{"id":11657,"date":"2019-06-12T17:53:38","date_gmt":"2019-06-12T23:53:38","guid":{"rendered":"http:\/\/www.yellowstonegate.com\/?p=11657"},"modified":"2019-06-12T17:53:38","modified_gmt":"2019-06-12T23:53:38","slug":"at-least-80-jobs-lost-as-cody-labs-to-close-by-october","status":"publish","type":"post","link":"https:\/\/www.yellowstonegate.com\/?p=11657","title":{"rendered":"At least 80 jobs lost as Cody Labs to close by October"},"content":{"rendered":"
\"The<\/a>
The parent company of Cody Labs is laying off at least 80 workers as a result of plans to close its Wyoming plant by the end of September.<\/figcaption><\/figure>\n

<\/span><\/span>CODY, WYO. \u2014 Approximately 80 people employed at active pharmaceutical ingredient manufacturer Cody Labs will lose their jobs over the next 100 days, after parent company Lannett Co. Inc. announced plans this week to close the facility by the end of September.<\/span><\/p>\n

Cody Labs is a wholly owned subsidiary of Philadelphia-based pharmaceutical manufacturer Lannett, which also operates drug manufacturing facilities in Carmel, N.Y. and Seymour,\u00a0Ind. Lannett had been seeking a buyer since last fall for its Cody plant. <\/span><\/p>\n

In a written statement, the company said it “made the difficult decision to cease operations at Cody and close\/decommission the facility.”<\/span><\/p>\n

Once the darling of state and local economic development leaders, Cody Labs at one time employed as many as 135 people, and had launched an ambitious plan to expand operations.<\/span><\/p>\n

Already the recipient of millions in public funds, Lannett again sought public assistance in 2016 in the form of a low-interest state loan for the construction of a separate new facility at an industrial park in north Cody. But the company never finalized a $23 million\u00a0loan backed by Forward Cody and approved by the State Loan and Investment Board, and halted construction on the new facility midway through the project.<\/span><\/p>\n

Cody Labs announced last summer a restructuring plan that brought layoffs of approximately 50 workers,\u00a0as Lannett sought to pay down $1 billion in debt resulting from purchasing two competitors.\u00a0<\/span><\/p>\n

Investors have significantly driven down the price of shares in Lannett over the last several months, as uncertainty has swirled about the company’s ability to service debt and replace lucrative revenue streams that have since dwindled or disappeared entirely. <\/span><\/p>\n

Company officials said in a statement that they worked to find a buyer for Cody Labs, but that “potential buyers have only shown interest in purchasing Cody\u2019s fixed assets, due in part to the opioid crisis.”<\/span><\/p>\n

Another factor may be uncertainty and potential liability stemming from Lannett’s role in widening state and federal investigations into price-fixing in the generic drug market. The company is the nation’s oldest manufacturer of generic pharmaceuticals, and has been named in a lawsuit brought by dozens of state attorneys general alleging anti-competitive behavior in the generic drug industry.<\/span><\/p>\n

The company also has been a part of an ongoing investigation by the U.S. Department of Justice into anti-competitive behavior by generic manufacturers.<\/span><\/p>\n

The company has stated previously that it has complied with all state and federal laws, and and that an extensive review by outside counsel has found no wrongdoing.<\/span><\/p>\n

In November 2014, just as Lannett was asking Wyoming taxpayers to kick in $2.5 million through the Wyoming Business Council toward a new drug storage warehouse in Cody,\u00a0then-CEO Arthur Bedrosian was asked to appear at a Congressional hearing\u00a0on what government documents described as \u201cstaggering price increases\u201d for generic drugs.<\/span><\/p>\n

Over the previous two years, Lannett had hiked the price of Digoxin, its generic heart medicine, by 1,000 percent after one of two other suppliers stopped making the drug, according to Congressional documents.<\/span><\/p>\n

Bedrosian declined to testify before Congress, citing a conflicting trip to London to meet with potential investors. In a 2014 fourth-quarter earnings conference call with investors and analysts, Bedrosian reported the highest net sales, highest gross margins and highest net income in company history, telling analysts that \u201cwe are an opportunistic company,\u201d and \u201cwe see opportunities to raise prices.\u201d<\/span><\/p>\n

While the company may remain opportunistic, its opportunities to raise prices appear to be shrinking amidst the scrutiny of state and federal price-fixing investigations, shareholder lawsuits and growing public backlash against opioid manufacturers and spiraling drug prices.<\/span><\/p>\n

CEO Tim Crew said last summer that Lannett was “committed to investing in Cody\u2019s operations.” He announced just a few months later that Lannett was selling Cody Labs. He then later said there was considerable interest among potential buyers, and that he expected to finalize a sale by this month. <\/span><\/p>\n

The company has now promised all Cody Labs employees what it claims will be “a generous severance package and outplacement services to assist them through this transition.”<\/span><\/p>\n

Workers will be laid off in three phases, the company said, starting at the end of June, again in early August and wrapping up in late September.<\/span><\/p>\n

Contact Ruffin Prevost at 307-213-9818 or <\/i>ruffin@yellowstonegate.com<\/i><\/span><\/a>.<\/i><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

CODY, WYO. \u2014 Approximately 80 people employed at active pharmaceutical ingredient manufacturer Cody Labs will lose their jobs over the next 100 days, after parent company Lannett Co. Inc. announced plans this week to close the facility by the end of September. 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