NEW YORK (AP) — Shares of Lannett dropped sharply in premarket trading Friday as the maker of generic pharmaceutical products announced plans for a proposed public stock offering.
The company said Thursday that it and certain selling stockholders are planning to offer the shares. It did not disclose how many shares are expected in the offering.
Lannett Co., based in Philadelphia, said that it plans to use the offering's net proceeds for general corporate purposes, such as research and development, general and administrative, manufacturing and marketing expenses and for potential acquisitions. It won't receive any proceeds from shares sold by the selling stockholders.
A public stock offering increases a company's outstanding shares, which dilutes the value of existing shares held by stockholders.
Lannett's stock declined $2.43, or 11.6 percent, to $18.50 before the market open. That is 21 percent below their 52-week high of $23.42 set on Wednesday.