The number one company on this year’s Fastest Growing Companies list soared up from number 29 just the year before. The weirdest part is is that not many people even know its name. It’s not a company made by an already wealthy CEO, or an economic star. It’s simply a 73-year-old drugmaker coming out of Philadelphia.
The name of the company is Lannett Company. The company develops, manufactures, and distributes generic drugs for a wide various diseases. These diseases have a large range from glaucoma to pain relievers. Lannett Company was able to score nine quarters in a row of record net sales and a 3-year annual growth rate for earnings per share of 314%. This has made them the number one fastest growing company.
Over nine pharmaceutical companies made Fortune’s list this year, and two of them are in the top 10. Lannett’s great rise is owed to a concoction of circumstances: health care spending going up, an elderly population, and rising prices for generic drugs.
Elliot Wilbur, an analyst of Needham & Co., writes “the generics industry continues to enjoy a period of unprecedented pricing prosperity. Nowhere do we see that more evident than in Lannett’s financials, which continue to benefit from major pricing leverage on key limited competition generics.”
That’s definitely true for Lannett’s cardiovascular and migraine offerings; prices respectively grew 150% and 124% last year. This strong pricing pressure has raised received lots of attention. As a result, Lannett and other generic drugmakers are now under investigation by the Securities and Exchange Commission. They are seeking violations of the Sherman Act, an anti-monopoly act that does not allow activities that restrict competition. According to the company, “it has acted in accordance with all applicable rules and regulations.”