Amityville-based drugmaker Hi-Tech Pharmacal Co. became one of Long Island's fastest growing companies in recent years by siphoning sales from its competitors. Now the generics firm is getting a taste of its own medicine.
Hi-Tech's shares plunged 15.61 percent Tuesday to $35.31 after Indian drugmaker Wockhardt received regulatory approval to sell its own generic version of the nasal spray Flonase in the United States.
Hi-Tech's Flonase generic, fluticasone propionate, has driven growth for the company, generating $23 million in revenue in the August-October quarter last year, or 40 percent of total sales. Now that product faces new risk. Some analysts warned Hi-Tech may have become too reliant on fluticasone, which is a copy of the branded nasal spray developed by U.K. drugmaker GlaxoSmithKline.
Company officials did not immediately respond to requests for comment.
Analyst Randall Stanicky, of Canaccord Genuity in Manhattan, said it's unclear how much market share Wockhardt could capture. The key, Stanicky said, will be how aggressively Wockhardt uses "pricing to gain share and win new customers."
Two other drug firms -- Canadian firm Apotex Inc. and Roxane Laboratories of Columbus, Ohio -- also make Flonase generics.
Hi-Tech gained market share, and tens of millions in sales, after Apotex recalled thousands of bottles of the medicine in March 2010 due to contamination. Hi-Tech's sales of fluticasone surged to $73.8 million in the year ended April 30, 2011, from just $13.8 million the year before. The company's overall sales increased 20 percent in that period.