Hello and welcome to the Lannett Company's fiscal 2017 first quarter financial results conference call. My name is Eric and I will be your operator for today's call. At this time all participants are in listen only mode. Later we will have conduct a question and answer session. I will now turn the call over to Robert Jaffe, Investor Relations for Lannett Company. Please go ahead, sir.

Thank you, Eric. Good afternoon, everyone, and thank you for joining us today to discuss Lannett Company's fiscal 2017 first-quarter financial results. On the call today are Arthur Bedrosian, Chief Executive Officer; and Marty Galvan, Chief Financial Officer. This call is being broadcast live at www.lannett.com. A playback will be available for three months on Lannett's website. I would like to make the cautionary statement and remind everyone that all of the information discussed on today's call is covered under the Safe Harbor provisions of the Litigation Reform Act. The Company's discussion will include forward-looking information reflecting management's current forecast of certain aspects of the Company's future, and actual results could differ materially from those stated or implied. In addition, during the course of this call, we refer to non-GAAP financial measures that are not prepared in accordance with U.S. Generally Accepted Accounting Principles, and may be different from non-GAAP financial measures used by other companies. Investors are encouraged to review Lannett's press release announcing its fiscal 2017 first-quarter financial results for the Company's reasons for including non-GAAP financial measures in its earnings announcement. The reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures is also contained in the Company's earnings press release issued earlier today. This afternoon, Arthur will provide a brief overview of the quarter. Then Marty will discuss the financial results in more detail, including the Company's updated financial guidance for the fiscal 2017 full-year, followed by Arthur's concluding remarks. We will then open the call for questions. With that said, I will now turn the call over to Arthur Bedrosian. Arthur?

Thanks, Robert, and good afternoon, everyone. Today we reported our financial results for fiscal 2017 first quarter, which included a 52% increase in net sales compared with the prior-year first quarter. Revenues were approximately 162 million compared with 106 million in the prior-year first quarter. The increase was largely due to the addition of Kremers Urban operations, which we acquired in November last year. Our first quarter performance reflects strong sales of certain products, offset by the effect of competitive pressure on a number of our other products. On the operational front, we recently achieved a number of milestones. Those include completing a Phase III clinical trial of our proprietary C-Topical product; successful FDA inspections of three of our facilities; and FDA approval of KU's buprenorphine and naloxone sublingual tablets. We also continue to make excellent progress on integrating KU in our cost reduction program, which we implemented in February. In a moment, Marty will discuss our financial results and provide an update to our guidance for fiscal 2017. I'd like to remind everyone that we have a deep product pipeline that includes a significant number of ANDAs currently pending at the FDA which are not included in our guidance. With that brief overview, I'll turn the call over to Marty to discuss our financial results in more detail. Marty?

Thank you, Arthur, and good afternoon, everyone. As was mentioned earlier, I will be referring to non-GAAP financial measures. The reconciliation of the GAAP to non-GAAP numbers can be found in today's press release. Our earnings release also includes a schedule with our net sales by medical indication. I also want to remind everyone that when comparing the current year's first quarter results with last year's first quarter, please note that last year's first quarter did not include KU operations. Now for the financial results on a non-GAAP adjusted basis. For the fiscal 2017 first quarter, net sales increased 52% to $161.6 million from 106.4 million in last year's first quarter. Gross profit was $94.0 million or 58% of net sales, compared with 77.8 million or 73% of net sales last year. The decrease in the gross profit percentage was primarily due to the inclusion of KU's lower-margin business. R&D expenses increased to $12.4 million from 6.5 million in the prior-year first quarter. SG&A expenses were $20.9 million compared with 13.9 million. Operating income increased to $60.7 million from 57.3 million for the prior-year first quarter. Interest expense was $18.1 million compared to 60,000. Net income attributable to Lannett was $29.0 million or $0.77 per diluted share compared with $37.1 million or $0.99 per diluted share for the fiscal 2016 first quarter. Turning to our balance sheet, at September 30, 2016, cash, cash equivalents, and investment securities totaled $253.1 million. And total debt outstanding was 1.15 billion. I will now turn to our guidance, which has been revised since our last conference call. For the fiscal 2017 full year, we now expect, on a non-GAAP adjusted basis, net sales in the range of $675 million to 685 million, down from $690 million to 700 million. The lower net sales guidance primarily reflects the notice we recently received from the FDA seeking to withdraw its approval of our methylphenidate ER products. While we will make every effort to convince the FDA that our product should continue to be marketed, we have simply lowered our projected sales of this product in our guidance. Gross margin as a percentage of net sales of approximately 57.5% to 58.5%, up from 55% to 56%. The increase in gross margin is due to change in our product mix. R&D expense in the range of $49 million to $51 million, unchanged from previous guidance. SG&A expense ranging from $70 million to $72 million, up from $67 million to $69 million. Interest expense in the range of $71 million to $72 million, unchanged from previous guidance. The full-year effective tax rate to be approximately 34%, unchanged from previous guidance. And lastly, capital expenditures in fiscal 2017 in the range of $55 million to 65 million, unchanged from previous guidance. We expect the net effect of the changes to our guidance to be modestly positive to profitability. Regarding the phasing of the remaining quarters in fiscal 2017, we expect net sales and profitability to ramp up, with the fiscal 2017 second quarter higher than the first quarter, and the third and fourth quarter slightly higher than the second quarter. As Arthur mentioned, we have a deep pipeline, including a large number of product applications currently pending at the FDA. Our guidance does not include sales from these products, nor does our outlook include the benefit of any potential acquisitions or strategic alliances. With that, I will now turn the call back over to Arthur.

Thanks, Marty. I'd like to expand on our C-Topical product. The 646-patient Phase III study met all primary clinical endpoints and demonstrated statistically significant treatment effects for both the 4% and 10% solutions. The most common treatment-related adverse events were mild reversible hypertension or tachycardia. Toxicology and pharmacokinetic studies are ongoing, and expected to be completed by calendar year end. Upon the successful completion of these studies, we plan to submit a new drug application to the U.S. Food and Drug Administration, with a target filing date of next summer. We are hopeful that post-approval of the NDA, we may receive a new chemical entity designation, giving us five years of marketing exclusivity. In addition, we have entered into discussions for the potential introduction of C-Topical into the European market. A few weeks ago we had a successful scientific advice meeting with the medicines and healthcare products regulatory agency, otherwise referred to as MHRA. This is an important step in the regulatory process for marketing the product in Europe. We have identified a marketing partner, and currently anticipate that the UK and Italy are likely the first markets the product will be launched in Europe, on European approval. We have had preliminary discussions with a large international conglomerate on a number of potential strategic business opportunities. These include co-developing products, investing in our API operations, and access to markets in Asia. Our Darmantest labs in Armenia is now open for business. We have the enviable distinction of being the only FDA-approved bio study site in the region. I want to acknowledge the hard work of our overseas team for receiving these successful FDA inspection results. We intend to expand these facilities, which will allow for larger studies and additional laboratory testing. We recently received notice from the FDA that it will seek to withdraw approval of our ANDA for methylphenidate extended release. We are reviewing the FDA's position and compiling scientific evidence in an effort to convince the FDA that our products should continue to be marketed. We remain confident that our methylphenidate extended-release products are safe and effective; and, accordingly, intend to request a hearing with FDA prior to the November 17, 2016, deadline. With regard to the KU integration, we have completed all FDA filings required to move packaging from Philadelphia to our Seymour, Indiana, facility. All packaging activities in Philadelphia have now been shut down and transferred to Seymour. We previously reported that two of our highest volume products were transferred from Philadelphia to the Seymour plant. We expect to begin producing these products in Indiana as soon as later this month. We are on track to continue filing ANDA drafts of supplements at a rate of about one per month. This is a significant accomplishment, and far better than the industry norm. We achieved verified, accredited wholesale and distributed, or VAWD, certification in Seymour. This certification, which ensures best practices for safe distribution are followed, will allow us to consolidate our oral, solid dose product distribution in Indiana. With regard to our pipeline, we currently have 30 ANDAs, including 12 with Paragraph IV certification, pending at the FDA. We have a number of applications that have been pending at the Agency for some time, which makes us optimistic that we will receive multiple FDA approvals in fiscal 2017. In addition to our own filings, we have another 10 applications with the FDA through our alliance partners. We continue to make a significant investment in product development. One last item before we open the call to questions. This afternoon, an article appeared from a national media outlet regarding the Department of Justice probe into generic drug pricing. While the article suggests that the Department of Justice probe has expanded, and indictments of industry executives are likely by the end of the year, I will reiterate our previous statement, which is: we continue to fully cooperate with the Department of Justice inquiry, and firmly believe that we have acted in full compliance with all applicable laws and regulations. With that overview, I would now like to address any questions you may have. Operator?

Thank you [Operator Instructions] and our first question comes Gregg Gilbert from Deutsche Bank. Greg, your line is open.

Thanks for that prepared statement there at the end. I was hoping you could comment on whether anything has changed in the recent weeks or months regarding that probe into potentially collusive behavior. And can you give us some detail as to what you and the Board did to look into this matter when it first arose that gives you the confidence to support the statement that you made? Thanks.

I'll be happy to do that. Actually, the Board of Directors was very proactive in making sure that outside counsel was brought in to thoroughly investigate the matter. And a number of people involved in sales because obviously this was a sales issue, including myself of course, I'm not in sales. But we were subjected to a thorough investigation, which included our computers, our laptops, et cetera, being copied by outside counsel. And they reviewed all that data against all the information they had, starting with the department excuse me, the Attorney General of Connecticut, who first raised these questions in a subpoena. And they have been only questions, I might point out. After a number of months of investigating and talking to all the individuals involved all of us were interviewed; all the sales people that are currently on board, sales people that have left us in the past, were interviewed. They left no stone unturned. The report to the Board of Directors was that they found absolutely no wrongdoing on the part of anybody in Lannett. They searched; they searched and interviewed, and went further than just the laptops. They actually went ahead and looked at people's cell phones, texting. There's a lot of new ways to communicate these days. So their investigation was rather thorough. And they were convinced that there was no wrongdoing on the part of any of my employees here at the Company. So we're taking the same position we've taken when that was first revealed to the Board of Directors, and telling the public that we continue to cooperate and have cooperated with the Department of Justice. And there has been no change with regards to any information that's come to our attention since this matter was investigated by outside counsel. As more companies were involved, as you now from the article, our outside counsel went ahead and re-examined all the data from everybody's laptops, all their communications, to make sure there was no communications with any of the new potential invitees, let's say. I don't know what you would call them, but the other companies that were suddenly involved and getting subpoenas, caused our outside counsel to re-examine everything again to make sure there was no communications between staff here at Lannett and any of those companies and any of their employees. So I'd say we did a thorough investigation. It didn't just stop in the summer almost 2 years ago at this point; it continued as more companies were subpoenaed for documents, et cetera. And I want to point out one important thing. The Attorney General, when they first sent the subpoena, misunderstood one of our products. And they were inquiring about a doxycycline that Lannett has never made or marketed. And as a result, we keep getting bunched together with that issue. But that product back then was not something we manufactured. The initial product they looked into was the digoxin product, and that's a product we do distribute. So I hope that answers your question adequately. And for anybody else that might have a similar question, I hope my answer is thorough enough to allay any fears.

Thanks, Arthur. And unless you can complete the answer by talking about what next steps might be, to the extent you have any insight into that?

With regards to what the government is doing, kind of sitting back, wondering if there is anybody that they have identified and if they are going to charge them. Because the problem now is there's a greater cloud than existed previously. When the Attorney General of Connecticut sent us the subpoena, we lost $400 million in market cap just because he requested some information. Nothing came from that information. But my shareholders were harmed, and it pains me that my shareholders are suffering because of an inquiry. It continues to happen now. At least here, if the data is going to end at the end of the year or in January, then it's over; and the shareholders of our Company, at least, can be assured that Lannett was innocent of anything and have their confidence restored and maybe join the Company's shareholders again. It's unfortunate that people read headlines and they don't know, and I understand the concern they have. But this should be finished finally after 2.5 years, and January would be about 2.5 years from the first inquiry from the Connecticut Attorney General. So I'm kind of looking forward to that being the end of the, because usually there's no final date when these things are over. So this is welcome, in a way; of course, not to the people that have a huge problem.

Well, thank you. Just one quick one for you, Marty. The change in gross margins in your guidance, can you put some more detail around that? Is that simply product mix-driven? Or are there other things you can tell us about that change? Thanks.

Well, Gregg, it is product mix. We saw in the quarter a strengthening of our -- of the Lannett's product line. And it was offset by -- somewhat offset by the decrease of that we saw in the -- what we call the KU product line. And we are basically expecting that to continue into the main quarters of the year. So that's the key driver, in addition to the change from methylphenidate.

Thanks.

And our next question comes from Andrew Finkelstein from Susquehanna Financial. Andrew, your line is now open.

I was hoping you could address a couple particular products. One is on levothyroxine. It was a strong number last quarter, as you started to sell in for some additional contracts. It was down this quarter, despite volumes. If you could talk about how that should shake out, and what your expectation for that product is for the year. If you could also talk about Paxil CR, which was one of your recent launches; we haven't seen a lot of uptake yet. On then on Concerta, if you could be a little more specific about what your expectations for that are, at this point.

Well on the legal part, let me start, and I think Arthur may join me on this one. On the legal product, yes, we saw the dip in the quarter. You saw that in the medical indication charts. Our expectations for the rest of the year, though, is that we expect it to increase in the second quarter, and have a run rate which is somewhat similar to the fourth quarter of fiscal '16. So this is a dip in -- basically due to timing. But we do expect to see that sales be back about former levels in the remaining quarters.

With regards to the methylphenidate, I'll try to answer this one. We're being conservative in taking the product out of our guidance, because it's the only right way we operate here. We always tell people we are very conservative. But what do I think is going to happen? We don't believe there's going to be any change, actually, in the market sales of that product. Currently, as you know, our Company did get an AB rating. It's our understanding that they have not been able to launch because they weren't expecting the approval. But when they launched the product, it depends on what they do with the pricing of the product as to whether it impacts us or not. So, for example, if they come out with the pricing where the authorized generic is, then we'll continue probably to continue selling at the level we've been selling our product. If they come out at a lower price, that could impact us. So right now we expect to see the business continue as it has since we received the letter. And we're also hoping that we can convince the FDA there's no reason to withdraw the product. But when we looked at this acquisition back in December of 2015, one of the scenarios was, what if the FDA does go ahead and ask you to withdraw the ANDA? And our position then, and our guidance from counsel, was that it would take a period of time -- I believe they gave us something like 18 months -- before all the process was over and you literally might be forced to withdraw the product. So we still feel we have plenty of time to continue to sell the product on an ongoing basis, based on the revenue we've been getting. But to be conservative, we took it out of the guidance.

So, just to be clear, it's completely out of guidance, starting now, or --?

Andrew, we have a modest amount in our expectations for the remaining three quarters.

But less than what was in this quarter?

Less than was in this quarter?

Yes. Yes, less in the second quarter than we had in the first, yes.

Okay. And is there any more detail you can give on what kind of additional data you might have available to you by the time of the hearing?

Well, we're waiting to see what the data the FDA has to take the position they've taken. As you know, there's plenty of BX rated products that remain on the market. So if it's merely an issue of whether its AB rated or not, then it could remain on the market as a BX rated product. Because we know of a number of products that are on the market for a number of years with a BX rating. In this particular case, we won't know more until we have the hearing, because it's hard to predict what's on the FDA's mind. But we are asking to see the documentation behind their decision making so that we can understand where they're going, and why. We're not in a position to answer those questions because we don't have all the information that the FDA may have, or may not. We'll know more, once we have the meeting with them.

Okay. Thanks very much.

Our next question comes from Elliot Wilbur from Raymond James. Elliot, Your line is now open.

At the beginning of the call, I was thinking this was probably the appropriate quarter to break out Kenny Loggins' Danger Zone, Arthur, but I guess we've already used that [Multiple Speakers]

If I knew the article was going to be out now, I would have chosen a different song. But I still figure [Multiple Speakers] my life.

Seems that way. Just a follow up question on methylphenidate. Obviously the FDA has put a lot of information out there with respect to their position on the product, and even going so far as to conduct their own studies. So, it seems pretty difficult to imagine, from our perspective, based on what you have internally, that you can convince them to change their minds at this point, at least with respect to the AB rating. I'm just wondering, at this point, if you've decided or wouldn't it just simply be easier perhaps to do additional BE studies to support your claim that you should be able to regain the AB rating?

Well, that's one of the options. But the other option is to understand the actual data itself. Because the anecdotal information that the basis for which we understand. Remember, this is my understanding, so bear with me. But the basis upon which they took the position in 2014 was anecdotal information they received from the field. Now, you cannot get a new drug approved with anecdotal information. You have to have actual scientific evidence. So they made a decision to say this product is not bioequivalent to Concerta; Mallinckrodt and Kremers, take your products off the market or submit a new bio-equivalency study, but this is the new criteria you must meet. So they changed the rules. That's the argument that, as, Mallinckrodt's arguing in court. They changed the ground rules and said, you now have to meet a new requirement, not the one that they previously asked us to meet, and we did meet. So, we need to get a little more information. And in this meeting, we may know a little bit more as to whether or not we should reformulate the product from scratch, change the whole process and file a supplement, which is one option; remain on the market with a BX rated product is another option. And all those right now are really under review with our outside experts and our R&D staff and product development. So there's a lot of theories that we're discussing internally. And I don't have an answer to give you today. But yes, doing additional bio-equivalencies is an option.

Okay. If I could ask another question directed toward Marty. Just following up on the earlier question around gross margin guidance and the expected improvement there relative to prior guidance. It's a pretty big move, 250 basis points. I wasn't quite sure necessarily that I caught the full explanation behind that. It would seem like, with methylphenidate largely coming out of the mix, that that would put downward pressure on margins versus potentially moving the other direction. And again, it seems like a pretty significant move. Just curious again, a little bit more granularity on that, please.

Yes, I'll probably end up repeating myself here somewhat, Elliott. But shifting of the business has an impact on our margins and the gross margin in the first quarter. And that's essentially what we're expecting to continue. We've seen strengthening in the Lannett product line. Levothyroxine had a good quarter, better than we were expecting. We did expect the dip that we saw, but it still held up pretty well. And elsewhere in the product line of Lannett, we've showed our strength in several products. Meanwhile, on the KU side, some of the KU key products have seen deterioration in this last quarter. Omeprazole, the largest product, there we saw some decrease in the quarter. We also saw a decrease in their contract business, third party toll manufacturing. So both of those trends, we took into consideration as we came up with our guidance for the full year. And so basically what you are seeing on the full-year basis is that same trend. Now, that will kind of make -- we took that out. We had a significant cut in that number in the guidance. But then along with other changes in the mix of the two businesses, it really comes out to be the shifting of the business.

Okay, thanks. And just one last quick one for Arthur. Going back to your earlier comments around the ANDA pipeline, I wasn't sure just necessarily wasn't clear to me at the time that you had articulated. You have 30 ANDAs filed with the Agency, LCI filings plus Kremers. And then there's an additional 10 partner products that are pending as well. So the pipeline is 40 products.

Correct. The 10 we were referring to, those are filed by HEC Group, our alliance partners from China. We are the exclusive distributors to those, and we currently distribute their products now in the U.S. So as we get them approved, we are the distributors for them. And the others that we have down there, we are expecting roughly 20 approvals this year. But realistically, we're looking at it and assuming, reading tea leaves, we're saying more than likely between 10 and 12 for sure by June 30 should be approved. So those are what I put in our guidance. We tried to be conservative vis-à-vis whether we would get the products approved. But we are expecting a number of them because of the length of time they've been down there, and based on the correspondence with the Agency. We're being conservative in saying out of 20, 10 for sure probably will be approved by June. The others could be July and August.

Okay, great. Thank you.

And the next question comes from Matt Hewitt from Craig-Hallum Capital. Your line is now open.

Several different questions; first, on the methylphenidate, given the situation, is there any clawback provision in that?

No, there isn't. It was one of the stock purchase agreements closes; that anything to do with methylphenidate was not going to be considered a material adverse event, because the question in the cloud was already over that product. So that was the risk we needed to take if we were going to go ahead with the transaction. There was no assurance the FDA wouldn't go ahead and do this, and of course now they have made that move.

Okay. Regarding the contract manufacturing, it sounds like there was some business that slipped there. Can you quantify how much that was?

I'm sorry, say that [Multiple Speakers].

The contract manufacturing.

I'm sorry, in the quarter?

Yes.

In the quarter.

Yes.

Sorry. Well, against our -- it was about $2 million or $3 million against what we expected to be in the first quarter.

All right. Thank you. And then regarding the C-Topical, a couple questions there. Obviously congratulations on the successful Phase III. It sounds like you've got a good timeline as far as getting the NDA submitted. How will that change the market dynamics? How much does that expand the market opportunity for you, and how quickly can you exploit that?

Matt, which product release? I'm sorry.

[Multiple Speakers] The C-Topical?

Oh, the C-Topical.

No, the C-Topical.

Well, that one -- well, there, I'm giving you projections from the marketing people. To just deal with the limited, ear, nose and throat market, they estimated it to be a $138 million market. If you went after the additional -- like the balloon sinuplasty, then eustachian tube sinuplasty -- you take your two plasties, they use our product to insert the balloon. That market will be up to about 200 million in total. And that's just those two limited markets. This product could be used in other fields, as well. But since we didn't do the Phase III study in those areas, I don't want to comment on them. But there's other uses for this product topically that once we file, we will do additional clinical studies. And I'll cite one example in the dental field. This product has applications that we would investigate and explore with the FDA in a protocol.

Okay. And then last one for me; you mentioned the partnership opportunities for Europe. Potentially -- would you potentially receive some cash up front for that? And how should we be thinking about that opportunity as we look at our models for the remainder of this year?

That's a tough question. This would be a new product for their market, and they are just doing their market research now. Actually, our colleagues in Italy were the ones that had joined us at the MHRA and presented the information, because we needed to see what it could take to get the product approved in Europe. So we still don't have any marketing results. And they are doing it by country, so they plan on at least selling in Italy and possibly other parts of Europe. So you have to give me a time to get back to you with that information, because they are not done with their own research in that market. But they have been very excited about the product. When we first introduced ourselves to each other, they are in the brand side of the marketing in Europe, and they said this product has great potential there. They wanted to work with us, and have been on the study we doing, and work with us to get us into the European Union, which is their expertise. So they are putting a lot of effort behind it. There won't be any money up front, at least nothing that we've talked about at the moment, except to purchase goods. We have explored ideas about them even making it locally in their facility, because they are a manufacturing company, but that's all very preliminary. The important thing for us is the reception we received at MHRA was very rewarding. It didn't give us any cause to pause and think we won't be able to launch in that market; just the opposite. We talked to them about using the study that was done here in the U.S. as part of the application process. So it was more of a technical meeting, but a very positive one, according to my representatives, and of course the people from Italy that were there. So I'm liking that comment on that one. I don't want to get too optimistic, but we're excited about it. [Indiscernible] the U.S. market gives it a global reach, and we do think this has great potential. Did we lose you?

Yes, operator Eric, are we still on the call?

Let me see here.

Eric, it looks like we lost Craig.

It looks like Craig did drop.

Then do you want to go on to the next question?

Yes. If you want to go to the next questioner and Craig will call back in.

Our next question comes from Scott Henry from ROTH Capital. Scott, Your line is now open.

Just a couple modeling questions. First, the anti-psychosis category came in at $17.3 million. I believe that had the recent approval. How should we think about that category sequentially and for the full year?

Yes, I think you can see you on that category increasing about some 20% or so as we go through the remainder of the year. Each quarter is up 10% to 20% above the first quarter, Scott.

Now, is that sequentially? Or each quarter will be meaning will the third quarter be 10% to 20% above second or first?

To be clear, the first quarter is about $17 million, so the second quarter is in the range of about $20 million you could use for each of the remaining three quarters.

Okay. Thank you for that color. And then in the CNS line for first quarter, that was about $10.4 million. Approximately how much of that was methylphenidate? Just trying to get an idea of how big that product is within that category.

Well, it was about 60% to 70% of that.

Okay. And let's see thank you, that's helpful. And then pain management continues to be kind of a laggard. Should we expect that to pick up in the rest of the year, or is it just we are going to have to wait for a C Topical? How should we think about that category?

Yes, I think you have to well, it's the largest single product in that category, as we have said before, is C Topical. But stay tuned. One of the new products that Arthur is we're hopeful about for fiscal 2017 would be in that category. So all I can say there is, stay tuned.

Okay. And then just throwing in the obligatory DoJ question, based on investigations you've had in the past, would you expect any interaction in the coming months? Or how should we think of data points to get any color, going forward?

Well, first of all, to be clear, we don't have it experience in this field at all, because this is our first investigation of this sort. So I can't go back into the history of Lannett and find any similar situation. I don't see anything happening. Because you would know by now, after 2.5 years, whether there was anything uncovered, let's say, that wasn't to discuss with outside counsel. So there's really nothing to report. I'm an optimist because, after 2.5 years, it really has not produced anything to contradict the outside counsel's viewpoint as to what transpired within Lannett and its employees, and any external communications they had. So, I'm comfortable that it's going to be over, finally. That's the relief, in some respects. But, no, there's nothing else we can do except sit and wait. I feel that for my shareholders who are suffering, along with some of us in the Company with this kind of reaction. I know we said we haven't done anything a while ago, and we continue to say that.

Okay, great. Thank you for the color on that, and thank you for taking the questions.

And our next question comes from Elliot Wilbur from Raymond James. Elliot your line is open.

Just a quick follow-up going back to methylphenidate, Arthur. Has there been, or had there been product returns from any of your existing customers? Or have any of them canceled orders or expressed an unwillingness to use the product, based on what has happened? And obviously implications are if it's able to remain on the market with a BX rating. Just trying to see if there's been any reaction, or the FDA's evaluation of the product.

No, there has not been any returns. No one has canceled any orders. So it just continues to be business as usual. And look, again, we wanted to be conservative because none of us have a crystal ball. But it's been business as usual. There's been no drop-off whatsoever.

We have no additional questions at this time.

Okay. Well, thank you very much, everybody. And again, next time, I'll check the news before I go forward with the music selection. There's always a chance to change it at the last minute. Obviously the news has hurt our stock and it's hurt all of my employees, and myself as well. I feel bad about all that. So I don't mean to make light of it with the selection of the song. We did look forward to having the good news to give to everybody based on the hard work and the integration and everything we've been accomplishing here. It's unfortunate this news came out on the day of our earnings. So look forward to talking to everybody at the next quarter. Thank you.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.