During Lannett’s recent reporting of financial results for its fiscal 2022 first quarter ended Sept. 2021, the company announced its board has approved a restructuring plan to optimize operations, improve efficiencies and reduce costs.
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Elements of the plan, which is expected to be completed in about 18 months, include the following:
- Consolidating the manufacturing footprint;
- Transferring liquid drug production to the company's main plant in Seymour, Indiana from its facility in Carmel, N.Y.;
- Closing the Carmel plant and pursuing its sale;
- Restructuring the R&D function;
- Reducing headcount and discontinuing future development programs targeting liquid generic medications;
- Raising threshold requirements for other internally developed products and starting projects earlier, resulting in fewer but potentially larger market opportunity products;
- Further product rationalization, over time, as the company has done in the past. This particular exercise primarily involves scaling back or phasing out some low margin OTC products, made at the Carmel site, and two very low margin prescription products; and
- Overall, the current organizational workforce will be reduced by approximately 11%, and other existing and anticipated future vacancies will not be filled. Ultimately, the plan is expected to result in a leaner, more focused organization and generate cost savings of approximately $20 million, annually.