The Business And Nature of Operations

12 Months Ended

Jun. 30, 2020

The Business And Nature of Operations

The Business And Nature of Operations

Note 1.  The Business and Nature of Operations

Lannett Company, Inc. (a Delaware corporation) and its subsidiaries (collectively, the “Company” or “Lannett”) primarily develop, manufacture, package, market and distribute solid oral and extended release (tablets and capsules), topical, nasal and oral solution finished dosage forms of drugs that address a wide range of therapeutic areas.  Certain of these products are manufactured by others and distributed by the Company.

The Company operates pharmaceutical manufacturing plants in Carmel, New York and Seymour, Indiana.  The Company’s customers include generic pharmaceutical distributors, drug wholesalers, chain drug stores, private label distributors, mail-order pharmacies, other pharmaceutical manufacturers, managed care organizations, hospital buying groups, governmental entities and health maintenance organizations. 

COVID-19 Update

In December 2019, the COVID-19 virus emerged in Wuhan, China and spread to other parts of the world.  In March 2020, the World Health Organization (“WHO”) designated COVID-19 a global pandemic.  Governments on the national, state and local level in the United States, and around the world, implemented lockdown and shelter-in-place orders, requiring many non-essential businesses to shut down operations.  The Company’s business, however, is deemed “essential” and it has continued to operate and it has continued to manufacture and distribute its medicines to customers.

In light of the economic impacts of COVID-19, the Company performed a review of the assets on our Consolidated Balance Sheet as of June 30, 2020, including intangible and other long-lived assets.  Based on our review, we believe that we will be able to realize the full value of our assets and that a triggering event does not exist at this time.  As such, no impairments or other write-downs were recorded during Fiscal 2020 specifically related to COVID-19.  Our assessment is based on information currently available and is highly reliant on various assumptions.  Changes in market conditions or other changes in the future outlook may lead to impairments in the future.

While COVID-19 has thus far not had a material impact on the Company’s operations, subsequent to an initial stocking up of supplies at the start of the pandemic the total volume of drug prescriptions being written in the country has decreased causing less demand for our products. We cannot reasonably predict the ultimate impact of COVID-19 on our future results of operations and cashflows due to the continued uncertainty around the duration and severity of the pandemic.