Lannett (LCINQ) 10-Q5 Nov 202021 Q1 Quarterly reportFinancial data

Company Profile

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Sep. 30, 2020	Oct. 31, 2020
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2020
Entity File Number	001-31298
Entity Registrant Name	LANNETT CO INC
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	23-0787699
Entity Address, Address Line One	9000 State Road
Entity Address, City or Town	Philadelphia
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	19136
City Area Code	215
Local Phone Number	333-9000
Title of 12(b) Security	Common Stock
Trading Symbol	LCI
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		41,625,636
Entity Central Index Key	0000057725
Current Fiscal Year End Date	--06-30
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Amendment Flag	false

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2020	Jun. 30, 2020
Current assets:
Cash and cash equivalents	$ 108,774	$ 144,329
Accounts receivable, net	138,796	125,688
Inventories	156,478	142,867
Income taxes receivable	19,703	14,419
Assets held for sale	2,678	2,678
Other current assets	15,787	13,227
Total current assets	442,216	443,208
Property, plant and equipment, net	176,984	179,518
Intangible assets, net	369,146	374,735
Operating lease right-of-use assets	9,085	9,343
Deferred tax assets	120,462	117,890
Other assets	14,027	11,861
TOTAL ASSETS	1,131,920	1,136,555
Current liabilities:
Accounts payable	47,539	32,535
Accrued expenses	15,609	14,962
Accrued payroll and payroll-related expenses	9,581	16,304
Rebates payable	43,247	38,175
Royalties payable	18,366	20,863
Restructuring liability	405	27
Current operating lease liabilities	2,018	1,097
Short-term borrowings and current portion of long-term debt	81,314	88,189
Other current liabilities	1,125	2,713
Total current liabilities	219,204	214,865
Long-term debt, net	586,270	592,940
Long-term operating lease liabilities	9,546	9,844
Other liabilities	17,585	16,010
TOTAL LIABILITIES	832,605	833,659
Commitments (Note 12)
STOCKHOLDERS' EQUITY
Common stock ($0.001 par value, 100,000,000 shares authorized; 40,687,784 and 39,963,127 shares issued; 39,393,357 and 38,798,787 shares outstanding at September 30, 2020 and June 30, 2020, respectively)	41	40
Additional paid-in capital	324,788	321,164
Accumulated deficit	(7,790)	(1,291)
Accumulated other comprehensive loss	(548)	(627)
Treasury stock (1,294,427 and 1,164,340 shares at September 30, 2020 and June 30, 2020, respectively)	(17,176)	(16,390)
Total stockholders' equity	299,315	302,896
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 1,131,920	$ 1,136,555

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2020	Jun. 30, 2020
CONSOLIDATED BALANCE SHEETS
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized shares	100,000,000	100,000,000
Common stock, issued shares	40,687,784	39,963,127
Common stock, outstanding shares	39,393,357	38,798,787
Treasury stock, shares	1,294,427	1,164,340

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
CONSOLIDATED STATEMENTS OF OPERATIONS
Net sales	$ 126,479	$ 127,342
Cost of sales	92,187	77,656
Amortization of intangibles	8,589	7,028
Gross profit	25,703	42,658
Operating expenses:
Research and development expenses	6,539	8,940
Selling, general and administrative expenses	15,136	21,308
Restructuring expenses	4,043	1,388
Asset impairment charges		1,618
Total operating expenses	25,718	33,254
Operating income (loss)	(15)	9,404
Other income (loss):
Loss on extinguishment of debt		(2,145)
Investment income	45	729
Interest expense	(14,486)	(19,292)
Other	(23)	934
Total other loss	(14,464)	(19,774)
Loss before income tax	(14,479)	(10,370)
Income tax expense (benefit)	(7,980)	1,787
Net loss	$ (6,499)	$ (12,157)
Loss per common share:
Basic (in dollars per share)	$ (0.17)	$ (0.32)
Diluted (in dollars per share)	$ (0.17)	$ (0.32)
Weighted average common shares outstanding:
Basic (in shares)	39,070,982	38,309,267
Diluted (in shares)	39,070,982	38,309,267

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Net loss	$ (6,499)	$ (12,157)
Other comprehensive income (loss):
Foreign currency translation gain (loss)	79	(46)
Total other comprehensive income (loss)	79	(46)
Comprehensive loss	$ (6,420)	$ (12,203)

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)	Treasury Stock	Total
Balance, beginning at Jun. 30, 2019	$ 39	$ 317,023	$ 32,075	$ (615)	$ (14,481)	$ 334,041
Balance, beginning (in shares) at Jun. 30, 2019	38,970
Increase (Decrease) in Shareholders' Equity
Shares issued in connection with share-based compensation plans	$ 1	235				236
Shares issued in connection with share-based compensation plans (in shares)	660
Share-based compensation		4,459				4,459
Purchase of treasury stock					(1,357)	(1,357)
Other comprehensive income				(46)		(46)
Purchase of capped call		(7,072)				(7,072)
Net loss			(12,157)			(12,157)
Balance, ending at Sep. 30, 2019	$ 40	314,645	19,918	(661)	(15,838)	318,104
Balance, ending (in shares) at Sep. 30, 2019	39,630
Balance, beginning at Jun. 30, 2020	$ 40	321,164	(1,291)	(627)	(16,390)	302,896
Balance, beginning (in shares) at Jun. 30, 2020	39,963
Increase (Decrease) in Shareholders' Equity
Shares issued in connection with share-based compensation plans	$ 1	282				283
Shares issued in connection with share-based compensation plans (in shares)	724
Share-based compensation		3,342				3,342
Purchase of treasury stock					(786)	(786)
Other comprehensive income				79		79
Net loss			(6,499)			(6,499)
Balance, ending at Sep. 30, 2020	$ 41	$ 324,788	$ (7,790)	$ (548)	$ (17,176)	$ 299,315
Balance, ending (in shares) at Sep. 30, 2020	40,687

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
OPERATING ACTIVITIES:
Net loss	$ (6,499)	$ (12,157)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	14,342	12,789
Deferred income tax benefit	(2,572)	(1,091)
Share-based compensation	3,342	4,459
Asset impairment charges		1,618
Loss (gain) on sale/disposal of assets	(6)	(1,298)
Loss on extinguishment of debt		2,145
Amortization of debt discount and other debt issuance costs	3,277	4,008
Other noncash expenses	242	379
Changes in assets and liabilities which provided (used) cash:
Accounts receivable, net	(13,108)	(8,357)
Inventories	(13,611)	(5,191)
Income taxes receivable/payable	(5,106)	(2,193)
Other assets	(4,821)	6,789
Rebates payable	5,072	(2,817)
Royalties payable	(2,497)	382
Restructuring liability	378	(1,148)
Operating lease liability	623	(364)
Accounts payable	15,004	13,434
Accrued expenses	647	471
Accrued payroll and payroll-related expenses	(6,723)	(7,577)
Other liabilities	(191)
Net cash provided by (used in) operating activities	(12,207)	4,281
INVESTING ACTIVITIES:
Purchases of property, plant and equipment	(3,227)	(4,033)
Proceeds from sale of property, plant and equipment	14	6,305
Advance to VIE		(250)
Purchases of intangible assets	(3,000)	(23,500)
Net cash used in investing activities	(6,213)	(21,478)
FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt		86,250
Purchase of capped call		(7,072)
Repayments of long-term debt	(16,711)	(96,566)
Proceeds from issuance of stock	283	236
Payment of debt issuance costs		(3,489)
Purchase of treasury stock	(786)	(1,357)
Net cash used in financing activities	(17,214)	(21,998)
Effect on cash and cash equivalents of changes in foreign exchange rates	79	(46)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(35,555)	(39,241)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	144,329	140,249
CASH AND CASH EQUIVALENTS, END OF PERIOD	108,774	101,008
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid	10,241	15,316
Income taxes paid (refunded)	(303)	5,070
Accrued purchases of property, plant and equipment	$ 1,981	$ 1,770

Interim Financial Information

Interim Financial Information	3 Months Ended
Interim Financial Information	Sep. 30, 2020
Interim Financial Information
Interim Financial Information	Note 1. Interim Financial Information The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for the presentation of interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited financial statements do not include all the information and footnotes necessary for a comprehensive presentation of the financial position, results of operations and cash flows for the periods presented. In the opinion of management, the unaudited financial statements include all the normal recurring adjustments that are necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented. Operating results for the three months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2021. These unaudited financial statements should be read in combination with the other Notes in this section; “Management’s Discussion and Analysis of Financial Condition and Results of Operations” appearing in Item 2; and the Consolidated Financial Statements, including the Notes to the Consolidated Financial Statements, included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020. The Consolidated Balance Sheet as of June 30, 2020 was derived from audited financial statements.

The Business And Nature of Oper

The Business And Nature of Operations	3 Months Ended
The Business And Nature of Operations	Sep. 30, 2020
The Business And Nature of Operations
The Business And Nature of Operations	Note 2. The Business And Nature of Operations Lannett Company, Inc. (a Delaware corporation) and its subsidiaries (collectively, the “Company” or “Lannett”) primarily develop, manufacture, package, market and distribute solid oral and extended release (tablets and capsules), topical, nasal and oral solution finished dosage forms of drugs that address a wide range of therapeutic areas. Certain of these products are manufactured by others and distributed by the Company. The Company operates pharmaceutical manufacturing plants in Carmel, New York and Seymour, Indiana. The Company’s customers include generic pharmaceutical distributors, drug wholesalers, chain drug stores, private label distributors, mail-order pharmacies, other pharmaceutical manufacturers, managed care organizations, hospital buying groups, governmental entities and health maintenance organizations. COVID-19 Update In December 2019, the COVID-19 virus emerged in Wuhan, China and spread to other parts of the world. In March 2020, the World Health Organization (“WHO”) designated COVID-19 a global pandemic. Governments on the national, state and local level in the United States, and around the world, implemented lockdown and shelter-in-place orders, requiring many non-essential businesses to shut down operations. The Company’s business, however, is deemed “essential” and it has continued to operate, manufacture, and distribute its medicines to customers. In light of the economic impacts of COVID-19, the Company performed a review of the assets on our Consolidated Balance Sheet as of September 30, 2020, including intangible and other long-lived assets. Based on our review, we believe that we will be able to realize the full value of our assets and that a triggering event does not exist at this time. As such, no impairments or other write-downs were recorded during the first three months of Fiscal Year 2021 specifically related to COVID-19. Our assessment is based on information currently available and is highly reliant on various assumptions. Changes in market conditions could impact the Company’s future outlook and may lead to impairments in the future. While COVID-19 has thus far not had a material impact on the Company’s operations, subsequent to an initial stocking up of supplies at the start of the pandemic, the total volume of drug prescriptions being written in the country has decreased causing less demand for our products. We cannot reasonably predict the ultimate impact of COVID-19 on our future results of operations and cashflows due to the continued uncertainty around the duration and severity of the pandemic.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
Summary of Significant Accounting Policies	Sep. 30, 2020
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	Note 3. Summary of Significant Accounting Policies Basis of Presentation The Consolidated Financial Statements have been prepared in conformity with U.S. GAAP. Principles of consolidation The Consolidated Financial Statements include the accounts of Lannett Company, Inc. and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated. Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions are required in the determination of revenue recognition and sales deductions for estimated chargebacks, rebates, returns and other adjustments including a provision for the Company’s liability under the Medicare Part D program. Additionally, significant estimates and assumptions are required when determining the value of inventories and long-lived assets, including intangible assets, income taxes, contingencies and share-based compensation. Because of the inherent subjectivity and complexity involved in these estimates and assumptions, actual results could differ from those estimates. Foreign currency translation The Consolidated Financial Statements are presented in U.S. dollars, the reporting currency of the Company. The financial statements of the Company’s foreign subsidiary are maintained in local currency and translated into U.S. dollars at the end of each reporting period. Assets and liabilities are translated at period-end exchange rates, while revenues and expenses are translated at average exchange rates during the period. The adjustments resulting from the use of differing exchange rates are recorded as part of stockholders’ equity in accumulated other comprehensive income (loss). Gains and losses resulting from transactions denominated in foreign currencies are recognized in the Consolidated Statements of Operations under other income (loss). Amounts recorded due to foreign currency fluctuations are immaterial to the Consolidated Financial Statements. Cash and cash equivalents The Company considers all highly liquid investments with original maturities less than or equal to three months at the date of purchase to be cash and cash equivalents. Cash and cash equivalents are stated at cost, which approximates fair value, and consist of bank deposits and money market funds. The Company maintains its cash deposits and cash equivalents at well-known, stable financial institutions. Such amounts frequently exceed insured limits. Allowance for doubtful accounts On July 1, 2020, the Company adopted guidance issued by the FASB in ASU 2016-13, Measurement of Credit Losses on Financial Instruments , which requires the Company to recognize an allowance that reflects a current estimate of credit losses expected to be incurred over the life of the financial asset, including trade receivables. The adoption of ASU 2016-13 did not have a material impact on the Company’s Consolidated Financial Statements for the three months ended September 30, 2020. The Company continuously monitors collections and payments from its customers and maintains a provision for estimated credit losses. The Company determines its allowance for doubtful accounts by considering a number of factors, including the length of time balances are past due, the Company’s previous loss history, the customer’s current ability to pay its obligations to the Company and the expected condition of the general economy and the industry as a whole. The Company writes off accounts receivable when they are determined to be uncollectible. Inventories Inventories are stated at the lower of cost or net realizable value by the first-in, first-out method. Inventories are regularly reviewed and write-downs for excess and obsolete inventory are recorded based primarily on current inventory levels, expiration date and estimated sales forecasts. Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation is computed on a straight-line basis over the assets’ estimated useful lives. Repairs and maintenance costs that do not extend the useful life of the asset are expensed as incurred. Intangible Assets Definite-lived intangible assets are stated at cost less accumulated amortization. Amortization of definite-lived intangible assets is computed on a straight-line basis over the assets’ estimated useful lives which commences upon shipment of the product, generally for periods ranging from 5 to 15 years . The Company continually evaluates the reasonableness of the useful lives of these assets. Indefinite-lived intangible assets are not amortized, but instead are tested at least annually for impairment. Costs to renew or extend the term of a recognized intangible asset are expensed as incurred. Valuation of Long-Lived Assets, including Intangible Assets The Company’s long-lived assets primarily consist of property, plant and equipment and definite and indefinite-lived intangible assets. Property, plant and equipment and definite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances (“triggering events”) indicate that the carrying amount of the asset may not be recoverable. If a triggering event is determined to have occurred, the asset’s carrying value is compared to the future undiscounted cash flows expected to be generated by the asset. If the carrying value exceeds the undiscounted cash flows of the asset, then impairment exists. Indefinite-lived intangible assets are tested for impairment at least annually during the fourth quarter of each fiscal year or more frequently if events or triggering events indicate that the asset might be impaired. An impairment loss is measured as the excess of the asset’s carrying value over its fair value, which in most cases is calculated using a discounted cash flow model. Discounted cash flow models are highly reliant on various assumptions which are considered Level 3 inputs, including estimates of future cash flows (including long-term growth rates), discount rates and the probability of achieving the estimated cash flows. In-Process Research and Development Amounts allocated to in-process research and development in connection with a business combination are recorded at fair value and are considered indefinite-lived intangible assets subject to impairment testing in accordance with the Company’s impairment testing policy for indefinite-lived intangible assets. As products in development are approved for sale, amounts will be allocated to product rights and will be amortized over their estimated useful lives. Definite-lived intangible assets are amortized over the expected lives of the related assets. The judgments made in determining the estimated fair value of in-process research and development, as well as asset lives, can materially impact our results of operations. The Company’s fair value assessments are highly reliant on various assumptions which are considered Level 3 inputs, including estimates of future cash flows (including long-term growth rates), discount rates and the probability of achieving the estimated cash flows. Segment Information The Company operates in one reportable segment, generic pharmaceuticals. As such, the Company aggregates its financial information for all products. The table below identifies the Company’s net sales by medical indication for the three months ended September 30, 2020 and 2019. Three Months Ended (In thousands) September 30, Medical Indication 2020 2019 Analgesic $ 3,120 $ 1,884 Anti-Psychosis 13,028 28,034 Cardiovascular 19,714 21,606 Central Nervous System 22,525 19,257 Endocrinology 3,233 — Gastrointestinal 17,100 16,962 Infectious Disease 21,932 11,895 Migraine 9,690 9,143 Respiratory/Allergy/Cough/Cold 1,426 2,707 Urinary 1,458 435 Other 7,634 9,861 Contract manufacturing revenue 5,619 5,558 Total net sales $ 126,479 $ 127,342 Customer, Supplier and Product Concentration The following table presents the percentage of total net sales, for the three months ended September 30, 2020 and 2019, for certain of the Company’s products, defined as products containing the same active ingredient or combination of ingredients, which accounted for at least 10% of net sales in any of those periods: Three Months Ended September 30, 2020 2019 Product 1 15 % 7 % Product 2 9 % 20 % The following table presents the percentage of total net sales, for the three months ended September 30, 2020 and 2019, for certain of the Company’s customers which accounted for at least 10% of net sales in any of those periods: Three Months Ended September 30, 2020 2019 Customer A 26 % 25 % Customer B 22 % 27 % Customer C 10 % 13 % Revenue Recognition The Company complies with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers Revenue Recognition . Under ASC 606, the Company recognizes revenue when (or as) we satisfy our performance obligations by transferring a promised good or service to a customer at an amount that reflects the consideration the Company is expected to be entitled. Our revenue consists almost entirely of sales of our pharmaceutical products to customers, whereby we ship product to a customer pursuant to a purchase order. Revenue contracts such as these do not generally give rise to contract assets or contract liabilities because: (i) the underlying contracts generally have only a single performance obligation and (ii) we do not generally receive consideration until the performance obligation is fully satisfied. The revenue standard impacts the timing of the Company’s revenue recognition by requiring recognition of certain contract manufacturing arrangements to change from “upon shipment or delivery” to “over time”. However, the recognition of these arrangements over time does not currently have a material impact on the Company’s consolidated results of operations or financial position. When revenue is recognized, a simultaneous adjustment to gross sales is made for estimated chargebacks, rebates, returns, promotional adjustments and other potential adjustments. These provisions are primarily estimated based on historical experience, future expectations, contractual arrangements with wholesalers and indirect customers and other factors known to management at the time of accrual. Accruals for provisions are presented in the Consolidated Financial Statements as a reduction to gross sales with the corresponding reserve presented as a reduction of accounts receivable or included as rebates payable, depending on the nature of the reserve. Provisions for chargebacks, rebates, returns and other adjustments require varying degrees of subjectivity. While rebates generally are based on contractual terms and require minimal estimation, chargebacks and returns require management to make more subjective assumptions. Each major category is discussed in detail below: Chargebacks The provision for chargebacks is the most significant and complex estimate used in the recognition of revenue. The Company sells its products directly to wholesale distributors, generic distributors, retail pharmacy chains and mail-order pharmacies. The Company also sells its products indirectly to independent pharmacies, managed care organizations, hospitals, nursing homes and group purchasing organizations, collectively referred to as “indirect customers.” The Company enters into agreements with its indirect customers to establish pricing for certain products. The indirect customers then independently select a wholesaler from which to purchase the products. If the price paid by the indirect customers is lower than the price paid by the wholesaler, the Company will provide a credit, called a chargeback, to the wholesaler for the difference between the contractual price with the indirect customers and the wholesaler purchase price. The provision for chargebacks is based on expected sell-through levels by the Company’s wholesale customers to the indirect customers and estimated wholesaler inventory levels. As sales to the large wholesale customers, such as Cardinal Health, AmerisourceBergen and McKesson increase (decrease), the reserve for chargebacks will also generally increase (decrease). However, the size of the increase (decrease) depends on product mix and the amount of sales made to indirect customers with which the Company has specific chargeback agreements. The Company continually monitors the reserve for chargebacks and makes adjustments when management believes that expected chargebacks may differ from the actual chargeback reserve. Rebates Rebates are offered to the Company’s key chain drug store, distributor and wholesaler customers to promote customer loyalty and increase product sales. These rebate programs provide customers with credits upon attainment of pre-established volumes or attainment of net sales milestones for a specified period. Other promotional programs are incentive programs offered to the customers. Additionally, as a result of the Patient Protection and Affordable Care Act (“PPACA”) enacted in the U.S. in March 2010, the Company participates in a cost-sharing program for certain Medicare Part D beneficiaries designed primarily for the sale of brand drugs and certain generic drugs if their Food and Drug Administration (“FDA”) approval was granted under a New Drug Application (“NDA”) or 505(b) NDA versus an Abbreviated New Drug application ("ANDA’). Drugs purchased within the Medicare Part D coverage gap (commonly referred to as the “donut hole”) result in additional rebates. The Company estimates the reserve for rebates and other promotional credit programs based on the specific terms in each agreement when revenue is recognized. The reserve for rebates increases (decreases) as sales to certain wholesale and retail customers increase (decrease). However, since these rebate programs are not identical for all customers, the size of the reserve will depend on the mix of sales to customers that are eligible to receive rebates. Returns Consistent with industry practice, the Company has a product returns policy that allows customers to return product within a specified time period prior to and subsequent to the product’s expiration date in exchange for a credit to be applied to future purchases. The Company’s policy requires that the customer obtain pre-approval from the Company for any qualifying return. The Company estimates its provision for returns based on historical experience, changes to business practices, credit terms and any extenuating circumstances known to management. While historical experience has allowed for reasonable estimations in the past, future returns may or may not follow historical trends. The Company continually monitors the reserve for returns and makes adjustments when management believes that actual product returns may differ from the established reserve. Generally, the reserve for returns increases as net sales increase. Other Adjustments Other adjustments consist primarily of “price adjustments”, also known as “shelf-stock adjustments” and “price protections,” which are both credits issued to reflect increases or decreases in the invoice or contract prices of the Company’s products. In the case of a price decrease, a credit is given for product remaining in customer’s inventories at the time of the price reduction. Contractual price protection results in a similar credit when the invoice or contract prices of the Company’s products increase, effectively allowing customers to purchase products at previous prices for a specified period of time. Amounts recorded for estimated shelf-stock adjustments and price protections are based upon specified terms with direct customers, estimated changes in market prices and estimates of inventory held by customers. The Company regularly monitors these and other factors and evaluates the reserve as additional information becomes available. Other adjustments also include prompt payment discounts and “failure-to-supply” adjustments. If the Company is unable to fulfill certain customer orders, the customer can purchase products from our competitors at their prices and charge the Company for any difference in our contractually agreed upon prices. Leases On July 1, 2019, the Company adopted ASC Topic 842, Leases Leases . Under ASC 842, when the Company enters into a new arrangement, it must determine, at the inception date, whether the arrangement is or contains a lease. This determination generally depends on whether the arrangement conveys to the Company the right to control the use of an explicitly or implicitly identified asset for a period of time in exchange for consideration. Control of an underlying asset is conveyed to the Company if the Company obtains the rights to direct the use of and to obtain substantially all of the economic benefits from using the underlying asset. Once a lease has been identified, the Company must determine the lease term, the present value of lease payments and the classification of the lease as either operating or financing. The lease term is determined to be the non-cancelable period including any lessee renewal options which are considered to be reasonably certain of exercise. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. The present value of lease payments includes fixed and certain variable payments, less lease incentives, together with amounts probable of being owed by the Company under residual value guarantees and, if reasonably certain of being paid, the cost of certain renewal options and early termination penalties set forth in the lease arrangement. To calculate the present value of lease payments, we use our incremental borrowing rate based on the information available at commencement date, as the rate implicit in the lease is generally not readily available. In making the determination of whether a lease is an operating lease or a finance lease, the Company considers the lease term in relation to the economic life of the leased asset, the present value of lease payments in relation to the fair value of the leased asset and certain other factors. Upon the commencement of the lease, the Company will record a lease liability and right-of-use (“ROU”) asset based on the present value of the future minimum lease payments over the lease term at commencement date. The ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. For operating leases, a single lease cost is generally recognized in the Consolidated Statements of Operations on a straight-line basis over the lease term unless an impairment has been recorded with respect to a leased asset. For finance leases, amortization expense and interest expense are recognized separately in the Consolidated Statements of Operations, with amortization expense generally recorded on a straight-line basis and interest expense recorded using the effective interest method. Variable lease costs not initially included in the lease liability and ROU asset impairment charges are expensed as incurred. Cost of Sales, including Amortization of Intangibles Cost of sales includes all costs related to bringing products to their final selling destination, which includes direct and indirect costs, such as direct material, labor and overhead expenses. Additionally, cost of sales includes product royalties, depreciation, amortization and costs to renew or extend recognized intangible assets, freight charges and other shipping and handling expenses. Research and Development Research and development costs are expensed as incurred, including all production costs until a drug candidate is approved by the FDA. Research and development expenses include costs associated with internal projects as well as costs associated with third-party research and development contracts. Contingencies Loss contingencies, including litigation-related contingencies, are included in the Consolidated Statements of Operations when the Company concludes that a loss is both probable and reasonably estimable. Legal fees for litigation-related matters are expensed as incurred and included in the Consolidated Statements of Operations under the Selling, general and administrative expenses line item. Restructuring Costs The Company records charges associated with approved restructuring plans to remove duplicative headcount and infrastructure associated with business acquisitions or to simplify business processes. Restructuring charges can include severance costs to eliminate a specified number of employees, infrastructure charges to vacate facilities and consolidate operations and contract cancellation costs. The Company records restructuring charges based on estimated employee terminations, site closure and consolidation plans. The Company accrues severance and other employee separation costs under these actions when it is probable that a liability exists and the amount is reasonably estimable. Share-based Compensation Share-based compensation costs are recognized over the vesting period, using a straight-line method, based on the fair value of the instrument on the date of grant less an estimate for expected forfeitures. The Company uses the Black-Scholes valuation model to determine the fair value of stock options, the stock price on the grant date to value restricted stock and the Monte-Carlo simulation model to determine the fair value of performance-based shares. The Black-Scholes valuation and Monte-Carlo simulation models include various assumptions, including the expected volatility, the expected life of the award, dividend yield and the risk-free interest rate as well as performance assumptions of peer companies. These assumptions involve inherent uncertainties based on market conditions which are generally outside the Company’s control. Changes in these assumptions could have a material impact on share-based compensation costs recognized in the Consolidated Financial Statements. Self-Insurance The Company self-insures for certain employee medical and prescription benefits. The Company also maintains stop loss coverage with third party insurers to limit its total liability exposure. The liability for self-insured risks is primarily calculated using independent third-party actuarial valuations which take into account actual claims, claims growth and claims incurred but not yet reported. Actual experience, including claim frequency and severity as well as health-care inflation, could result in different liabilities than the amounts currently recorded. The liability for self-insured risks under this plan was not material to the consolidated financial position of the Company as of September 30, 2020 and June 30, 2020. Income Taxes The Company uses the liability method to account for income taxes as prescribed by ASC 740, Income Taxes Deferred income tax assets and liabilities are adjusted to recognize the effects of changes in tax laws or enacted tax rates in the period during which they are signed into law. The factors used to assess the likelihood of realization are the Company’s forecast of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. Under ASC 740, Income Taxes , a valuation allowance is required when it is more likely than not that all or some portion of the deferred tax assets will not be realized through generating sufficient future taxable income. Failure to achieve forecasted taxable income in applicable tax jurisdictions could affect the ultimate realization of deferred tax assets and could result in an increase in the Company’s effective tax rate on future earnings. The Company may recognize the tax benefit from an uncertain tax position claimed on a tax return only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The authoritative accounting standards also provide guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. On March 27, 2020, in response to COVID-19 and its detrimental impact to the global economy, President Trump signed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) into law, which provides a stimulus to the U.S. economy in the form of various individual and business assistance programs as well as temporary changes to existing tax law. Among the changes to the provision in business tax laws include a five-year net operating loss carryback for the Fiscal 2019 - 2021 tax years, a deferral of the employer’s portion of certain payroll tax, and an increase in the interest expense deductibility limitation for the Fiscal 2020 and 2021 tax years. ASC 740 requires the tax effects of changes in tax laws or rates to be recorded in the period of enactment. As a result of the CARES Act, the Company carried back its Fiscal 2020 taxable loss into the Fiscal 2015 tax year. The Company also reviewed its existing deferred tax assets in light of COVID-19 and determined that no additional valuation allowance is required at this time. However, the Company will continue to monitor the status of the COVID-19 pandemic and its impact on our results of operations. Earnings (Loss) Per Common Share A dual presentation of basic and diluted earnings (loss) per common share is required on the face of the Company's Consolidated Statements of Operations as well as a reconciliation of the computation of basic earnings (loss) per common share to diluted earnings (loss) per common share. Basic earnings (loss) per common share excludes the dilutive impact of potentially dilutive securities and is computed by dividing net income (loss) by the weighted average number of shares outstanding during the period. Beginning in the first quarter of Fiscal 2020, the Company's diluted earnings (loss) per common share is computed using the "if-converted" method by dividing the adjusted "if-converted" net income by the adjusted weighted average number of shares of common stock outstanding during the period. The adjusted "if-converted" net income is adjusted for interest expense and amortization of debt issuance costs, both net of tax, associated with the Company’s 4.50% Convertible Senior Notes due 2026. The weighted average number of diluted shares is adjusted for the potential dilutive effect of the exercise of stock options, treats unvested restricted stock and performance-based shares as if it were vested, and assumes the conversion of the 4.50% Convertible Senior Notes. Anti-dilutive securities are excluded from the calculation. Dilutive shares are also excluded in the calculation in periods of net loss because the effect of including such securities would be anti-dilutive. Comprehensive Income (Loss) Comprehensive income (loss) includes all changes in equity during a period except those that resulted from investments by or distributions to the Company’s stockholders. Other comprehensive income (loss) refers to gains and losses that are included in comprehensive income (loss), but excluded from income (loss) for all amounts are recorded directly as an adjustment to stockholders’ equity. Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity

Restructuring Charges

Restructuring Charges	3 Months Ended
Restructuring Charges	Sep. 30, 2020
Restructuring Charges
Restructuring Charges	Note 4. Restructuring Charges 2020 Restructuring Program On July 10, 2020, the Board of Directors authorized a restructuring and cost savings plan (the “2020 Restructuring Plan”). The purpose of the 2020 Restructuring Plan is to enhance manufacturing efficiencies, streamline operations and reduce the Company’s cost structure, and was implemented, in part, as a result of previously anticipated near-term competition and pricing pressure with respect to certain key products. The 2020 Restructuring Plan includes the consolidation of the Company’s R&D function into a single location in Philadelphia, PA, lowering operating costs and reducing the workforce by approximately 80 positions, equal to approximately 8.5% of the Company’s total number of employees. The 2020 Restructuring Plan was initiated on July 13, 2020. The Company incurred $4.0 million in severance-related costs in the first quarter of Fiscal 2021 in connection with the 2020 Restructuring Plan. The Company expects the 2020 Restructuring Plan to result in annual cost savings in excess of $15.0 million. A reconciliation of the changes in restructuring liabilities associated with the 2020 Restructuring Plan from June 30, 2020 through September 30, 2020 is set forth in the following table: Employee (In thousands) Separation Costs Total Balance at June 30, 2020 $ — $ — Restructuring Charges 4,043 4,043 Payments (3,638) (3,638) Balance at September 30, 2020 $ 405 $ 405

Accounts Receivable, net

Accounts Receivable, net	3 Months Ended
Accounts Receivable, net	Sep. 30, 2020
Accounts Receivable, net
Accounts Receivable, net	Note 5. Accounts Receivable, net Accounts receivable, net consisted of the following components at September 30, 2020 and June 30, 2020: September 30, June 30, (In thousands) 2020 2020 Gross accounts receivable $ 284,751 $ 271,557 Less: Chargebacks reserve (70,437) (61,877) Less: Rebates reserve (17,303) (24,536) Less: Returns reserve (40,535) (40,796) Less: Other deductions (16,597) (17,557) Less: Allowance for doubtful accounts (1,083) (1,103) Accounts receivable, net $ 138,796 $ 125,688 For the three months ended September 30, 2020, the Company recorded a provision for chargebacks, rebates (including rebates presented as rebates payable), returns and other deductions of $188.3 million, $34.3 million, $5.5 million and $15.8 million, respectively. For the three months ended September 30, 2019, the Company recorded a provision for chargebacks, rebates (including rebates presented as rebates payable), returns and other deductions of $207.9 million, $58.5 million, $3.7 million and $12.7 million, respectively. The following table identifies the activity and ending balances of each major category of revenue-related reserve for the three months ended September 30, 2020 and 2019: Reserve Category (In thousands) Chargebacks Rebates Returns Other Total Balance at June 30, 2020 $ 61,877 $ 62,711 $ 40,796 $ 17,557 $ 182,941 Current period provision 188,297 34,280 5,526 15,781 243,884 Credits issued during the period (179,737) (42,269) (5,787) (16,741) (244,534) Balance at September 30, 2020 $ 70,437 $ 54,722 $ 40,535 $ 16,597 $ 182,291 Reserve Category (In thousands) Chargebacks Rebates Returns Other Total Balance at June 30, 2019 $ 89,567 $ 78,274 $ 55,554 $ 18,128 $ 241,523 Current period provision 207,933 58,509 3,694 12,705 282,841 Credits issued during the period (214,017) (61,952) (5,256) (11,724) (292,949) Balance at September 30, 2019 $ 83,483 $ 74,831 $ 53,992 $ 19,109 $ 231,415 For the three months ending September 30, 2020 and 2019, as a percentage of gross sales the provision for chargebacks was 51.7% and 51.4%, the provision for rebates was 9.4% and 14.5%, the provision for returns was 1.5% and 0.9% and the provision for other adjustments was 4.3% and 3.1%, respectively. The increase in the chargebacks reserve was primarily due to timing of sales and product mix. The increase in the chargebacks reserve was offset by a decrease in the rebates reserve primarily due to lower sales of Fluphenazine in the first quarter of Fiscal 2021, which had higher than average government-related rebates. Historically, we have not recorded any material amounts in the current period related to reversals or additions of prior period reserves. If the Company were to record a material reversal or addition of any prior period reserve amount, it would be separately disclosed.

Inventories

Inventories	3 Months Ended
Inventories	Sep. 30, 2020
Inventories
Inventories	Note 6. Inventories Inventories at September 30, 2020 and June 30, 2020 consisted of the following: September 30, June 30, (In thousands) 2020 2020 Raw Materials $ 62,225 $ 59,703 Work-in-process 13,815 12,235 Finished Goods 80,438 70,929 Total $ 156,478 $ 142,867 During the three months ended September 30, 2020 and 2019, the Company recorded write-downs to net realizable value for excess and obsolete inventory of $2.6 million and $3.5 million, respectively.

Property, Plant and Equipment,

Property, Plant and Equipment, net	3 Months Ended
Property, Plant and Equipment, net	Sep. 30, 2020
Property, Plant and Equipment, net
Property, Plant and Equipment, net	Note 7. Property, Plant and Equipment, net Property, plant and equipment, net at September 30, 2020 and June 30, 2020 consisted of the following: September 30, June 30, (In thousands) Useful Lives 2020 2020 Land — $ 1,783 $ 1,783 Building and improvements 10 - 39 years 103,265 100,285 Machinery and equipment 5 - 10 years 165,896 164,704 Furniture and fixtures 5 - 7 years 3,343 3,116 Less accumulated depreciation (108,716) (102,983) 165,571 166,905 Construction in progress 11,413 12,613 Property, plant and equipment, net $ 176,984 $ 179,518 Depreciation expense was $5.8 million for the three months ended September 30, 2020 and 2019. Property, plant and equipment, net included amounts held in foreign countries in the amount of $0.6 million at September 30, 2020 and June 30, 2020.

Fair Value Measurements

Fair Value Measurements	3 Months Ended
Fair Value Measurements	Sep. 30, 2020
Fair Value Measurements
Fair Value Measurements	Note 8. Fair Value Measurements The Company’s financial instruments recorded in the Consolidated Balance Sheets include cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and debt obligations. The Company’s cash and cash equivalents include bank deposits and money market funds. The carrying value of certain financial instruments, primarily cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, approximate their estimated fair values based upon the short-term nature of their maturity dates. The Company follows the authoritative guidance of ASC Topic 820 “Fair Value Measurements and Disclosures.” Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The authoritative guidance also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company’s financial assets and liabilities measured at fair value are entirely within Level 1 of the hierarchy as defined below: Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. Level 2 — Directly or indirectly observable inputs, other than quoted prices, such as quoted prices for similar assets or liabilities; quoted prices for identical or similar instruments in markets that are not active; or model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3 — Unobservable inputs that are supported by little or no market activity and that are material to the fair value of the asset or liability. Financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation are examples of Level 3 assets and liabilities. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. Financial Instruments Disclosed, But Not Reported, at Fair Value We estimate the fair value of our debt utilizing market quotations for debt that have quoted prices in active markets. Since our debt does not trade on a daily basis in an active market, the fair value estimates are based on market observable inputs based on borrowing rates currently available for debt with similar terms and average maturities (Level 2). The estimated fair value of our term loan debt was approximately $592 million and $608 million as of September 30, 2020 and June 30, 2020, respectively. The estimated fair value of our 4.50% Convertible Senior Notes was approximately $52 million and $58 million as of September 30, 2020 and June 30, 2020, respectively. The fair value as of September 30, 2020 was lower than the carrying value primarily due to the Company’s stock price at September 30, 2020 as compared to the $15.29 conversion price.

Intangible Assets

Intangible Assets	3 Months Ended
Intangible Assets	Sep. 30, 2020
Intangible Assets
Intangible Assets	Note 9. Intangible Assets Intangible assets, net as of September 30, 2020 and June 30, 2020 consisted of the following: Weighted Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Avg. Life September 30, June 30, September 30, June 30, September 30, June 30, (In thousands) (Yrs.) 2020 2020 2020 2020 2020 2020 Definite-lived: KUPI product rights 15 416,154 416,154 (132,263) (125,327) 283,891 290,827 KUPI trade name 2 2,920 2,920 (2,920) (2,920) — — KUPI other intangible assets 15 19,000 19,000 (6,145) (5,828) 12,855 13,172 Silarx product rights 15 20,000 20,000 (3,889) (3,556) 16,111 16,444 Other product rights 10 53,718 50,718 (6,429) (5,426) 47,289 45,292 Total definite-lived $ 511,792 $ 508,792 $ (151,646) $ (143,057) $ 360,146 $ 365,735 Indefinite-lived: KUPI in-process research and development — $ 9,000 $ 9,000 $ — $ — $ 9,000 $ 9,000 Total indefinite-lived 9,000 9,000 — — 9,000 9,000 Total intangible assets, net $ 520,792 $ 517,792 $ (151,646) $ (143,057) $ 369,146 $ 374,735 For the three months ended September 30, 2020 and 2019, the Company recorded amortization expense of $8.6 million and $7.0 million, respectively. Future annual amortization expense consisted of the following as of September 30, 2020: (In thousands) Amortization Fiscal Year Ending June 30, Expense 2021 $ 25,873 2022 36,097 2023 35,795 2024 35,495 2025 35,095 Thereafter 191,791 $ 360,146

Long-Term Debt

Long-Term Debt	3 Months Ended
Long-Term Debt	Sep. 30, 2020
Long-Term Debt
Long-Term Debt	Note 10. Long-Term Debt Long-term debt, net consisted of the following: September 30, June 30, (In thousands) 2020 2020 Term Loan A due 2020; 6.00% as of September 30, 2020 $ 41,969 $ 48,844 Unamortized discount and other debt issuance costs (97) (433) Term Loan A, net 41,872 48,411 Term Loan B due 2022; 6.38% as of September 30, 2020 563,021 572,857 Unamortized discount and other debt issuance costs (20,573) (23,278) Term Loan B, net 542,448 549,579 4.50% Convertible Senior Notes due 2026 86,250 86,250 Unamortized discount and other debt issuance costs (2,986) (3,111) 4.50% Convertible Senior Notes, net 83,264 83,139 $125 million Revolving Credit Facility due 2020 — — Total debt, net 667,584 681,129 Less short-term borrowings and current portion of long-term debt (81,314) (88,189) Total long-term debt, net $ 586,270 $ 592,940 The weighted average interest rate for the three months ended September 30, 2020 and 2019 was 8.0% and 8.8%, respectively. The outstanding balance of the Term Loan A of $42.0 million is due on November 25, 2020, which the Company anticipates paying down with cash on hand. The $125 million Revolving Credit Facility, which is undrawn as of September 30, 2020, is also due to expire on November 25, 2020. Long-term debt amounts due, for the twelve-month periods ending September 30 are as follows: Amounts Payable (In thousands) to Institutions 2021 $ 81,314 2022 39,345 2023 484,331 2024 — 2025 — Thereafter 86,250 Total $ 691,240 The outstanding Term Loan A, Term Loan B and Revolving Credit Facility amounts above are guaranteed by all of Lannett’s significant wholly-owned domestic subsidiaries and are collateralized by substantially all present and future assets of the Company.

Legal, Regulatory Matters and C

Legal, Regulatory Matters and Contingencies	3 Months Ended
Legal, Regulatory Matters and Contingencies	Sep. 30, 2020
Legal, Regulatory Matters and Contingencies
Legal, Regulatory Matters and Contingencies	Note 11. Legal, Regulatory Matters and Contingencies State Attorneys General Inquiry into the Generic Pharmaceutical Industry In July 2014, the Company received interrogatories and a subpoena from the State of Connecticut Office of the Attorney General concerning its investigation into the pricing of digoxin. According to the subpoena, the Connecticut Attorney General is investigating whether anyone engaged in any activities that resulted in (a) fixing, maintaining or controlling prices of digoxin or (b) allocating and dividing customers or territories relating to the sale of digoxin in violation of Connecticut antitrust law. In June 2016, the Connecticut Attorney General issued interrogatories and a subpoena to an employee of the Company in order to gain access to documents and responses previously supplied to the Department of Justice pursuant to the federal investigation described below. In December 2016, the Connecticut Attorney General, joined by numerous other State Attorneys General, filed a civil complaint alleging that six pharmaceutical companies engaged in anti-competitive behavior. The Company was not named in the action and does not compete on the products that formed the basis of the complaint. The complaint was later transferred for pretrial purposes to the United States District Court for the Eastern District of Pennsylvania as part of a multidistrict litigation captioned In re: Generic Pharmaceuticals Pricing Antitrust Litigation. On October 31, 2017, the State Attorneys General filed a motion in the District Court for leave to amend their complaint to add numerous additional defendants, including the Company, and claims relating to 13 additional drugs. The Court granted that motion on June 5, 2018. The State Attorneys General filed their amended complaint on June 18, 2018. The claim relating to Lannett involves alleged price-fixing for one drug, doxycycline monohydrate, but does not involve the pricing for digoxin. The State Attorneys General also allege that all defendants were part of an overarching, industry-wide conspiracy to allocate markets and fix prices generally. On August 15, 2019, the Court denied the defendants' joint motion to dismiss the overarching conspiracy claims, but has yet to decide an individual motion filed by the Company to dismiss the overreaching conspiracy claims as to it. On May 10, 2019, the State Attorneys General filed a new lawsuit naming the Company, and one of its employees as defendants, along with 33 other corporations and individuals. The new complaint again alleges an overarching conspiracy and contains claims for price fixing and market allocation under the Sherman Act and related state laws. The complaint focuses on the conduct of another generic pharmaceutical company, and the relationships that company had with other generic companies and their employees. The specific allegations in the new complaint against Lannett relate to the Company’s sales of baclofen and levothyroxine. The new complaint also names another current employee as a defendant, however the allegations pertain to conduct that occurred prior to their employment by Lannett. The Company has not responded to the new complaint as of the date of this report. Based on internal investigations performed to date, the Company currently believes that it has acted in compliance with all applicable laws and regulations. Federal Investigation into the Generic Pharmaceutical Industry In November and December 2014, the Company and certain affiliated individuals and customers were served with grand jury subpoenas relating to a federal investigation of the generic pharmaceutical industry into possible violations of the Sherman Act. The subpoenas request corporate documents of the Company relating to corporate, financial and employee information, communications or correspondence with competitors regarding the sale of generic prescription medications and the marketing, sale, or pricing of certain products, generally for the period of 2005 through the dates of the subpoenas. The Company received a Civil Investigative Demand (“CID”) from the Department of Justice on May 14, 2018. The CID requests information regarding allegations that the generic pharmaceutical industry engaged in market allocation, price fixing, payment of illegal remuneration and submission of false claims. The CID requests information from 2009-present. The Company is in the process of responding to the CID. Based on internal investigations performed to date, the Company believes that it has acted in compliance with all applicable laws and regulations. Government Pricing During the quarter ended December 31, 2016, the Company completed a contract compliance review, for the period January 1, 2012 through June 30, 2016, for one of KUPI’s government-entity customers. As a result of the review, the Company identified certain commercial customer prices and other terms that were not properly disclosed to the government-entity resulting in potential overcharges. For the period January 1, 2012 through November 24, 2015 (“the pre-acquisition period”), the Company is fully indemnified per the Stock Purchase Agreement. On May 22, 2019, the Department of Veterans Affairs issued a Contracting Officer’s Final Decision and Demand for Payment, assessing the sum of $9.4 million for overpayments by the Veteran’s Administration for the period of January 1, 2012 through June 30, 2016. In August 2019, the Company remitted payment to the VA and received reimbursement from UCB for the indemnified portion of the payment in the amount of $8.1 million. The VA requested additional information for the period of July 1, 2016 through March 2018. The Company is in the process of responding to the information request. Private Antitrust and Consumer Protection Litigation In 2016 and 2017, the Company and certain competitors were named as defendants in a number of lawsuits alleging that the Company and certain generic pharmaceutical manufacturers have conspired to fix prices of generic digoxin, levothyroxine, ursodiol and baclofen. These cases are part of a larger group of more than 100 lawsuits generally alleging that over 30 generic pharmaceutical manufacturers and distributors conspired to fix prices for multiple different generic drugs in violation of the federal Sherman Act, various state antitrust laws, and various state consumer protection statutes. The United States also has been granted leave to intervene in the cases. On April 6, 2017, the Judicial Panel on Multidistrict Litigation (the “JPML”) ordered that all of the cases alleging price-fixing for generic drugs be consolidated for pretrial proceedings in the United States District Court for the Eastern District of Pennsylvania under the caption In re: Generic Pharmaceuticals Pricing Antitrust Litigation (the “MDL”). The various plaintiffs are grouped into three categories - Direct Purchaser Plaintiffs, End Payer Plaintiffs, and Indirect Reseller Purchasers - and filed Consolidated Amended Complaints (“CACs”) against the Company and the other defendants in August 2017. The CACs naming the Company as a defendant involve generic digoxin, levothyroxine, ursodiol and baclofen. Pursuant to a court-ordered schedule grouping the 18 different drug cases into three separate tranches, the Company and other generic pharmaceutical manufacturer defendants in October 2017 filed joint and individual motions to dismiss the CACs involving the six drugs in the first tranche, including digoxin. In October 2018, the Court (with one exception) denied defendants’ motions to dismiss plaintiffs’ Sherman Act claims with respect to the drugs in the first tranche. In March 2019, the Company and other defendants filed answers to the Sherman Act claims. In addition, in February 2019, the Court dismissed certain of the plaintiffs’ state law claims, but denied the remainder of defendants’ motions to dismiss and set a deadline of April 1, 2019 for certain plaintiffs to amend their existing complaints. Those plaintiffs amended their complaints, but further motions to dismiss the state-law claims remain pending. In addition to lawsuits brought by private plaintiffs, the Attorneys General of 49 states, the District of Columbia, Puerto Rico and various territories have filed their own lawsuits alleging overarching, industry-wide price-fixing conspiracies by the Company and various other generic pharmaceutical manufacturers. Those suits have been consolidated in the MDL. The first suit alleges that the Company was involved in price-fixing for one drug, doxycycline monohydrate. Defendants’ joint motion to dismiss the overarching conspiracy claims in that suit was denied in August 2019, but the Company’s individual motion to dismiss the overarching conspiracy claims as to it remains outstanding. The Attorneys General also filed a second overarching conspiracy complaint in May 2019 involving dozens of different drugs, including alleged price-fixing by the Company for baclofen and levothyroxine. In June 2020, the Attorneys General filed a third overarching conspiracy complaint involving scores of different drugs, including alleged price-fixing by the Company for acetazolamide. Following the lead of the state Attorneys General, the Direct Purchaser Plaintiffs, End Payer Plaintiffs and Indirect Reseller Plaintiffs filed their own complaints in June 2018 alleging an overarching conspiracy relating to 14 generic drugs in the End Payer complaint and 15 generic drugs in the Indirect Reseller complaint. Although the complaints allege an overarching conspiracy with respect to all of the drugs identified, the specific allegations related to drugs the Company manufactures involve acetazolamide and doxycycline monohydrate. The Company and the other defendants filed motions to dismiss the overarching conspiracy claims. In August 2019, the Court denied the defendants' joint motion to dismiss the overarching conspiracy claims, but has yet to decide an individual motion filed by the Company to dismiss the overarching conspiracy claims as to it. In addition, between December 2019 and February 2020, the End Payer Plaintiffs, Indirect Reseller Purchasers, and Direct Purchaser Plaintiffs filed separate complaints alleging overarching, industry-wide price-fixing conspiracies modeled on the second one filed by the state Attorneys General. The new complaint involve 135 new drugs in addition to those named in previous complaints. As to the Company, the new drugs involved are pilocarpine HCL, triamterence HCTZ capsules, amantadine HCL, and oxycodone HCL. None of the defendants, including the Company, has responded yet to these new complaints. Between January 2018 and June 2020, a number of opt-out parties have filed individual complaints or otherwise commenced actions against the Company and dozens of other companies alleging an overarching conspiracy and individual conspiracies to fix the prices and allocate markets on scores of different drug products, including digoxin, doxycycline, levothyroxine, ursodiol and baclofen. The opt-out parties include various retailers, insurers and county governments, which have filed federal suits in Pennsylvania, New York, California, and Texas. All of those complaints have been added to the MDL but none of the defendants, including the Company, has responded to any of the complaints. Other groups of insurers have commenced actions in Pennsylvania state court against the Company and other drug companies by filing writs of summons, which are not complaints but can serve to toll the running of statutes of limitations. Those state-court cases have not been added to the MDL, although the parties have agreed to stay those cases pending further developments in the MDL. In June 2020, the Company and a number of other generic pharmaceutical manufacturers were named as defendants in a Statement of Claim, along with a number of other generic pharmaceutical manufacturers, in a proposed class proceeding in federal court in Toronto, Ontario, Canada. The case alleges a violation of Canada’s Competition Act. The allegations are similar to those in the MDL alleging an overarching, industry-wide conspiracy to allocate markets and fix the price of generic drugs. That alleged conspiracy reached Canada because these same manufacturers also allegedly sell the majority of generic drugs in Canada. The Statement of Claim alleges that the conspiracy extends to the entire generic pharmaceutical market. The specific drugs identified with respect to the Company are: acetazolamide, baclofen, digoxin, doxycycline monohydrate, levothyroxine, and ursodiol. The Company has not yet responded to the Statement of Claim. On July 13, 2020, the court overseeing the MDL selected as “bellwether” cases the second overarching conspiracy case filed by the state Attorneys General in May 2019 as well as individual-conspiracy cases filed by the Direct Purchaser Plaintiffs, End Payer Plaintiffs, and Indirect Reseller Purchasers involving the drugs clobetasol, clomipramine and pravastatin. The Company is a defendant only in the overarching conspiracy case. To date, none of the “bellwether” cases have been scheduled for trial. The Company believes that it acted in compliance with all applicable laws and regulations. Accordingly, the Company disputes the allegations set forth in these class actions and plans to vigorously defend itself from these claims. Shareholder Litigation In November 2016, a putative class action lawsuit was filed against the Company and two of its former officers in the federal district court for the Eastern District of Pennsylvania, alleging that the Company and two of its former officers damaged the purported class by making false and misleading statements regarding the Company’s drug pricing methodologies and internal controls. In December 2017, counsel for the putative class filed a second amended complaint. The Company filed a motion to dismiss the second amended complaint in February 2018. In July 2018, the court granted the Company’s motion to dismiss the second amended complaint . In September 2018, counsel for the putative class filed a third amended complaint. The Company filed a motion to dismiss the third amended complaint in November 2018. In May 2019, the court denied the Company’s motion to dismiss the third amended complaint. In July 2019, the Company filed an answer to the third amended complaint. On October 1, 2020, the plaintiff filed a motion for class certification. The Company believes it acted in compliance with all applicable laws and plans to vigorously defend itself from these claims. The Company cannot reasonably predict the outcome of the suit at this time. In May 2019, a shareholder derivative lawsuit was filed against certain of the Company’s current and former officers and certain of the current and former members of the Company’s Board of Directors in the federal court for the District of Delaware. The Company was also named as a nominal defendant in the suit. The suit alleges that the defendants breached their fiduciary duties as directors and/or officers of the Company, that certain of the defendants caused the Company to issue false and misleading proxy statements in violation of Section 14(a) of the Securities Exchange Act of 1934, that the defendants were unjustly enriched at the expense of the Company, and that the defendants wasted corporate assets belonging to the Company. On December 4, 2019 the court entered a stipulation consolidating the suit with a separate shareholder derivative suit filed in July 2019, as described below. On December 6, 2019, the Company filed a motion to dismiss the consolidated cases. On January 14, 2020, the parties reached an agreement in principle to resolve the consolidated cases, subject to the execution of a mutually acceptable settlement document and Court approval. In July 2019, a shareholder derivative lawsuit was filed against certain of the Company’s current and former officers and directors in the federal court for the Eastern District of Pennsylvania. The Company was also named as a nominal defendant in the suit. The suit alleges that the defendants breached their fiduciary duties as directors and/or officers of the Company and that certain of the defendants caused the Company to violate Sections 10(b), 14(a), and 29(b) of the Securities Exchange Act of 1934. In October 2019, this suit was transferred to the federal court for the District of Delaware and is pending before the same judge presiding over the shareholder derivative suit that was filed in May 2019. On December 4, 2019, the Court entered a stipulation consolidating the suit with a separate shareholder derivative suit filed in May 2019, as described above. On December 6, 2019, the Company filed a motion to dismiss the consolidated cases. On January 14, 2020, the parties reached an agreement in principle to resolve the consolidated cases, subject to the execution of a mutually agreeable settlement document and Court approval. The settlement of the two consolidated cases, which was preliminarily approved by the Court on August 7, 2020, requires the Company to implement certain new corporate policies and pay the plaintiffs’ counsel in the consolidated cases, collectively, the sum of $600,000 in exchange for a release of all liability with respect to both of the consolidated cases. A Settlement Hearing was held on October 7, 2020. At the settlement hearing, the Magistrate Judge issued an oral Ruling and Recommendation approving the Settlement and denying the objecting parties’ motion to intervene. The time period to object to the Ruling and Recommendation has expired. In September 2019, a shareholder derivative lawsuit was filed against certain of the Company’s current and former officers, directors, and employees in the federal court for the District of Delaware. The Company was also named as a nominal defendant in the suit. The suit alleges that the defendants breached their fiduciary duties as directors and/or officers of the Company, alleges waste of corporate assets and gross mismanagement, and alleges that certain of the defendants caused the Company to violate Section 14(a) of the Securities and Exchange Act of 1934. On November 22, 2019, the Company filed a motion to dismiss the complaint. On January 16, 2020, the Court entered the parties’ stipulation to stay the case pending the resolution of the defendants’ motion to dismiss the two earlier filed consolidated shareholder derivative cases referenced above. On February 18, 2020, the Court entered the parties’ stipulation to withdraw the Company’s motion to dismiss without prejudice to the Company’s ability to refile a renewed motion to dismiss after the stay is lifted. On March 11, 2020, following notice that Plaintiffs no longer consented to the stay, the Court lifted the stay. On April 6, 2020, certain of the defendants, including the Company, filed a renewed motion to dismiss or, in the alternative, to stay the account. On April 29, 2020, the Court entered the parties’ stipulation to stay the action, pending a decision from the Court regarding the settlement in the consolidated derivative actions discussed above. In light of the Final Order and Judgment entered in the two earlier filed consolidated shareholder derivative cases referenced above, the parties filed a stipulation and proposed order dismissing this Action, with prejudice. On October 29, 2020, the District Court Judge entered an Order approving the parties’ Stipulation of Dismissal, with prejudice. The Company considers this matter closed. In February 2020, a shareholder derivative lawsuit was filed against certain of the Company’s current and former officers, directors and employees in the Court of Chancery of the State of Delaware. The Company was also named as a nominal defendant in the suit. The suit alleges that the defendants breached their fiduciary duties as directors and/or officers of the Company, and were unjustly enriched. On March 16, 2020, the Company filed a motion to dismiss the complaint, and a motion to stay the proceedings. On March 27, 2020, the Company filed its opening brief in support of its motion to stay the proceedings. On April 6, 2020, the parties entered into a stipulation and proposed order to stay the action. The Court granted the stipulation and proposed order that same day. In light of the Final Order and Judgment entered in the two earlier filed consolidated shareholder derivative cases referenced above, the parties agreed to dismiss this action, with prejudice. The Stipulation of Dismissal has been filed and is awaiting the approval of the Court. Genus Life Sciences In December 2018, Genus Lifesciences, Inc. (“Genus”) sued the Company, Cody Labs, and others in California federal court, alleging violations of the Lanham Act, Sherman Act, and California false advertising law. Genus received FDA approval for a cocaine hydrochloride product in December 2018, and its claims are premised in part on allegations that the Company falsely advertises its unapproved cocaine hydrochloride solution product. The Company denies that it is falsely advertising its cocaine hydrochloride solution product and continues to market its unapproved product relying on the Guidance for FDA Staff and Industry, Marketed Unapproved Drugs — Compliance Policy Guide, pending approval of its Section 505(b)(2) application. In January 2019, the Company filed a motion to dismiss the complaint. On May 3, 2019, the Court issued a written decision granting in part and denying in part the motion to dismiss. On June 6, 2019, Genus filed an Amended Complaint. On June 27, 2019, the Company filed a motion to dismiss the amended complaint. By Order dated September 3, 2019, the Court granted in part and denied in part the Company's motion to dismiss. On November 20, 2019, Genus filed a second amended complaint. On December 17, 2019, the Company filed an answer to the second amended complaint. The Company believes it acted in compliance with all applicable laws and regulations and plans to vigorously defend itself from these claims. Discovery is ongoing and the Company cannot reasonably predict the outcome of this suit at this time. Sandoz, Inc. On July 20, 2020, Sandoz, Inc. (“Sandoz”) filed a complaint in federal court in Philadelphia, alleging claims for tortious interference with contract, unfair competition and conversion of confidential information, arising out of Cediprof, Inc.’s (“Cediprof”) termination of Sandoz’s contract to distribute levothyroxine tablets in the United States and certain territories. Along with the complaint, Sandoz filed a motion for a temporary restraining order and preliminary injunction, seeking to enjoin the Company from commencing the distribution of levothyroxine tablets on August 3, 2020. On the same day, Sandoz filed a separate complaint and application for a temporary restraining order and preliminary injunction against Cediprof in federal court in New York, seeking to prevent Cediprof from selling its levothyroxine tablets in the United States and certain of its territories to anyone other than Sandoz. On July 27, 2020, the New York court held a hearing and denied Sandoz’s application for a temporary restraining order, ruling Sandoz had failed to establish irreparable harm. On July 28, 2020, the Philadelphia court held a hearing and denied Sandoz’s application for a temporary restraining order, ruling that Sandoz had failed to establish irreparable harm and failed to establish that it is likely to succeed on the merits of its claim against Lannett. On October 5, 2020, the Company filed a motion to dismiss the complaint. The Company denies that it tortiously interfered with Sandoz’s contract or that it converted any of Sandoz’s alleged confidential information. Discovery is ongoing and the Company cannot reasonably predict the outcome of this suit at this time. Other Litigation Matters The Company is also subject to various legal proceedings arising out of the normal course of its business including, but not limited to, product liability, intellectual property, patent infringement claims and antitrust matters. It is not possible to predict the outcome of these various proceedings. An adverse determination in any of these proceedings or in any of the proceedings described above in the future could have a significant impact on the financial position, results of operations and cash flows of the Company.

Commitments

Commitments	3 Months Ended
Commitments	Sep. 30, 2020
Commitments
Commitments	Note 12. Commitments Leases The Company’s adoption of ASU No. 2016-02 resulted in an increase in the Company’s assets and liabilities of $7.9 million at July 1, 2019 . In the first quarter of Fiscal 2020, the Company recorded a ROU lease asset totaling $1.2 million related to an existing lease at Cody Labs upon adoption of ASU No. 2016-02. The Company subsequently recorded a full impairment of the asset as a result of the decision to cease operations at Cody Labs. At September 30, 2020 and June 30, 2020, the Company has a ROU lease asset of $9.1 million and $9.3 million, respectively, and a ROU liability of $11.6 million and $10.9 million, respectively. The current balance of the ROU liability at September 30, 2020 and June 30, 2020 was $2.0 million and $1.1 million, respectively. Components of lease cost are as follows: Three Months Ended Three Months Ended (In thousands) September 30, 2020 September 30, 2019 Operating lease cost $ 402 $ 481 Variable lease cost 39 28 Short-term lease cost (a) 118 156 Total $ 559 $ 665 (a) Not recorded on the Consolidated Balance Sheet. Supplemental cash flow information and non-cash activity related to our operating leases are as follows: Three Months Ended Three Months Ended (In thousands) September 30, 2020 September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 303 $ 481 Non-cash activity: ROU assets obtained in exchange for new operating lease liabilities $ — $ — Weighted-average remaining lease term and discount rate for our operating leases are as follows: Three Months Ended Three Months Ended September 30, 2020 September 30, 2019 Weighted-average remaining lease term 8 years 9 years Weighted-average discount rate 7.98 % 7.50 % Maturities of lease liabilities by fiscal year for our operating leases are as follows: (In thousands) Amounts Due 2021 $ 1,498 2022 2,125 2023 2,144 2024 2,164 2025 2,183 Thereafter 5,749 Total lease payments 15,863 Less: Imputed interest 4,299 Present value of lease liabilities $ 11,564 Other Commitments During Fiscal 2017, the Company signed an agreement with a company operating in the pharmaceutical business, under which the Company agreed to provide up to $15.0 million in revolving loans, which expires in seven years and bears interest at 2.0%, for the purpose of expansion and other business needs. In Fiscal 2019, the Company sold 50% of the outstanding loan to a third party for $5.6 million, in addition to assigning 50% of all rights, title and interest in the loan and loan documents. As of September 30, 2020, million was outstanding under the revolving loan and is included in other assets. Based on the guidance set forth in ASC 810-10 Consolidation, the Company has concluded that it has a variable interest in the entity. However, the Company is not the primary beneficiary to the entity and as such, is not required to consolidate the entity’s results of operations. In Fiscal 2020, the Company executed a License and Collaboration Agreement with North South Brother Pharmacy Investment Co., Ltd. and HEC Group PTY, Ltd. (collectively, “HEC”) to develop an insulin glargine product that would be biosimilar to Lantus Solostar. Under the terms of the deal, among other things, the Company shall fund up to the initial 50 /50 any development costs in excess thereof. Lannett shall receive an exclusive license to distribute and market the product in the United States upon FDA approval under the 50 60 . To date, the COVID-19 pandemic has not had a material impact on the development of the insulin glargine product. The longer that countries around the world remain on lockdown, the more likely it becomes that the timing of the product development and approval will be delayed.

Accumulated Other Comprehensive

Accumulated Other Comprehensive Loss	3 Months Ended
Accumulated Other Comprehensive Loss	Sep. 30, 2020
Accumulated Other Comprehensive Loss.
Accumulated Other Comprehensive Loss	Note 13. Accumulated Other Comprehensive Loss The Company’s Accumulated Other Comprehensive Loss was comprised of the following components as of September 30, 2020 and 2019: September 30, (In thousands) 2020 2019 Foreign Currency Translation Beginning Balance $ (627) $ (615) Net income (loss) on foreign currency translation (net of tax of $0 and $0) 79 (46) Other comprehensive income (loss), net of tax 79 (46) Total Accumulated Other Comprehensive Loss $ (548) $ (661)

Loss Per Common Share

Loss Per Common Share	3 Months Ended
Loss Per Common Share	Sep. 30, 2020
Loss Per Common Share
Loss Per Common Share	Note 14. Loss Per Common Share A reconciliation of the Company’s basic and diluted loss per common share was as follows: Three Months Ended September 30, (In thousands, except share and per share data) 2020 2019 Numerator: Net loss $ (6,499) $ (12,157) Interest expense applicable to the Notes, net of tax — — Amortization of debt issuance costs applicable to the Notes, net of tax — — Adjusted “if-converted” net loss $ (6,499) $ (12,157) Denominator: Basic weighted average common shares outstanding 39,070,982 38,309,267 Effect of potentially dilutive options and restricted stock awards — — Effect of conversion of the Notes — — Diluted weighted average common shares outstanding 39,070,982 38,309,267 Loss per common share: Basic $ (0.17) $ (0.32) Diluted $ (0.17) $ (0.32) The number of anti-dilutive shares that have been excluded in the computation of diluted loss and earnings per share for the three months ended September 30, 2020 and 2019 were 8.2 million and 2.9 million, respectively. The effect of potentially dilutive shares was excluded from the calculation of diluted loss per share in the three months ended September 30, 2020 and 2019 because the effect of including such securities would be anti-dilutive.

Share-based Compensation

Share-based Compensation	3 Months Ended
Share-based Compensation	Sep. 30, 2020
Share-based Compensation
Share-based Compensation	Note 15. Share-based Compensation At September 30, 2020, the Company had two share-based employee compensation plans (the 2011 Long-Term Incentive Plan “LTIP” and the 2014 “LTIP”). Together these plans authorized an aggregate total of 6.5 million shares to be issued. As of September 30, 2020, the plans have a total of 45 thousand shares available for future issuances. Historically, the Company has issued share-based compensation awards with a vesting period ranging up to 3 years and a maximum contractual term of 10 years . The Company issues new shares of stock when stock options are exercised. As of September 30, 2020, there was $14.7 million of total unrecognized compensation cost related to non-vested share-based compensation awards. That cost is expected to be recognized over a weighted average period of 2.5 years. Stock Options The Company measures share-based compensation cost for options using the Black-Scholes option pricing model. The following table presents the weighted average assumptions used to estimate fair values of the stock options granted, the estimated annual forfeiture rates used to recognize the associated compensation expense and the weighted average fair value of the options granted during the three months ended September 30, 2020 and 2019: September 30, 2020 September 30, 2019 Risk-free interest rate 0.2 % 1.9 % Expected volatility 82.5 % 73.7 % Expected dividend yield — % — % Forfeiture rate — % — % Expected term 5.0 years 5.1 years Weighted average fair value $ 3.86 $ 4.04 Expected volatility is based on the historical volatility of the price of our common shares during the historical period equal to the expected term of the option. The Company uses historical information to estimate the expected term, which represents the period of time that options granted are expected to be outstanding. The risk-free rate for the period equal to the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The forfeiture rate assumption is the estimated annual rate at which unvested awards are expected to be forfeited during the vesting period. This assumption is based on our actual forfeiture rate on historical awards. Periodically, management will assess whether it is necessary to adjust the estimated rate to reflect changes in actual forfeitures or changes in expectations. Additionally, the expected dividend yield is equal to zero, as the Company has not historically issued and has no immediate plans to issue a dividend. A stock option summary as of September 30, 2020 and changes during the three months then ended, is presented below: Weighted Weighted- Average Average Aggregate Remaining Exercise Intrinsic Contractual (In thousands, except for weighted average price and life data) Awards Price Value Life (yrs.) Outstanding at June 30, 2020 991 $ 12.11 $ 678 5.6 Granted 309 $ 5.95 Exercised (32) $ 4.16 $ 48 Forfeited, expired or repurchased (187) $ 16.56 Outstanding at September 30, 2020 1,081 $ 9.81 $ 186 7.8 Vested and expected to vest at September 30, 2020 408 $ 14.92 $ 136 5.3 Exercisable at September 30, 2020 1,079 $ 9.81 $ 186 7.8 Restricted Stock The Company measures restricted stock compensation costs based on the stock price at the grant date less an estimate for expected forfeitures. The annual forfeiture rate used to calculate compensation expense was 6.5% for the three months ended September 30, 2020 and 2019. A summary of restricted stock awards as of September 30, 2020 and changes during the three months then ended, is presented below: Weighted Average Grant - Aggregate (In thousands, except for weighted average price data) Awards date Fair Value Intrinsic Value Non-vested at June 30, 2020 1,344 $ 8.70 Granted 870 5.72 Vested (664) 8.75 $ 3,798 Forfeited (66) 9.32 Non-vested at September 30, 2020 1,484 $ 6.90 Performance-Based Shares In September 2017, the Company began granting performance-based awards to certain key executives. The stock-settled awards will cliff vest based on relative Total Shareholder Return (“TSR”) over a three-year period. The Company measures share-based compensation cost for TSR awards using a Monte-Carlo simulation model. A summary of performance-based share awards as of September 30, 2020 and changes during the current fiscal year, is presented below: Weighted Average Grant - (In thousands, except for weighted average price and life data) Awards date Fair Value Non-vested at June 30, 2020 204 $ 12.99 Granted 339 $ 9.22 Performance adjustment (1) (12) $ 25.58 Non-vested at September 30, 2020 531 $ 10.29 (1) Represents the adjustment based on the performance of the September 2017 awards, which was below the Threshold goal level at the end of the three-year performance period Employee Stock Purchase Plan In February 2003, the Company’s stockholders approved an Employee Stock Purchase Plan (“ESPP”). Employees eligible to participate in the ESPP may purchase shares of the Company’s stock at 85 % of the lower of the fair market value of the common stock on the first day of the calendar quarter, or the last day of the calendar quarter. Under the ESPP, employees can authorize the Company to withhold up to 10 % of their compensation during any quarterly offering period, subject to certain limitations. The ESPP was implemented on April 1, 2003 and is qualified under Section 423 of the Internal Revenue Code. The Board of Directors authorized an aggregate total of 1.1 million shares of the Company’s common stock for issuance under the ESPP. During the three months ended September 30, 2020 and 2019, 29 thousand shares were issued under the ESPP. As of September 30, 2020, 939 thousand total cumulative shares have been issued under the ESPP. The following table presents the allocation of share-based compensation costs recognized in the Consolidated Statements of Operations by financial statement line item: Three Months Ended September 30, (In thousands) 2020 2019 Selling, general and administrative expenses $ 2,714 $ 3,635 Research and development expenses 155 224 Cost of sales 473 600 Total $ 3,342 $ 4,459 Tax benefit at statutory rate $ 752 $ 1,003

Employee Benefit Plan

Employee Benefit Plan	3 Months Ended
Employee Benefit Plan	Sep. 30, 2020
Employee Benefit Plan
Employee Benefit Plan	Note 16. Employee Benefit Plan The Company has a 401k defined contribution plan (the “Plan”) covering substantially all employees. Pursuant to the Plan provisions, the Company is required to make matching contributions equal to 50% of each employee’s contribution, not to exceed 4 % of the employee’s compensation for the Plan year. Contributions to the Plan during each of the three months ended September 30, 2020 and 2019 were $0.5 million and $0.6 million, respectively. In Fiscal 2020, the Company implemented a non-qualified deferred compensation plan for certain senior-level management and executives. The non-qualified deferred compensation plan allows certain eligible employees to defer additional pre-tax earnings for retirement, beyond the IRS limits in place under the Plan. Contributions to the non-qualified deferred compensation plan during the three months ended September 30, 2020 were not material.

Income Taxes

Income Taxes	3 Months Ended
Income Taxes	Sep. 30, 2020
Income Taxes
Income Taxes	Note 17. Income Taxes The Company uses the liability method to account for income taxes. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities as measured by the enacted tax rates which are expected to be in effect when these differences reverse. Deferred tax expense (benefit) is the result of changes in deferred tax assets and liabilities. The federal, state and local income tax benefit for the three months ended September 30, 2020 was $8.0 million compared to an income tax expense of $1.8 million for the three months ended September 30, 2019. The effective tax rates for the three months ended September 30, 2020 and 2019 were The Company may recognize the tax benefit from an uncertain tax position claimed on a tax return only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. As of September 30, 2020 and June 30, 2020, the Company has total unrecognized tax benefits of $4.8 million and $4.6 million, respectively, of which $4.7 million and $4.5 million would impact the Company’s effective tax rate for each period, if recognized. As a result of the positions taken during the period, the Company has not recorded any material interest and penalties for the period ended September 30, 2020 in the statement of operations and cumulative interest and penalties have been recorded either in the Company’s statement of financial position as of September 30, 2020 and June 30, 2020. The Company will recognize interest accrued on unrecognized tax benefits in interest expense and any related penalties in operating expenses. The Company files income tax returns in the United States federal jurisdiction and various states. The Company’s federal tax returns for Fiscal Year 2014 and prior generally are no longer subject to review as such years generally are closed. The Company’s Fiscal Year 2015 through 2017 federal returns are currently under examination by the Internal Revenue Service (“IRS”). In October 2018, the Company was notified that the Commonwealth of Pennsylvania will conduct a routine field audit of the Company’s Fiscal 2016 and Fiscal 2017 corporate tax returns. In December 2019, the Company was notified that the Florida Department of Revenue will conduct a routine field audit of the Company’s Fiscal 2016, 2017 and 2018 corporate tax returns. The Company has received preliminary assessments from the IRS and the Florida Department of Revenue, which are not considered material to Company’s Consolidated Statements of Operations; however, we cannot reasonably predict the final outcome of the examinations at this time.

Related Party Transactions

Related Party Transactions	3 Months Ended
Related Party Transactions	Sep. 30, 2020
Related Party Transactions
Related Party Transactions	Note 18. Related Party Transactions The Company had sales of $0.7 million during each of the three months ended September 30, 2020 and 2019, to a generic distributor, Auburn Pharmaceutical Company (“Auburn”), which is a member of the Premier Buying Group. Jeffrey Farber, a current board member, is the owner of Auburn. Accounts receivable includes amounts due from Auburn of $0.7 million at September 30, 2020 and June 30, 2020.

Assets Held for Sale

Assets Held for Sale	3 Months Ended
Assets Held for Sale	Sep. 30, 2020
Assets Held for Sale
Assets held for Sale	Note 19. Assets Held for Sale In the first quarter of Fiscal 2019, the Company approved a plan to sell the Cody API business, which includes the manufacturing and distribution of active pharmaceutical ingredients for use in finished goods production. The Company was unable to sell the Cody API business as an ongoing operation and sold the equipment utilized by the Cody API business during Fiscal 2020. The Company ceased operations at Cody Labs, leased a portion of the real estate to a third party and intends to sell the remaining real estate. As of September 30, 2020, the remaining real estate associated with the Cody API business, totaling $2.7 million, was recorded in the assets held for sale caption in the Consolidated Balance Sheet. The following table summarizes the financial results of the Cody API business for the three months ended September 30, 2020 and 2019: Three Months Ended September 30, (In thousands) 2020 2019 Net sales $ — $ 1,067 Pretax loss attributable to Cody API business (502) (4,417) The pretax loss attributable to the Cody API business during the three months ended September 30, 2019 includes a full impairment of a $1.2 million ROU lease asset that was recorded upon adoption of ASU No. 2016-02 on July 1, 2019.

Subsequent Events

Subsequent Events	3 Months Ended
Subsequent Events	Sep. 30, 2020
Subsequent Events
Subsequent Events	Note 20. Subsequent Event On October 29, 2020, the Company entered into an agreement for the sale of real estate associated with the Cody API business. The total consideration the Company will receive in connection with the sale is $3.8 million before fees and selling costs. The carrying value of the real estate was included within the Assets Held for Sale line of the Consolidated Balance Sheet as of September 30, 2020.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	3 Months Ended
Summary of Significant Accounting Policies (Policies)	Sep. 30, 2020
Summary of Significant Accounting Policies
Basis of Presentation	Basis of Presentation The Consolidated Financial Statements have been prepared in conformity with U.S. GAAP.
Principles of consolidation	Principles of consolidation The Consolidated Financial Statements include the accounts of Lannett Company, Inc. and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated.
Use of estimates	Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions are required in the determination of revenue recognition and sales deductions for estimated chargebacks, rebates, returns and other adjustments including a provision for the Company’s liability under the Medicare Part D program. Additionally, significant estimates and assumptions are required when determining the value of inventories and long-lived assets, including intangible assets, income taxes, contingencies and share-based compensation. Because of the inherent subjectivity and complexity involved in these estimates and assumptions, actual results could differ from those estimates.
Foreign currency translation	Foreign currency translation The Consolidated Financial Statements are presented in U.S. dollars, the reporting currency of the Company. The financial statements of the Company’s foreign subsidiary are maintained in local currency and translated into U.S. dollars at the end of each reporting period. Assets and liabilities are translated at period-end exchange rates, while revenues and expenses are translated at average exchange rates during the period. The adjustments resulting from the use of differing exchange rates are recorded as part of stockholders’ equity in accumulated other comprehensive income (loss). Gains and losses resulting from transactions denominated in foreign currencies are recognized in the Consolidated Statements of Operations under other income (loss). Amounts recorded due to foreign currency fluctuations are immaterial to the Consolidated Financial Statements.
Cash and cash equivalents	Cash and cash equivalents The Company considers all highly liquid investments with original maturities less than or equal to three months at the date of purchase to be cash and cash equivalents. Cash and cash equivalents are stated at cost, which approximates fair value, and consist of bank deposits and money market funds. The Company maintains its cash deposits and cash equivalents at well-known, stable financial institutions. Such amounts frequently exceed insured limits.
Allowance for doubtful accounts	Allowance for doubtful accounts On July 1, 2020, the Company adopted guidance issued by the FASB in ASU 2016-13, Measurement of Credit Losses on Financial Instruments , which requires the Company to recognize an allowance that reflects a current estimate of credit losses expected to be incurred over the life of the financial asset, including trade receivables. The adoption of ASU 2016-13 did not have a material impact on the Company’s Consolidated Financial Statements for the three months ended September 30, 2020. The Company continuously monitors collections and payments from its customers and maintains a provision for estimated credit losses. The Company determines its allowance for doubtful accounts by considering a number of factors, including the length of time balances are past due, the Company’s previous loss history, the customer’s current ability to pay its obligations to the Company and the expected condition of the general economy and the industry as a whole. The Company writes off accounts receivable when they are determined to be uncollectible.
Inventories	Inventories Inventories are stated at the lower of cost or net realizable value by the first-in, first-out method. Inventories are regularly reviewed and write-downs for excess and obsolete inventory are recorded based primarily on current inventory levels, expiration date and estimated sales forecasts.
Property, Plant and Equipment	Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation is computed on a straight-line basis over the assets’ estimated useful lives. Repairs and maintenance costs that do not extend the useful life of the asset are expensed as incurred.
Intangible Assets	Intangible Assets Definite-lived intangible assets are stated at cost less accumulated amortization. Amortization of definite-lived intangible assets is computed on a straight-line basis over the assets’ estimated useful lives which commences upon shipment of the product, generally for periods ranging from 5 to 15 years . The Company continually evaluates the reasonableness of the useful lives of these assets. Indefinite-lived intangible assets are not amortized, but instead are tested at least annually for impairment. Costs to renew or extend the term of a recognized intangible asset are expensed as incurred.
Valuation of Long-Lived Assets, including Intangible Assets	Valuation of Long-Lived Assets, including Intangible Assets The Company’s long-lived assets primarily consist of property, plant and equipment and definite and indefinite-lived intangible assets. Property, plant and equipment and definite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances (“triggering events”) indicate that the carrying amount of the asset may not be recoverable. If a triggering event is determined to have occurred, the asset’s carrying value is compared to the future undiscounted cash flows expected to be generated by the asset. If the carrying value exceeds the undiscounted cash flows of the asset, then impairment exists. Indefinite-lived intangible assets are tested for impairment at least annually during the fourth quarter of each fiscal year or more frequently if events or triggering events indicate that the asset might be impaired. An impairment loss is measured as the excess of the asset’s carrying value over its fair value, which in most cases is calculated using a discounted cash flow model. Discounted cash flow models are highly reliant on various assumptions which are considered Level 3 inputs, including estimates of future cash flows (including long-term growth rates), discount rates and the probability of achieving the estimated cash flows.
In-Process Research and Development	In-Process Research and Development Amounts allocated to in-process research and development in connection with a business combination are recorded at fair value and are considered indefinite-lived intangible assets subject to impairment testing in accordance with the Company’s impairment testing policy for indefinite-lived intangible assets. As products in development are approved for sale, amounts will be allocated to product rights and will be amortized over their estimated useful lives. Definite-lived intangible assets are amortized over the expected lives of the related assets. The judgments made in determining the estimated fair value of in-process research and development, as well as asset lives, can materially impact our results of operations. The Company’s fair value assessments are highly reliant on various assumptions which are considered Level 3 inputs, including estimates of future cash flows (including long-term growth rates), discount rates and the probability of achieving the estimated cash flows.
Segment Information	Segment Information The Company operates in one reportable segment, generic pharmaceuticals. As such, the Company aggregates its financial information for all products. The table below identifies the Company’s net sales by medical indication for the three months ended September 30, 2020 and 2019. Three Months Ended (In thousands) September 30, Medical Indication 2020 2019 Analgesic $ 3,120 $ 1,884 Anti-Psychosis 13,028 28,034 Cardiovascular 19,714 21,606 Central Nervous System 22,525 19,257 Endocrinology 3,233 — Gastrointestinal 17,100 16,962 Infectious Disease 21,932 11,895 Migraine 9,690 9,143 Respiratory/Allergy/Cough/Cold 1,426 2,707 Urinary 1,458 435 Other 7,634 9,861 Contract manufacturing revenue 5,619 5,558 Total net sales $ 126,479 $ 127,342
Customer, Supplier and Product Concentration	Customer, Supplier and Product Concentration The following table presents the percentage of total net sales, for the three months ended September 30, 2020 and 2019, for certain of the Company’s products, defined as products containing the same active ingredient or combination of ingredients, which accounted for at least 10% of net sales in any of those periods: Three Months Ended September 30, 2020 2019 Product 1 15 % 7 % Product 2 9 % 20 % The following table presents the percentage of total net sales, for the three months ended September 30, 2020 and 2019, for certain of the Company’s customers which accounted for at least 10% of net sales in any of those periods: Three Months Ended September 30, 2020 2019 Customer A 26 % 25 % Customer B 22 % 27 % Customer C 10 % 13 %
Revenue Recognition	Revenue Recognition The Company complies with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers Revenue Recognition . Under ASC 606, the Company recognizes revenue when (or as) we satisfy our performance obligations by transferring a promised good or service to a customer at an amount that reflects the consideration the Company is expected to be entitled. Our revenue consists almost entirely of sales of our pharmaceutical products to customers, whereby we ship product to a customer pursuant to a purchase order. Revenue contracts such as these do not generally give rise to contract assets or contract liabilities because: (i) the underlying contracts generally have only a single performance obligation and (ii) we do not generally receive consideration until the performance obligation is fully satisfied. The revenue standard impacts the timing of the Company’s revenue recognition by requiring recognition of certain contract manufacturing arrangements to change from “upon shipment or delivery” to “over time”. However, the recognition of these arrangements over time does not currently have a material impact on the Company’s consolidated results of operations or financial position. When revenue is recognized, a simultaneous adjustment to gross sales is made for estimated chargebacks, rebates, returns, promotional adjustments and other potential adjustments. These provisions are primarily estimated based on historical experience, future expectations, contractual arrangements with wholesalers and indirect customers and other factors known to management at the time of accrual. Accruals for provisions are presented in the Consolidated Financial Statements as a reduction to gross sales with the corresponding reserve presented as a reduction of accounts receivable or included as rebates payable, depending on the nature of the reserve. Provisions for chargebacks, rebates, returns and other adjustments require varying degrees of subjectivity. While rebates generally are based on contractual terms and require minimal estimation, chargebacks and returns require management to make more subjective assumptions. Each major category is discussed in detail below: Chargebacks The provision for chargebacks is the most significant and complex estimate used in the recognition of revenue. The Company sells its products directly to wholesale distributors, generic distributors, retail pharmacy chains and mail-order pharmacies. The Company also sells its products indirectly to independent pharmacies, managed care organizations, hospitals, nursing homes and group purchasing organizations, collectively referred to as “indirect customers.” The Company enters into agreements with its indirect customers to establish pricing for certain products. The indirect customers then independently select a wholesaler from which to purchase the products. If the price paid by the indirect customers is lower than the price paid by the wholesaler, the Company will provide a credit, called a chargeback, to the wholesaler for the difference between the contractual price with the indirect customers and the wholesaler purchase price. The provision for chargebacks is based on expected sell-through levels by the Company’s wholesale customers to the indirect customers and estimated wholesaler inventory levels. As sales to the large wholesale customers, such as Cardinal Health, AmerisourceBergen and McKesson increase (decrease), the reserve for chargebacks will also generally increase (decrease). However, the size of the increase (decrease) depends on product mix and the amount of sales made to indirect customers with which the Company has specific chargeback agreements. The Company continually monitors the reserve for chargebacks and makes adjustments when management believes that expected chargebacks may differ from the actual chargeback reserve. Rebates Rebates are offered to the Company’s key chain drug store, distributor and wholesaler customers to promote customer loyalty and increase product sales. These rebate programs provide customers with credits upon attainment of pre-established volumes or attainment of net sales milestones for a specified period. Other promotional programs are incentive programs offered to the customers. Additionally, as a result of the Patient Protection and Affordable Care Act (“PPACA”) enacted in the U.S. in March 2010, the Company participates in a cost-sharing program for certain Medicare Part D beneficiaries designed primarily for the sale of brand drugs and certain generic drugs if their Food and Drug Administration (“FDA”) approval was granted under a New Drug Application (“NDA”) or 505(b) NDA versus an Abbreviated New Drug application ("ANDA’). Drugs purchased within the Medicare Part D coverage gap (commonly referred to as the “donut hole”) result in additional rebates. The Company estimates the reserve for rebates and other promotional credit programs based on the specific terms in each agreement when revenue is recognized. The reserve for rebates increases (decreases) as sales to certain wholesale and retail customers increase (decrease). However, since these rebate programs are not identical for all customers, the size of the reserve will depend on the mix of sales to customers that are eligible to receive rebates. Returns Consistent with industry practice, the Company has a product returns policy that allows customers to return product within a specified time period prior to and subsequent to the product’s expiration date in exchange for a credit to be applied to future purchases. The Company’s policy requires that the customer obtain pre-approval from the Company for any qualifying return. The Company estimates its provision for returns based on historical experience, changes to business practices, credit terms and any extenuating circumstances known to management. While historical experience has allowed for reasonable estimations in the past, future returns may or may not follow historical trends. The Company continually monitors the reserve for returns and makes adjustments when management believes that actual product returns may differ from the established reserve. Generally, the reserve for returns increases as net sales increase. Other Adjustments Other adjustments consist primarily of “price adjustments”, also known as “shelf-stock adjustments” and “price protections,” which are both credits issued to reflect increases or decreases in the invoice or contract prices of the Company’s products. In the case of a price decrease, a credit is given for product remaining in customer’s inventories at the time of the price reduction. Contractual price protection results in a similar credit when the invoice or contract prices of the Company’s products increase, effectively allowing customers to purchase products at previous prices for a specified period of time. Amounts recorded for estimated shelf-stock adjustments and price protections are based upon specified terms with direct customers, estimated changes in market prices and estimates of inventory held by customers. The Company regularly monitors these and other factors and evaluates the reserve as additional information becomes available. Other adjustments also include prompt payment discounts and “failure-to-supply” adjustments. If the Company is unable to fulfill certain customer orders, the customer can purchase products from our competitors at their prices and charge the Company for any difference in our contractually agreed upon prices.
Leases	Leases On July 1, 2019, the Company adopted ASC Topic 842, Leases Leases . Under ASC 842, when the Company enters into a new arrangement, it must determine, at the inception date, whether the arrangement is or contains a lease. This determination generally depends on whether the arrangement conveys to the Company the right to control the use of an explicitly or implicitly identified asset for a period of time in exchange for consideration. Control of an underlying asset is conveyed to the Company if the Company obtains the rights to direct the use of and to obtain substantially all of the economic benefits from using the underlying asset. Once a lease has been identified, the Company must determine the lease term, the present value of lease payments and the classification of the lease as either operating or financing. The lease term is determined to be the non-cancelable period including any lessee renewal options which are considered to be reasonably certain of exercise. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. The present value of lease payments includes fixed and certain variable payments, less lease incentives, together with amounts probable of being owed by the Company under residual value guarantees and, if reasonably certain of being paid, the cost of certain renewal options and early termination penalties set forth in the lease arrangement. To calculate the present value of lease payments, we use our incremental borrowing rate based on the information available at commencement date, as the rate implicit in the lease is generally not readily available. In making the determination of whether a lease is an operating lease or a finance lease, the Company considers the lease term in relation to the economic life of the leased asset, the present value of lease payments in relation to the fair value of the leased asset and certain other factors. Upon the commencement of the lease, the Company will record a lease liability and right-of-use (“ROU”) asset based on the present value of the future minimum lease payments over the lease term at commencement date. The ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. For operating leases, a single lease cost is generally recognized in the Consolidated Statements of Operations on a straight-line basis over the lease term unless an impairment has been recorded with respect to a leased asset. For finance leases, amortization expense and interest expense are recognized separately in the Consolidated Statements of Operations, with amortization expense generally recorded on a straight-line basis and interest expense recorded using the effective interest method. Variable lease costs not initially included in the lease liability and ROU asset impairment charges are expensed as incurred.
Cost of Sales, including Amortization of Intangibles	Cost of Sales, including Amortization of Intangibles Cost of sales includes all costs related to bringing products to their final selling destination, which includes direct and indirect costs, such as direct material, labor and overhead expenses. Additionally, cost of sales includes product royalties, depreciation, amortization and costs to renew or extend recognized intangible assets, freight charges and other shipping and handling expenses.
Research and Development	Research and Development Research and development costs are expensed as incurred, including all production costs until a drug candidate is approved by the FDA. Research and development expenses include costs associated with internal projects as well as costs associated with third-party research and development contracts.
Contingencies	Contingencies Loss contingencies, including litigation-related contingencies, are included in the Consolidated Statements of Operations when the Company concludes that a loss is both probable and reasonably estimable. Legal fees for litigation-related matters are expensed as incurred and included in the Consolidated Statements of Operations under the Selling, general and administrative expenses line item.
Restructuring Costs	Restructuring Costs The Company records charges associated with approved restructuring plans to remove duplicative headcount and infrastructure associated with business acquisitions or to simplify business processes. Restructuring charges can include severance costs to eliminate a specified number of employees, infrastructure charges to vacate facilities and consolidate operations and contract cancellation costs. The Company records restructuring charges based on estimated employee terminations, site closure and consolidation plans. The Company accrues severance and other employee separation costs under these actions when it is probable that a liability exists and the amount is reasonably estimable.
Share-based Compensation	Share-based Compensation Share-based compensation costs are recognized over the vesting period, using a straight-line method, based on the fair value of the instrument on the date of grant less an estimate for expected forfeitures. The Company uses the Black-Scholes valuation model to determine the fair value of stock options, the stock price on the grant date to value restricted stock and the Monte-Carlo simulation model to determine the fair value of performance-based shares. The Black-Scholes valuation and Monte-Carlo simulation models include various assumptions, including the expected volatility, the expected life of the award, dividend yield and the risk-free interest rate as well as performance assumptions of peer companies. These assumptions involve inherent uncertainties based on market conditions which are generally outside the Company’s control. Changes in these assumptions could have a material impact on share-based compensation costs recognized in the Consolidated Financial Statements.
Self-Insurance	Self-Insurance The Company self-insures for certain employee medical and prescription benefits. The Company also maintains stop loss coverage with third party insurers to limit its total liability exposure. The liability for self-insured risks is primarily calculated using independent third-party actuarial valuations which take into account actual claims, claims growth and claims incurred but not yet reported. Actual experience, including claim frequency and severity as well as health-care inflation, could result in different liabilities than the amounts currently recorded. The liability for self-insured risks under this plan was not material to the consolidated financial position of the Company as of September 30, 2020 and June 30, 2020.
Income Taxes	Income Taxes The Company uses the liability method to account for income taxes as prescribed by ASC 740, Income Taxes Deferred income tax assets and liabilities are adjusted to recognize the effects of changes in tax laws or enacted tax rates in the period during which they are signed into law. The factors used to assess the likelihood of realization are the Company’s forecast of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. Under ASC 740, Income Taxes , a valuation allowance is required when it is more likely than not that all or some portion of the deferred tax assets will not be realized through generating sufficient future taxable income. Failure to achieve forecasted taxable income in applicable tax jurisdictions could affect the ultimate realization of deferred tax assets and could result in an increase in the Company’s effective tax rate on future earnings. The Company may recognize the tax benefit from an uncertain tax position claimed on a tax return only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The authoritative accounting standards also provide guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. On March 27, 2020, in response to COVID-19 and its detrimental impact to the global economy, President Trump signed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) into law, which provides a stimulus to the U.S. economy in the form of various individual and business assistance programs as well as temporary changes to existing tax law. Among the changes to the provision in business tax laws include a five-year net operating loss carryback for the Fiscal 2019 - 2021 tax years, a deferral of the employer’s portion of certain payroll tax, and an increase in the interest expense deductibility limitation for the Fiscal 2020 and 2021 tax years. ASC 740 requires the tax effects of changes in tax laws or rates to be recorded in the period of enactment. As a result of the CARES Act, the Company carried back its Fiscal 2020 taxable loss into the Fiscal 2015 tax year. The Company also reviewed its existing deferred tax assets in light of COVID-19 and determined that no additional valuation allowance is required at this time. However, the Company will continue to monitor the status of the COVID-19 pandemic and its impact on our results of operations.
Earnings (Loss) Per Common Share	Earnings (Loss) Per Common Share A dual presentation of basic and diluted earnings (loss) per common share is required on the face of the Company's Consolidated Statements of Operations as well as a reconciliation of the computation of basic earnings (loss) per common share to diluted earnings (loss) per common share. Basic earnings (loss) per common share excludes the dilutive impact of potentially dilutive securities and is computed by dividing net income (loss) by the weighted average number of shares outstanding during the period. Beginning in the first quarter of Fiscal 2020, the Company's diluted earnings (loss) per common share is computed using the "if-converted" method by dividing the adjusted "if-converted" net income by the adjusted weighted average number of shares of common stock outstanding during the period. The adjusted "if-converted" net income is adjusted for interest expense and amortization of debt issuance costs, both net of tax, associated with the Company’s 4.50% Convertible Senior Notes due 2026. The weighted average number of diluted shares is adjusted for the potential dilutive effect of the exercise of stock options, treats unvested restricted stock and performance-based shares as if it were vested, and assumes the conversion of the 4.50% Convertible Senior Notes. Anti-dilutive securities are excluded from the calculation. Dilutive shares are also excluded in the calculation in periods of net loss because the effect of including such securities would be anti-dilutive.
Comprehensive Income (Loss)	Comprehensive Income (Loss) Comprehensive income (loss) includes all changes in equity during a period except those that resulted from investments by or distributions to the Company’s stockholders. Other comprehensive income (loss) refers to gains and losses that are included in comprehensive income (loss), but excluded from income (loss) for all amounts are recorded directly as an adjustment to stockholders’ equity.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	3 Months Ended
Summary of Significant Accounting Policies (Tables)	Sep. 30, 2020
Summary of Significant Accounting Policies
Schedule of the Company's net sales by medical indication	Three Months Ended (In thousands) September 30, Medical Indication 2020 2019 Analgesic $ 3,120 $ 1,884 Anti-Psychosis 13,028 28,034 Cardiovascular 19,714 21,606 Central Nervous System 22,525 19,257 Endocrinology 3,233 — Gastrointestinal 17,100 16,962 Infectious Disease 21,932 11,895 Migraine 9,690 9,143 Respiratory/Allergy/Cough/Cold 1,426 2,707 Urinary 1,458 435 Other 7,634 9,861 Contract manufacturing revenue 5,619 5,558 Total net sales $ 126,479 $ 127,342
Summary of products which accounted for at least 10% of total net sales	Three Months Ended September 30, 2020 2019 Product 1 15 % 7 % Product 2 9 % 20 %
Summary of customers which accounted for at least 10% of total net sales	Three Months Ended September 30, 2020 2019 Customer A 26 % 25 % Customer B 22 % 27 % Customer C 10 % 13 %

Restructuring Charges (Tables)

Restructuring Charges (Tables)	3 Months Ended
Restructuring Charges (Tables)	Sep. 30, 2020
Restructuring Charges
Schedule of reconciliation of changes in restructuring liabilities associated with restructuring program	Employee (In thousands) Separation Costs Total Balance at June 30, 2020 $ — $ — Restructuring Charges 4,043 4,043 Payments (3,638) (3,638) Balance at September 30, 2020 $ 405 $ 405

Accounts Receivable, net (Table

Accounts Receivable, net (Tables)	3 Months Ended
Accounts Receivable, net (Tables)	Sep. 30, 2020
Accounts Receivable, net
Schedule of accounts receivable	September 30, June 30, (In thousands) 2020 2020 Gross accounts receivable $ 284,751 $ 271,557 Less: Chargebacks reserve (70,437) (61,877) Less: Rebates reserve (17,303) (24,536) Less: Returns reserve (40,535) (40,796) Less: Other deductions (16,597) (17,557) Less: Allowance for doubtful accounts (1,083) (1,103) Accounts receivable, net $ 138,796 $ 125,688
Schedule of major category of revenue-related reserves	Reserve Category (In thousands) Chargebacks Rebates Returns Other Total Balance at June 30, 2020 $ 61,877 $ 62,711 $ 40,796 $ 17,557 $ 182,941 Current period provision 188,297 34,280 5,526 15,781 243,884 Credits issued during the period (179,737) (42,269) (5,787) (16,741) (244,534) Balance at September 30, 2020 $ 70,437 $ 54,722 $ 40,535 $ 16,597 $ 182,291 Reserve Category (In thousands) Chargebacks Rebates Returns Other Total Balance at June 30, 2019 $ 89,567 $ 78,274 $ 55,554 $ 18,128 $ 241,523 Current period provision 207,933 58,509 3,694 12,705 282,841 Credits issued during the period (214,017) (61,952) (5,256) (11,724) (292,949) Balance at September 30, 2019 $ 83,483 $ 74,831 $ 53,992 $ 19,109 $ 231,415

Inventories (Tables)

Inventories (Tables)	3 Months Ended
Inventories (Tables)	Sep. 30, 2020
Inventories
Schedule of Inventories	September 30, June 30, (In thousands) 2020 2020 Raw Materials $ 62,225 $ 59,703 Work-in-process 13,815 12,235 Finished Goods 80,438 70,929 Total $ 156,478 $ 142,867

Property, Plant and Equipment_2

Property, Plant and Equipment, net (Tables)	3 Months Ended
Property, Plant and Equipment, net (Tables)	Sep. 30, 2020
Property, Plant and Equipment, net
Schedule of property, plant and equipment, net	September 30, June 30, (In thousands) Useful Lives 2020 2020 Land — $ 1,783 $ 1,783 Building and improvements 10 - 39 years 103,265 100,285 Machinery and equipment 5 - 10 years 165,896 164,704 Furniture and fixtures 5 - 7 years 3,343 3,116 Less accumulated depreciation (108,716) (102,983) 165,571 166,905 Construction in progress 11,413 12,613 Property, plant and equipment, net $ 176,984 $ 179,518

Intangible Assets (Tables)

Intangible Assets (Tables)	3 Months Ended
Intangible Assets (Tables)	Sep. 30, 2020
Intangible Assets
Summary of intangible assets, net	Weighted Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Avg. Life September 30, June 30, September 30, June 30, September 30, June 30, (In thousands) (Yrs.) 2020 2020 2020 2020 2020 2020 Definite-lived: KUPI product rights 15 416,154 416,154 (132,263) (125,327) 283,891 290,827 KUPI trade name 2 2,920 2,920 (2,920) (2,920) — — KUPI other intangible assets 15 19,000 19,000 (6,145) (5,828) 12,855 13,172 Silarx product rights 15 20,000 20,000 (3,889) (3,556) 16,111 16,444 Other product rights 10 53,718 50,718 (6,429) (5,426) 47,289 45,292 Total definite-lived $ 511,792 $ 508,792 $ (151,646) $ (143,057) $ 360,146 $ 365,735 Indefinite-lived: KUPI in-process research and development — $ 9,000 $ 9,000 $ — $ — $ 9,000 $ 9,000 Total indefinite-lived 9,000 9,000 — — 9,000 9,000 Total intangible assets, net $ 520,792 $ 517,792 $ (151,646) $ (143,057) $ 369,146 $ 374,735
Summary of future annual amortization expense	(In thousands) Amortization Fiscal Year Ending June 30, Expense 2021 $ 25,873 2022 36,097 2023 35,795 2024 35,495 2025 35,095 Thereafter 191,791 $ 360,146

Long-Term Debt (Tables)

Long-Term Debt (Tables)	3 Months Ended
Long-Term Debt (Tables)	Sep. 30, 2020
Long-Term Debt
Summary of long-term debt, net	September 30, June 30, (In thousands) 2020 2020 Term Loan A due 2020; 6.00% as of September 30, 2020 $ 41,969 $ 48,844 Unamortized discount and other debt issuance costs (97) (433) Term Loan A, net 41,872 48,411 Term Loan B due 2022; 6.38% as of September 30, 2020 563,021 572,857 Unamortized discount and other debt issuance costs (20,573) (23,278) Term Loan B, net 542,448 549,579 4.50% Convertible Senior Notes due 2026 86,250 86,250 Unamortized discount and other debt issuance costs (2,986) (3,111) 4.50% Convertible Senior Notes, net 83,264 83,139 $125 million Revolving Credit Facility due 2020 — — Total debt, net 667,584 681,129 Less short-term borrowings and current portion of long-term debt (81,314) (88,189) Total long-term debt, net $ 586,270 $ 592,940
Summary of long-term debt amounts due	Amounts Payable (In thousands) to Institutions 2021 $ 81,314 2022 39,345 2023 484,331 2024 — 2025 — Thereafter 86,250 Total $ 691,240

Commitments (Tables)

Commitments (Tables)	3 Months Ended
Commitments (Tables)	Sep. 30, 2020
Commitments
Schedule of components of lease cost	Three Months Ended Three Months Ended (In thousands) September 30, 2020 September 30, 2019 Operating lease cost $ 402 $ 481 Variable lease cost 39 28 Short-term lease cost (a) 118 156 Total $ 559 $ 665 (a) Not recorded on the Consolidated Balance Sheet.
Schedule of supplemental cash flow information and non-cash activity	Three Months Ended Three Months Ended (In thousands) September 30, 2020 September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 303 $ 481 Non-cash activity: ROU assets obtained in exchange for new operating lease liabilities $ — $ —
Schedule of weighted-average remaining lease term	Three Months Ended Three Months Ended September 30, 2020 September 30, 2019 Weighted-average remaining lease term 8 years 9 years Weighted-average discount rate 7.98 % 7.50 %
Schedule of maturities of lease liabilities	(In thousands) Amounts Due 2021 $ 1,498 2022 2,125 2023 2,144 2024 2,164 2025 2,183 Thereafter 5,749 Total lease payments 15,863 Less: Imputed interest 4,299 Present value of lease liabilities $ 11,564

Accumulated Other Comprehensi_2

Accumulated Other Comprehensive Loss (Tables)	3 Months Ended
Accumulated Other Comprehensive Loss (Tables)	Sep. 30, 2020
Accumulated Other Comprehensive Loss.
Schedule of Accumulated Other Comprehensive Loss	September 30, (In thousands) 2020 2019 Foreign Currency Translation Beginning Balance $ (627) $ (615) Net income (loss) on foreign currency translation (net of tax of $0 and $0) 79 (46) Other comprehensive income (loss), net of tax 79 (46) Total Accumulated Other Comprehensive Loss $ (548) $ (661)

Loss Per Common Share (Tables)

Loss Per Common Share (Tables)	3 Months Ended
Loss Per Common Share (Tables)	Sep. 30, 2020
Loss Per Common Share
Summary of reconciliation of the Company's basic and diluted loss per common share	Three Months Ended September 30, (In thousands, except share and per share data) 2020 2019 Numerator: Net loss $ (6,499) $ (12,157) Interest expense applicable to the Notes, net of tax — — Amortization of debt issuance costs applicable to the Notes, net of tax — — Adjusted “if-converted” net loss $ (6,499) $ (12,157) Denominator: Basic weighted average common shares outstanding 39,070,982 38,309,267 Effect of potentially dilutive options and restricted stock awards — — Effect of conversion of the Notes — — Diluted weighted average common shares outstanding 39,070,982 38,309,267 Loss per common share: Basic $ (0.17) $ (0.32) Diluted $ (0.17) $ (0.32)

Share-based Compensation (Table

Share-based Compensation (Tables)	3 Months Ended
Share-based Compensation (Tables)	Sep. 30, 2020
Share-based Compensation
Schedule of weighted average assumptions	September 30, 2020 September 30, 2019 Risk-free interest rate 0.2 % 1.9 % Expected volatility 82.5 % 73.7 % Expected dividend yield — % — % Forfeiture rate — % — % Expected term 5.0 years 5.1 years Weighted average fair value $ 3.86 $ 4.04
Summary of stock option award activity	Weighted Weighted- Average Average Aggregate Remaining Exercise Intrinsic Contractual (In thousands, except for weighted average price and life data) Awards Price Value Life (yrs.) Outstanding at June 30, 2020 991 $ 12.11 $ 678 5.6 Granted 309 $ 5.95 Exercised (32) $ 4.16 $ 48 Forfeited, expired or repurchased (187) $ 16.56 Outstanding at September 30, 2020 1,081 $ 9.81 $ 186 7.8 Vested and expected to vest at September 30, 2020 408 $ 14.92 $ 136 5.3 Exercisable at September 30, 2020 1,079 $ 9.81 $ 186 7.8
Summary of non-vested restricted stock awards	Weighted Average Grant - Aggregate (In thousands, except for weighted average price data) Awards date Fair Value Intrinsic Value Non-vested at June 30, 2020 1,344 $ 8.70 Granted 870 5.72 Vested (664) 8.75 $ 3,798 Forfeited (66) 9.32 Non-vested at September 30, 2020 1,484 $ 6.90
Schedule of non-vested performance-based shares	Weighted Average Grant - (In thousands, except for weighted average price and life data) Awards date Fair Value Non-vested at June 30, 2020 204 $ 12.99 Granted 339 $ 9.22 Performance adjustment (1) (12) $ 25.58 Non-vested at September 30, 2020 531 $ 10.29 (1) Represents the adjustment based on the performance of the September 2017 awards, which was below the Threshold goal level at the end of the three-year performance period
Schedule of allocation of share-based compensation	Three Months Ended September 30, (In thousands) 2020 2019 Selling, general and administrative expenses $ 2,714 $ 3,635 Research and development expenses 155 224 Cost of sales 473 600 Total $ 3,342 $ 4,459 Tax benefit at statutory rate $ 752 $ 1,003

Assets Held for Sale (Tables)

Assets Held for Sale (Tables)	3 Months Ended
Assets Held for Sale (Tables)	Sep. 30, 2020
Assets Held for Sale
Schedule of financial results of the Cody API business	Three Months Ended September 30, (In thousands) 2020 2019 Net sales $ — $ 1,067 Pretax loss attributable to Cody API business (502) (4,417)

The Business And Nature of Op_2

The Business And Nature of Operations (Details) $ in Millions	3 Months Ended
	Sep. 30, 2020USD ($)
The Business And Nature of Operations
Impairments or other write-downs	$ 0

Summary of Significant Accoun_4

Summary of Significant Accounting Policies - Intangible Assets (Details)	3 Months Ended
	Sep. 30, 2020
Minimum
Intangible Assets
Estimated useful lives	5 years
Maximum
Intangible Assets
Estimated useful lives	15 years

Summary of Significant Accoun_5

Summary of Significant Accounting Policies - Segment Information (Details) $ in Thousands	3 Months Ended
	Sep. 30, 2020USD ($)segment	Sep. 30, 2019USD ($)
Medical Indication Information
Total net sales	$ 126,479	$ 127,342
Number of reportable segments \| segment	1
Analgesic
Medical Indication Information
Total net sales	$ 3,120	1,884
Anti-Psychosis
Medical Indication Information
Total net sales	13,028	28,034
Cardiovascular
Medical Indication Information
Total net sales	19,714	21,606
Central Nervous System
Medical Indication Information
Total net sales	22,525	19,257
Endocrinology
Medical Indication Information
Total net sales	3,233
Gastrointestinal
Medical Indication Information
Total net sales	17,100	16,962
Infectious Disease
Medical Indication Information
Total net sales	21,932	11,895
Migraine
Medical Indication Information
Total net sales	9,690	9,143
Respiratory/Allergy/Cough/Cold
Medical Indication Information
Total net sales	1,426	2,707
Urinary
Medical Indication Information
Total net sales	1,458	435
Other
Medical Indication Information
Total net sales	7,634	9,861
Contract manufacturing revenue
Medical Indication Information
Total net sales	$ 5,619	$ 5,558

Summary of Significant Accoun_6

Summary of Significant Accounting Policies - Concentrations (Details) - Net sales	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Products \| Product 1
Concentration risk
Concentration risk (as a percent)	15.00%	7.00%
Products \| Product 2
Concentration risk
Concentration risk (as a percent)	9.00%	20.00%
Customers \| Customer A
Concentration risk
Concentration risk (as a percent)	26.00%	25.00%
Customers \| Customer B
Concentration risk
Concentration risk (as a percent)	22.00%	27.00%
Customers \| Customer C
Concentration risk
Concentration risk (as a percent)	10.00%	13.00%

Restructuring Charges - Restruc

Restructuring Charges - Restructuring Program (Details) $ in Thousands	Jul. 10, 2020employee	Sep. 30, 2020USD ($)	Sep. 30, 2019USD ($)
Restructuring Charges
Restructuring expenses		$ 4,043	$ 1,388
2020 Restructuring Plan
Restructuring Charges
Positions eliminated estimate \| employee	80
Work force positions reduced (as a percent)	8.50%
Restructuring expenses		4,043
Expected cost savings due to restructuring		15,000
2020 Restructuring Plan \| Employee separation costs
Restructuring Charges
Restructuring expenses		$ 4,043

Restructuring Charges - Restr_2

Restructuring Charges - Restructuring Program Change (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Reconciliation of the changes in restructuring liabilities
Restructuring charges	$ 4,043	$ 1,388
2020 Restructuring Plan
Reconciliation of the changes in restructuring liabilities
Restructuring charges	4,043
Payments	(3,638)
Ending balance for the period	405
2020 Restructuring Plan \| Employee separation costs
Reconciliation of the changes in restructuring liabilities
Restructuring charges	4,043
Payments	(3,638)
Ending balance for the period	$ 405

Accounts Receivable, net (Detai

Accounts Receivable, net (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Jun. 30, 2020
Accounts receivable, net
Gross accounts receivable	$ 284,751	$ 271,557
Less: Allowance for doubtful accounts	(1,083)	(1,103)
Accounts receivable, net	138,796	125,688
Chargebacks
Accounts receivable, net
Less: reserve	(70,437)	(61,877)
Rebates
Accounts receivable, net
Less: reserve	(17,303)	(24,536)
Returns
Accounts receivable, net
Less: reserve	(40,535)	(40,796)
Other
Accounts receivable, net
Less: reserve	$ (16,597)	$ (17,557)

Accounts Receivable, net - Reve

Accounts Receivable, net - Revenue reserve (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Accounts receivable, net
Balance at the beginning of the period	$ 182,941	$ 241,523
Current period provision	243,884	282,841
Credits issued during the period	(244,534)	(292,949)
Balance at the end of the period	182,291	231,415
Chargebacks
Accounts receivable, net
Balance at the beginning of the period	61,877	89,567
Current period provision	188,297	207,933
Credits issued during the period	(179,737)	(214,017)
Balance at the end of the period	70,437	83,483
Rebates
Accounts receivable, net
Balance at the beginning of the period	62,711	78,274
Current period provision	34,280	58,509
Credits issued during the period	(42,269)	(61,952)
Balance at the end of the period	54,722	74,831
Returns
Accounts receivable, net
Balance at the beginning of the period	40,796	55,554
Current period provision	5,526	3,694
Credits issued during the period	(5,787)	(5,256)
Balance at the end of the period	40,535	53,992
Other
Accounts receivable, net
Balance at the beginning of the period	17,557	18,128
Current period provision	15,781	12,705
Credits issued during the period	(16,741)	(11,724)
Balance at the end of the period	16,597	19,109
Rebates
Accounts receivable, net
Current period provision	$ 34,300	$ 58,500

Accounts Receivable, net - Re_2

Accounts Receivable, net - Revenue reserve information (Details)	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Chargebacks
Accounts receivable, net
Percentage of provision for rebates, chargebacks, returns and other adjustments on gross sales	51.70%	51.40%
Rebates
Accounts receivable, net
Percentage of provision for rebates, chargebacks, returns and other adjustments on gross sales	9.40%	14.50%
Returns
Accounts receivable, net
Percentage of provision for rebates, chargebacks, returns and other adjustments on gross sales	1.50%	0.90%
Other
Accounts receivable, net
Percentage of provision for rebates, chargebacks, returns and other adjustments on gross sales	4.30%	3.10%

Inventories (Details)

Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Jun. 30, 2020
Inventories:
Raw Materials	$ 62,225	$ 59,703
Work-in-process	13,815	12,235
Finished Goods	80,438	70,929
Net inventory	$ 156,478	$ 142,867

Inventories - Additional inform

Inventories - Additional information (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Inventories:
Write-down to net realizable value	$ 2.6	$ 3.5

Property, Plant and Equipment_3

Property, Plant and Equipment, net (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Jun. 30, 2020
Property, Plant and Equipment, net
Less: accumulated depreciation	$ (108,716)		$ (102,983)
Property, plant and equipment, net before construction in progress	165,571		166,905
Property, plant and equipment, net	176,984		179,518
Depreciation expense	5,800	$ 5,800
Held in foreign countries
Property, Plant and Equipment, net
Property, plant and equipment, net	600		600
Land
Property, Plant and Equipment, net
Property, plant and equipment, gross	1,783		1,783
Building and improvements
Property, Plant and Equipment, net
Property, plant and equipment, gross	103,265		100,285
Machinery and equipment
Property, Plant and Equipment, net
Property, plant and equipment, gross	165,896		164,704
Furniture and fixtures
Property, Plant and Equipment, net
Property, plant and equipment, gross	3,343		3,116
Construction in progress
Property, Plant and Equipment, net
Property, plant and equipment, net	$ 11,413		$ 12,613

Property, Plant and Equipment_4

Property, Plant and Equipment, net - Useful Lives (Details)	3 Months Ended
Property, Plant and Equipment, net - Useful Lives (Details)	Sep. 30, 2020
Building and improvements \| Minimum
Property, Plant and Equipment, net
Useful Lives	10 years
Building and improvements \| Maximum
Property, Plant and Equipment, net
Useful Lives	39 years
Machinery and equipment \| Minimum
Property, Plant and Equipment, net
Useful Lives	5 years
Machinery and equipment \| Maximum
Property, Plant and Equipment, net
Useful Lives	10 years
Furniture and fixtures \| Minimum
Property, Plant and Equipment, net
Useful Lives	5 years
Furniture and fixtures \| Maximum
Property, Plant and Equipment, net
Useful Lives	7 years

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($) $ / shares in Units, $ in Millions	Sep. 30, 2020	Jun. 30, 2020
Term loan
Debt Instrument [Line Items]
Estimated fair value of loan	$ 592	$ 608
4.50% Convertible Senior Notes due 2026
Debt Instrument [Line Items]
Estimated fair value of loan	$ 52	$ 58
Interest rate (as a percent)	4.50%
Initial conversion price	$ 15.29

Intangible Assets - Definite-li

Intangible Assets - Definite-lived (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2020	Jun. 30, 2020
Finite-Lived Intangible Assets
Gross Carrying Amount	$ 511,792	$ 508,792
Accumulated Amortization	(151,646)	(143,057)
Intangible Assets, Net	$ 360,146	365,735
Product rights \| KUPI
Finite-Lived Intangible Assets
Weighted Avg. Life	15 years
Gross Carrying Amount	$ 416,154	416,154
Accumulated Amortization	(132,263)	(125,327)
Intangible Assets, Net	$ 283,891	290,827
Product rights \| Silarx
Finite-Lived Intangible Assets
Weighted Avg. Life	15 years
Gross Carrying Amount	$ 20,000	20,000
Accumulated Amortization	(3,889)	(3,556)
Intangible Assets, Net	$ 16,111	16,444
Trade name \| KUPI
Finite-Lived Intangible Assets
Weighted Avg. Life	2 years
Gross Carrying Amount	$ 2,920	2,920
Accumulated Amortization	$ (2,920)	(2,920)
Other intangible assets
Finite-Lived Intangible Assets
Weighted Avg. Life	10 years
Gross Carrying Amount	$ 53,718	50,718
Accumulated Amortization	(6,429)	(5,426)
Intangible Assets, Net	$ 47,289	45,292
Other intangible assets \| KUPI
Finite-Lived Intangible Assets
Weighted Avg. Life	15 years
Gross Carrying Amount	$ 19,000	19,000
Accumulated Amortization	(6,145)	(5,828)
Intangible Assets, Net	$ 12,855	$ 13,172

Intangible Assets - Indefinite

Intangible Assets - Indefinite lived (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Jun. 30, 2020
Indefinite-lived
Indefinite-lived assets, net	$ 9,000	$ 9,000
Total intangible assets - Gross Carrying Amount	520,792	517,792
Accumulated Amortization	(151,646)	(143,057)
Total intangible assets, Net	369,146	374,735
In-process research and development \| KUPI
Indefinite-lived
Indefinite-lived assets, net	$ 9,000	$ 9,000

Intangible Assets - Future Amor

Intangible Assets - Future Amortization (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Jun. 30, 2020
Intangible Assets
Amortization expense	$ 8,600	$ 7,000
Future annual amortization expense:
2021	25,873
2022	36,097
2023	35,795
2024	35,495
2025	35,095
Thereafter	191,791
Intangible Assets, Net	$ 360,146		$ 365,735

Long-Term Debt - Net (Details)

Long-Term Debt - Net (Details) - USD ($) $ in Thousands	Nov. 25, 2020	Sep. 30, 2020	Jun. 30, 2020	Sep. 30, 2019
Long-term debt
Debt, gross		$ 691,240
Total debt, net		667,584	$ 681,129
Less short-term borrowings and current portion of long-term debt		(81,314)	(88,189)
Long-term debt, net		$ 586,270	592,940
Weighted average interest rate (as a percent)		8.00%		8.80%
Term Loan A due 2020
Long-term debt
Debt, gross		$ 41,969	48,844
Unamortized discount and other debt issuance costs		(97)	(433)
Total debt, net	$ 42,000	$ 41,872	48,411
Interest rate (as a percent)		6.00%
Term Loan B due 2022
Long-term debt
Debt, gross		$ 563,021	572,857
Unamortized discount and other debt issuance costs		(20,573)	(23,278)
Total debt, net		$ 542,448	549,579
Interest rate (as a percent)		6.38%
4.50% Convertible Senior Notes due 2026
Long-term debt
Debt, gross		$ 86,250	86,250
Unamortized discount and other debt issuance costs		(2,986)	(3,111)
Total debt, net		$ 83,264	$ 83,139
Interest rate (as a percent)		4.50%
Revolving Credit Facility due 2020
Long-term debt
Maximum borrowing capacity		$ 125,000

Long-Term Debt - Maturity (Deta

Long-Term Debt - Maturity (Details) $ in Thousands	Sep. 30, 2020USD ($)
Long-term Debt, Rolling Maturity
2021	$ 81,314
2022	39,345
2023	484,331
Thereafter	86,250
Total	$ 691,240

Legal, Regulatory Matters and_2

Legal, Regulatory Matters and Contingencies (Details)	Jan. 14, 2020USD ($)	May 22, 2019USD ($)	May 10, 2019employeecompany	Dec. 31, 2016company	Aug. 31, 2019USD ($)product	Nov. 30, 2016item	Sep. 30, 2020lawsuitstateproductDistributortranche	Jun. 30, 2018product	Oct. 31, 2017product
Doxycycline Monohydrate
Legal, Regulatory Matters and Contingencies
Number of drugs							1
State Attorneys General Inquiry into The Generic Pharmaceutical Industry
Legal, Regulatory Matters and Contingencies
Number of manufacturers and distributors \| company			33	6
Number of drugs									13
Number of officers \| employee			1
State Attorneys General Inquiry into The Generic Pharmaceutical Industry \| Doxycycline Monohydrate
Legal, Regulatory Matters and Contingencies
Number of drugs									1
Government Pricing
Legal, Regulatory Matters and Contingencies
Settlement payment \| $		$ 9,400,000
Reimbursement of overpayment \| $					$ 8,100,000
Private Antitrust and Consumer Protection Litigation
Legal, Regulatory Matters and Contingencies
Number of manufacturers and distributors \| Distributor							30
Number of drugs					135		18		6
Number of Tranches \| tranche							3
Number of States \| state							49
Private Antitrust and Consumer Protection Litigation \| Minimum
Legal, Regulatory Matters and Contingencies
Number of lawsuits \| lawsuit							100
End Payer Plaintiffs
Legal, Regulatory Matters and Contingencies
Number of drugs								14
Indirect Reseller Plaintiffs
Legal, Regulatory Matters and Contingencies
Number of drugs								15
Shareholder Litigation
Legal, Regulatory Matters and Contingencies
Number of officers \| item						2
Litigation settlement amount payable to other party \| $	$ 600,000

Commitments - Leases (Details)

Commitments - Leases (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Jun. 30, 2020	Sep. 30, 2019	Jul. 01, 2019
Loss Contingencies [Line Items]
Right-of-use asset	$ 9,085	$ 9,343
Present value of lease liabilities	11,564	10,900
ROU current liability	2,018	1,097
ROU non-current liability	$ 9,546	$ 9,844
ASU 2016-02 \| Period of adoption, adjustment
Loss Contingencies [Line Items]
Right-of-use asset				$ 7,900
Present value of lease liabilities				$ 7,900
ASU 2016-02 \| Period of adoption, adjustment \| Cody Restructuring Plan
Loss Contingencies [Line Items]
Right-of-use asset			$ 1,200

Commitments - Components of lea

Commitments - Components of lease cost (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Commitments
Operating lease cost	$ 402	$ 481
Variable lease cost	39	28
Short-term lease cost	118	156
Lease, Cost, Total	$ 559	$ 665

Commitments - Cash flow informa

Commitments - Cash flow information (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Lease cash flow
Operating cash flows from operating leases.	$ 303	$ 481
Weighted-average
Weighted-average remaining lease term	8 years	9 years
Weighted-average discount rate	7.98%	7.50%

Commitments - Maturities of lea

Commitments - Maturities of lease liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Jun. 30, 2020
Maturities of lease liabilities
2021	$ 1,498
2022	2,125
2023	2,144
2024	2,164
2025	2,183
Thereafter	5,749
Total lease payments	15,863
Less: Imputed interest	4,299
Present value of lease liabilities	$ 11,564	$ 10,900

Commitments - Other Commitment

Commitments - Other Commitment (Details) $ in Millions	12 Months Ended
Commitments - Other Commitment (Details) $ in Millions	Jun. 30, 2020USD ($)	Jun. 30, 2019USD ($)	Jun. 30, 2017USD ($)	Sep. 30, 2020USD ($)
License and Collaboration Agreement With HEC
Commitments
Maximum amount to be loaned	$ 32
License and Collaboration Agreement, Excess Development Cost Split Ratio	1
License and Collaboration Agreement With HEC \| First ten years
Commitments
License and Collaboration Agreement, Profit Split Ratio	1
License and Collaboration Agreement, Profit Split Period	10 years
License and Collaboration Agreement With HEC \| Next five years
Commitments
License and Collaboration Agreement, Profit Split Ratio	1.5
License and Collaboration Agreement, Profit Split Period	5 years
Variable interest entity
Commitments
Maximum amount to be loaned			$ 15
Expiration period			7 years
Loans receivable fixed rate (as a percent)			2.00%
Percentage of outstanding loan		50.00%
Proceeds from sale of loan		$ 5.6
Loan receivable				$ 6.5

Accumulated Other Comprehensi_3

Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Jun. 30, 2020
Accumulated Other Comprehensive Loss.
Beginning Balance	$ (627)	$ (615)
Net income (loss) on foreign currency translation	79	(46)
Other comprehensive income (loss), net of tax	79	(46)
Ending Balance	(548)	(661)
Total Accumulated Other Comprehensive Loss	(548)		$ (627)
Net income (loss) on foreign currency translation, tax	$ 0	$ 0

Loss Per Common Share (Details)

Loss Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Numerator:
Net loss	$ (6,499)	$ (12,157)
Adjusted "if-converted" net loss	$ (6,499)	$ (12,157)
Denominator:
Basic weighted average common shares outstanding	39,070,982	38,309,267
Diluted weighted average common shares outstanding	39,070,982	38,309,267
Loss per common share:
Basic (in dollars per share)	$ (0.17)	$ (0.32)
Diluted (in dollars per share)	$ (0.17)	$ (0.32)
Anti-dilutive shares excluded in the computation of diluted earnings per share	8,200,000	2,900,000

Share-based Compensation - Empl

Share-based Compensation - Employee Compensation Plans (Details) shares in Thousands, $ in Millions	3 Months Ended
	Sep. 30, 2020USD ($)ShareBasedCompensationPlanshares
Stock-based Compensation
Number of share-based employee compensation plans \| ShareBasedCompensationPlan	2
Aggregate number of shares authorized for issuance	6,500
Shares for future issuances	45
Share-based compensation awards maximum contractual term	10 years
Total unrecognized compensation cost related to non-vested share-based compensation awards granted under the Plans \| $	$ 14.7
Maximum
Stock-based Compensation
Share-based compensation awards vesting period	3 years
Weighted average period during which the cost is expected to be recognized	2 years 6 months

Share-based Compensation - Opti

Share-based Compensation - Options Valuation (Details) - Stock options - $ / shares	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Assumptions used to estimate fair values
Risk-free interest rate (as a percent)	0.20%	1.90%
Expected volatility (as a percent)	82.50%	73.70%
Expected dividend yield (as a percent)	0.00%
Expected term (in years)	5 years	5 years 1 month 6 days
Weighted average fair value (in dollars per share)	$ 3.86	$ 4.04

Share-based Compensation - Op_2

Share-based Compensation - Options Rollforward (Details) - Stock options - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended	12 Months Ended
	Sep. 30, 2020	Jun. 30, 2020
Awards
Outstanding at the beginning of the period (in shares)	991
Granted (in shares)	309
Exercised (in shares)	(32)
Forfeited, expired or repurchased (in shares)	(187)
Outstanding at the end of the period (in shares)	1,081	991
Vested and expected to vest, Awards (in shares)	408
Exercisable at the end of the period (in shares)	1,079
Weighted-Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)	$ 12.11
Granted (in dollars per share)	5.95
Exercised (in dollars per share)	4.16
Forfeited, expired or repurchased (in dollars per share)	16.56
Outstanding at the end of the period (in dollars per share)	9.81	$ 12.11
Vested and expected to vest, Weighted-Average Exercise Price (in dollars per share)	14.92
Exercisable at the end of the period (in dollars per share)	$ 9.81
Aggregate Intrinsic Value
Outstanding at the beginning of the period (in dollars)	$ 678
Exercised (in dollars)	48
Outstanding at the end of the period (in dollars)	186	$ 678
Vested and expected to vest, Aggregate Intrinsic Value	136
Exercisable at the end of the period (in dollars)	$ 186
Weighted Average Remaining Contractual Life (yrs.)
Outstanding at the end of the period (in years)	7 years 9 months 18 days	5 years 7 months 6 days
Vested and expected to vest (in years)	5 years 3 months 18 days
Exercisable at the end of the period (in years)	7 years 9 months 18 days

Share-based Compensation - Rest

Share-based Compensation - Restricted Stock (Details) - Restricted stock - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Stock-based Compensation
Annual forfeiture rate used to calculate compensation expense (as a percent)	6.50%	6.50%
Awards
Non-vested at the beginning of the period (in shares)	1,344
Granted (in shares)	870
Vested (in shares)	(664)
Forfeited (in shares)	(66)
Non-vested at the end of the period (in shares)	1,484
Weighted Average Grant-date Fair Value
Non-vested at the beginning of the period (in dollars per share)	$ 8.70
Granted (in dollars per share)	5.72
Vested (in dollars per share)	8.75
Forfeited (in dollars per share)	9.32
Non-vested at the end of the period (in dollars per share)	$ 6.90
Aggregate Intrinsic Value
Vested	$ 3,798

Share-based Compensation - Perf

Share-based Compensation - Performance-Based Shares (Details) - Performance-Based Shares shares in Thousands	3 Months Ended
	Sep. 30, 2020$ / sharesshares
Stock-based Compensation
Share-based compensation awards vesting period	3 years
Awards
Non-vested at the beginning of the period (in shares) \| shares	204
Granted (in shares) \| shares	339
Performance adjustment (in shares) \| shares	(12)
Non-vested at the end of the period (in shares) \| shares	531
Weighted Average Grant-date Fair Value
Non-vested at the beginning of the period (in dollars per share) \| $ / shares	$ 12.99
Granted (in dollars per share) \| $ / shares	9.22
Performance adjustment (in dollars per share) \| $ / shares	25.58
Non-vested at the end of the period (in dollars per share) \| $ / shares	$ 10.29

Share-based Compensation - Em_2

Share-based Compensation - Employee Stock Purchase Plan (Details) - shares shares in Thousands	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Apr. 01, 2003
Stock-based Compensation
Shares authorized for issuance (in shares)	6,500
Employee Stock Purchase Plan
Stock-based Compensation
Purchase price of stock as percent of market fair value (in percent)	85.00%
Compensation authorized by the employee to be withheld for stock purchase (in percent)	10.00%
Shares authorized for issuance (in shares)			1,100
Shares issued (in shares)	29	29
Cumulative shares issued (in shares)	939

Share-based Compensation - Cost

Share-based Compensation - Cost (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Share-based compensation costs
Share based compensation	$ 3,342	$ 4,459
Tax benefit at statutory rate	752	1,003
Selling, general and administrative
Share-based compensation costs
Share based compensation	2,714	3,635
Research and development
Share-based compensation costs
Share based compensation	155	224
Cost of sales
Share-based compensation costs
Share based compensation	$ 473	$ 600

Employee Benefit Plan (Details)

Employee Benefit Plan (Details) - USD ($) $ in Millions	3 Months Ended
Employee Benefit Plan (Details) - USD ($) $ in Millions	Sep. 30, 2020	Sep. 30, 2019
Employee Benefit Plan
Company matching contributions (as a percent)	50.00%
Maximum company contribution (as a percent)	4.00%
Contributions to the plan	$ 0.5	$ 0.6

Income Taxes - Quarter (Details

Income Taxes - Quarter (Details) - USD ($) $ in Thousands	3 Months Ended
Income Taxes - Quarter (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019	Jun. 30, 2020
Reconciliation of federal statutory rate to effective rate
Federal income tax at statutory rate (as a percent)	35.00%
Income tax expense (benefit)	$ (7,980)	$ 1,787
Effective income tax rate (as a percent)	55.10%	(17.20%)
Unrecognized tax benefits	$ 4,800		$ 4,600
Unrecognized tax benefits that would impact rate	4,700		4,500
Unrecognized tax benefits cumulative interest and penalties recorded	$ 0		$ 0

Related Party Transactions (Det

Related Party Transactions (Details) - Auburn - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Jun. 30, 2020
Related Party Transactions
Sales to related party	$ 0.7	$ 0.7
Accounts receivable related party	$ 0.7		$ 0.7

Assets Held for Sale (Details)

Assets Held for Sale (Details) - USD ($) $ in Thousands	3 Months Ended
Assets Held for Sale (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019	Jun. 30, 2020
Assets Held for Sale
Assets held for sale	$ 2,678		$ 2,678
Disposal group held for sale \| Cody API Restructuring Plan
Assets Held for Sale
Assets held for sale	2,700
Net sales		$ 1,067
Pretax loss attributable to Cody API business	$ (502)	(4,417)
Impairment of the ROU lease asset		$ 1,200

Subsequent Events (Details)

Subsequent Events (Details) - USD ($) $ in Thousands	Oct. 29, 2020	Sep. 30, 2020	Sep. 30, 2019
Subsequent Events
Proceeds from sale of property, plant and equipment		$ 14	$ 6,305
Subsequent Event \| Cody API Restructuring Plan
Subsequent Events
Proceeds from sale of property, plant and equipment	$ 3,800