Lannet and Sunshine Lake Enter Into CMO Agreement

Lannett Company has announced that it is entering into a distribution and contract manufacturing services (CMO) agreement with Sunshine Lake, which is the US based subsidiary of the HEC Pharm Group. HEC is based out of the Guangdong Province in China. Under the terms of the deal, Lannett will become the sole U.S. distributor of Sunshine Lake’s generic pharmaceutical drug, Zidovudine. Zidovudine, available in tablet form (300 mg), is the generic equivalent of GSK’s Retrovir and is used to treat HIV infections. In 2013, sales of the drug totaled $4.5 million. The deal also allows for the companies to add new products to the distribution and CMO agreement. The parties both believe that various drugs pending FDA approval could eventually be added to the agreement.

In addition to the distribution and CMO agreement, both companies have agreed to a three year timetable for the co-development of 25 dosage formulations. Sunshine Lake will responsible for scaling up and commercializing the products at Lannett facilities in Philadelphia. Sunshine Lake has also offered its experience as an active pharmaceutical ingredient (API) manufacturer to help quicken the pace of API development at Lannett facilities.

Jeffrey Weiss, president of Sunshine Lake, commented on the agreement between the companies. “Lannett is a leading U.S. developer and manufacturer of generic pharmaceuticals, with a growing pain management business. We believe our goals, objectives and areas of expertise are aligned and complement those of Lannett. This agreement creates new revenue streams for both companies' future growth,” said Weiss.

Arthur Bedrosian, the president and CEO of Lannett, also released a statement on the agreement. He said that the collaboration will provide “the perfect opportunity to add products to its portfolio, lower production costs, expand its pain management franchise and, possibly, enter the China market.’ He went on to say that HEC’s experience in China is critical to helping Lannett grow globally, particularly in the Chinese market.