Despite higher sales, Amityville drugmaker Hi-Tech Pharmacal Co. reported a steep drop in third-quarter profits Thursday as its costs increased and competition continued to drive down the price of its prescription nasal spray.
The company's net income fell 45 percent to $5.9 million, or 43 cents per share, during November, December and January from the year-earlier period. Revenue climbed 16 percent, to $64.3 million, driven by strong demand for products to treat coughs, colds and the flu.
"We are very pleased with our record sales this quarter," Hi-Tech Pharmacal president and chief executive David Seltzer said in a statement announcing the results. Investors were less enthusiastic. The company's stock fell 3.7 percent Thursday, to $36.16 per share.
Hi-Tech Pharmacal's drop in profits comes one year after a Mumbai-based drugmaker, Wockhardt Ltd., began selling a generic version of the nasal spray Flonase in the United States, depressing the price of the Long Island company's product. Hi-Tech Pharmacal said it expects the spray's price will continue falling, but the cost of manufacturing it is likely to drop, too.
Hi-Tech Pharmacal's bottom line was also hampered by increased advertising costs for its health care products and legal costs from its generic division.
The company employs about 425 people, including roughly 290 on Long Island. It also has a facility in Richmond, Va.