
Case Name: 
Lannett Company Shareholder Class Action Lawsuit 08/27/2018
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Proposed
Affected Securities
NYSE: LCI
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
08/24/2018
Class Period Begin: 
02/07/2018
Class Period End: 
08/17/2018
Court of Filing: 
U.S. District Court for the Eastern District of Pennsylvania
Deadline To File for Lead: 
10/26/2018
Date Settled: 
07/31/2019
Settlement Amount: 
$300,000
Deadline to Participate in Settlement: 
12/31/2019
Summary: 

July 31, 2019 - The court preliminarily approved the settlement.

July 12, 2019 - Parties filed a stipulation of settlement.

An investor in shares of Lannett Company, Inc. (NYSE: LCI) filed a lawsuit in the U.S. District Court for the Eastern District of Pennsylvania over alleged violations of Federal Securities Laws by Lannett Company, Inc. in connection with certain allegedly false and misleading statements made between February 7, 2018 and August 17, 2018.

According to the complaint the plaintiff alleges on behalf of purchasers of Lannett Company, Inc. (NYSE: LCI) common shares between February 7, 2018 and August 17, 2018, that the defendants violated Federal Securities Laws.

More specifically, the plaintiff claims that between February 7, 2018 and August 17, 2018, the Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose that Lannett faced a substantial risk of the loss of its exclusivity agreement with JSP, that accordingly, Lannett’s reported revenues were unsustainable, and that as a result, Lannett’s public statements were materially false and misleading at all relevant times.

Lannett Company, Inc. reported that its Total Revenue rose from $566.09 million for the 12 months period that ended on June 30, 2016 to $637.34 million for the 12 months period that ended on June 30, 2017 and that its Net Income of $44.78 million for the 12 months period that ended on June 30, 2016 declined to a Net Loss of $0.581 million for the 12 months period that ended on June 30, 2017. Lannett Company, Inc. has had an exclusivity agreement with its primary supplier, Jerome Stevens Pharmaceuticals, owned and operated by the Steinlauf family, set to expire on March 23, 2019

On August 20, 2018, prior to market open, Lannett Company, Inc announced that its distribution agreement with Jerome Stevens Pharmaceuticals will not be renewed upon its expiration in March 2019. Lannett stated that it “intend[ed] to redouble our continuing efforts to explore options for addressing our capital structure.”

Shares of Lannett Company, Inc. (NYSE: LCI) declined to as low as $4.60 per share on August 23, 2018.