Fortune Magazine recently named Cody Laboratories’ owner — Lannett Company — as the country’s fastest-growing company. Lannett develops, manufactures and distributes generic pharmaceuticals through its facilities in Cody, Philadelphia and, most recently, Carmel, New York.
“Lannett’s outstanding growth is a credit to a confluence of factors: rising health care spending, an aging population, and growing prices for generic drugs,” wrote Fortune reporter Laura Lorenzetti on Aug. 19.
“All of us at Lannett appreciate the honor and look forward to maintaining this status,” Lannett President and CEO Arthur Bedrosian said last week, as he announced the company’s most recent financial results.
The Philadelphia-based company had 502 employees as of the end of June, including roughly 130 people at Cody Labs.
To come up with its annual rankings, Fortune analyzes publicly traded companies’ growth in sales, profit and stock returns.
One reason that Lannett — which has had nine straight quarters of record net sales — topped the business magazine’s list is that its earnings per share have risen by roughly 314 percent each year over the past three years.
In its annual earnings report, the company called the July 2014-June 2015 fiscal year “another extraordinary year for Lannett.”
The company’s net sales — of products ranging from thyroid, allergy and antipsychotic medications to painkillers — totaled $406.8 million, up 49 percent from the year before. Lannett reported a gross profit of $306.4 million, or 75 percent of net sales.
Lannett had ranked No. 29 on Fortune’s 2014 edition of the 100 Fastest-Growing Companies.
“We think of it as sort of a snapshot of America’s economy. It tends to show which sectors in the economy are doing really well and which sectors are not so well,” said Fortune Assistant Managing Editor Nicholas Varchaver in a video accompanying the 2015 rankings.
Lannett was one of nine pharmaceutical companies on the list and was joined in the top 10 by Gilead Sciences. (Facebook came in at No. 10.)
Lannett is a relatively small company, Fortune noted, comparing the $274 million it collected in 2014 to generic industry giants like Teva Pharmaceutical Industries (which brought in $20.3 billion).
It’s typical for companies in the healthcare industry to make Fortune’s list, but “one thing that we’re not really seeing is oil firms — and that’s because the price of oil is through the floor,” Associate Editor Anne VanderMey said in the video.
Fortune noted that much of Lannett’s growth has come from higher prices on generic drugs — and that regulators have been probing whether generic drug manufacturers are running afoul of anti-monopoly laws.
“The company believes that under the current regulatory environment, the generic pharmaceutical industry as a whole will be the target of increased governmental scrutiny, especially with respect to state and federal anti-trust and price fixing claims,” Lannett wrote in last week’s annual report.
The company’s plans for future growth include a greater focus on pain-killing drugs, as they generally have higher profit margins and are expected to be in higher demand as the U.S. population ages.
Lannett says Cody Labs is “at the core” of its strategy, noting its local subsidiary has a rare license to import poppy straw — a raw ingredient used in many narcotics.
Cody Labs cut the ribbon on a new 11,000 square-foot warehouse on Road 2AB in June, aided by what is basically a low-interest loan from the state of Wyoming. State and local economic development advocates hope the warehouse is just the first piece of a much larger manufacturing complex.