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Aceto says profits drop 90% as competition forces prices down

Aceto Corp. headquarters in Port Washington.

Aceto Corp. headquarters in Port Washington. Credit: Barry Sloan

Aceto Corp., the Port Washington-based drugmaker, saw its profit drop 90 percent in the July-September period compared with a year earlier as its generic drugs faced increased competition in the marketplace.

The company said Thursday its profit totaled $500,000 in the quarter, down from $4.4 million in July-September 2016.

Sales rose 45 percent to $128 million, year over year.

CEO William C. Kennally III said the company was forced to charge lower prices for some of the drugs made by its Rising Pharmaceuticals division, and drugs acquired from Citron and Lucid in New Jersey are less profitable.

“Pricing pressure . . . contributed to a contraction in segment profitability,” he said in a statement.

Kennally said Aceto still plans to introduce 15 to 20 products in 2017-18, though the rollouts will be slower than anticipated due to “technical challenges.”

He also said Aceto and other drugmakers face “a prolonged generics industry downturn,” leading Aceto to lower its estimates of profit and sales in 2017-18.

Kennally became CEO in October after the abrupt resignation of Salvatore Guccione, who had been CEO since 2013 and company president since 2011.

Guccione’s departure came after Aceto’s stock fell 29 percent on Aug. 25, after the company reported a profit of $2 million in the April-June period, down 71 percent from a year earlier.

Thursday’s earnings announcement came after the stock market close. In early- evening after-hours trading on the Nasdaq stock market, Aceto shares were down $1.18, or 13 percent, to $8.05. They are down more than 50 percent in the past 12 months.

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