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Hi-Tech Pharmacal sees 87% drop in quarterly profit
Hi-Tech Pharmacal reported Tuesday that its profit for the August-October period fell 87 percent compared with a year earlier, after setting aside $9.5 million for a possible settlement of a pricing investigation in Texas.
The Amityville-based manufacturer of generic and brand-name drugs said profit for the quarter ended Oct. 31 was $1.2 million compared with $8.9 million in 2012.
Sales rose 2 percent in the three-month period to $58.6 million compared with a year ago. Hi-Tech's signature product, Fluticasone nasal spray, slumped in the quarter but sales were higher of Lidocaine ointment year over year.
The company said in a news release that it "increased its accrual in connection with the investigation by the Texas Health and Human Services Commission" by $9.5 million "based on current information and discussions with the state of Texas." Texas officials are probing the drug prices paid by Medicaid.
The earnings report was released before Tuesday's stock market opening. In early trading, Hi-Tech shares were up 2 cents at $43.42 shares because the company's earnings performance beat stock analysts' estimates.
Next week, Hi-Tech shareholders will vote on the sale of the company to drugmaker Akorn Inc. If approved, the transaction is expected to close next year, officials said Tuesday.