57725--9/13/2006--LANNETT_CO_INC

related topics
{product, liability, claim}
{tax, income, asset}
{customer, product, revenue}
{competitive, industry, competition}
{property, intellectual, protect}
{product, candidate, development}
{personnel, key, retain}
{cost, regulation, environmental}
Our gross profit may fluctuate from period to period depending upon our product sales mix, our product pricing, and our costs to manufacture or purchase products. If branded pharmaceutical companies are successful in limiting the use of generics through their legislative and regulatory efforts, our sales of generic products may suffer. Third parties may claim that we infringe their proprietary rights and may prevent us from manufacturing and selling some of our products. If we are unable to obtain sufficient supplies from key suppliers that in some cases may be the only source of finished products or raw materials, our ability to deliver our products to the market may be impeded. Our policies regarding returns, allowances and chargebacks, and marketing programs adopted by wholesalers, may reduce our revenues in future fiscal periods. The design, development, manufacture and sale of our products involves the risk of product liability claims by consumers and other third parties, and insurance against such potential claims is expensive and may be difficult to obtain. Rising insurance costs could negatively impact profitability. The loss of our key personnel could cause our business to suffer. Significant balances of intangible assets, including product rights acquired, are subject to impairment testing and may result in impairment charges, which will adversely affect our results of operations and financial condition. RISKS RELATING TO INVESTING IN THE PHARMACEUTICAL INDUSTRY Extensive industry regulation has had, and will continue to have, a significant impact on our business, especially our product development, manufacturing and distribution capabilities. Federal regulation of arrangements between manufacturers of branded and generic products could adversely affect our business. The pharmaceutical industry is highly competitive.

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