Lannet Co. Inc. (LCI, Financial) announced through the PRNewswire Tuesday that its “Lopinavir and Ritonavir Oral Solution USP, 80 mg/20 mg per mL” has been approved by the U.S. Food and Drug Administration (FDA) to be produced and sold in the U.S. as a generic drug.
Lannett’s protease inhibitors, a class of antiretroviral drugs for the treatment of HIV positive patients and patients with AIDS, are equivalent to AbbVie’s (ABBV, Financial) Kaletra oral solution.
Combinations of protease inhibitor drugs are administered to HIV positive people if the basic treatment made up of a cocktail of antiretroviral drugs, which is usually composed of a non-nucleoside reverse transcriptase inhibitor (NNRTI) and two nucleoside analog reverse transcriptase inhibitors (NRTIs), becomes less effective.
It is estimated that approximately 1.24 million people, adults and juveniles, are HIV positive in  the U.S. The number of new diagnoses is gradually falling thanks to HIV prevention efforts.
According to the Centers for Disease Control and Prevention (CDC), “gay and bisexual men, particularly young African-American gay and bisexual men, are most affected.”
Lannet closed at $23.50 Wednesday, up $1.05 per share (or 4.68%) from the prior close. The stock gained 6.12% since the beginning of the new year. The stock is more volatile than the market with a beta of 2.28.
Earnings per share declined over the last four quarters, from 95 cents in fourth-quarter 2015 to 77 cents in third-quarter 2016.
Source: Yahoo Finance
For the fourth quarter of 2016, analysts estimate that the company will generate earnings of 84 cents per share, which represents a 9.1% increase from the previous quarter’s figure and an 11.6% decline from fourth-quarter 2015 earnings.
Source: Yahoo Finance
Analysts recommend buying shares of Lannet with a rating of 2.3. The analysts’ average target price is $30.40, ranging from a low target price of $25 per share and a high target price of $38 per share.
The company has a market capitalization of $873.27 million and a volume of approximately 37.16 million shares outstanding, of which a percentage of 74.3% can be traded on the stock market.
The percentage of shares outstanding held by insiders is 25.91%, and that held by institutions is 67.40%.
As of the most recent quarter, the company has $253.06 million in cash on hand and $1.05 billion in total debt.
During the third quarter, Joel Greenblatt (Trades, Portfolio) and Ken Fisher (Trades, Portfolio) opened new positions in Lannet; they bought 280,182 and 7,650 shares of the company while Ronald Muhlenkamp (Trades, Portfolio) decreased his position by 33.01%.
Disclosure: I have no positions in Lannet.
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