Profile: Hi-Tech Pharmacal Co Inc (HITK.O)

Hi-Tech Pharmacal Co., Inc. (Hi-Tech), incorporated on August 1, 1996, is a specialty manufacturer and marketer of prescription, over-the-counter (OTC) and nutritional products. Hi-Tech develops, manufactures and markets products in three categories: generics, prescription brands and OTC brands. The Company produces a range of products for various disease states, including glaucoma, asthma, bronchial disorders, dermatological disorders, allergies, pain, stomach, oral care and other conditions. Its generic products are primarily prescription items and include oral solutions and suspensions, topical creams and ointments, as well as nasal sprays. It also specializes in the manufacture of products in its sterile facility capable of producing liquid ophthalmic, otic and inhalation products. The generic product category includes a small amount of contract manufacturing sales for both the prescription and OTC markets. On May 9, 2011, the Company divested the Midlothian Laboratories division. Hi-Tech retained marketing and distribution rights to generic buprenorphine sublingual tablets, an Abbreviated New Drug Application (ANDA) that is filed with the Food & Drug Administration (FDA), an ANDA that is in development and a royalty stream. In January 2012, the Company acquired marketing and distribution rights to a topical wound gel product from Glycobiosciences, Inc. In March 2012, the Company acquired several homeopathic branded nasal spray products, including Sinus Buster and Allergy Buster from Dynova Laboratories, Inc.

The Company’s Health Care Products Division (HCP) markets a line of OTC branded products primarily for people with diabetes, including Diabetic Tussin, DiabetiDerm, Multi-betic, Mag-Ox, Choice DM and DiabetiSweet. The division also sells the Zostrix brand of capsaicin products for pain management of conditions, including arthritis and diabetic foot pain. In addition, HCP markets Nasal Ease homeopathic allergy reliever. Its customers include chain drug stores, drug wholesalers, managed care purchasing organizations, certain Federal Government agencies, generic distributors, mass merchandisers, and mail-order pharmacies. Some of its customers include McKesson Corporation, Walgreens, Cardinal Health, Inc., AmeriSourceBergen Corporation, CVS and Medco. During the fiscal year ended April 30, 2012 (fiscal 2012), sales of generic pharmaceuticals represented 86% of total sales, sales of the Company’s ECR Pharmaceutical subsidiary were 6% and sales of the Health Care Products line of OTC products accounted for 8% of total sales.

Generic Products

During the fiscal 2012, Hi-Tech's five selling generic products include Fluticasone propionate (the generic equivalent of Flonase from GlaxoSmithKline); Dorzolamide with Timolol and Dorzolamide (the generic equivalents of Cosopt and Trusopt from Merck); Sulfamethoxazole with Trimethoprim (the generic equivalent of Bactrim from Roche); Lidocaine and Prilocaine Cream (the generic equivalent of EMLA from APP), and Lactulose (the generic equivalent of Sanofi-Aventis Chronulac and Cephulac). The Company has 55 prescription products approved for marketing by the United States Food and Drug Administration (FDA) and one products with tentative approval. In addition, it has 14 products submitted to the FDA pending approval, including one product, mesalamine, filed by another company in which the Company has a 45% financial interest and approximately 20 products in various stages of development. During fiscal 2012, the Company launched Ranitidine Syrup, Lidocaine HCL Jelly 2%, Nystatin Oral Solution and Lidocaine 5% Ointment.

Health Care Products Division

Hi-Tech's HCP is a marketer of OTC branded products that include over-the-counter medications, nutritional products, cosmetics and medical devices, primarily for people with diabetes. HCP also has several lines that fall outside the diabetes area in pain management and allergy products. The Health Care Products Division is composed of several product lines which account for a majority of its sales. The Company’s five products line include Diabetic Tussin cough products, Mag-Ox magnesium supplement, Zostrix pain relief products, Multibetic multi-vitamins and DiabetiDerm dermatological and footcare products. The Diabetic Tussin line accounted for over one third of Health Care Products sales.