It was a big December for the Lannett Company.
Within a week, the Northeast-based corporation began trading on the New York Stock Exchange, secured a $50 million bank loan and purchased a large portion of the former Internal Revenue Service processing center on Roosevelt Boulevard.
Exactly which portion remains to be seen, as do the company’s specific plans for the site.
In a notice to the U.S. Securities and Exchange Commission dated Dec. 20, Lannett reported the purchase of two separate parcels for $4 million and $5 million, respectively. Both transactions involved properties in Philadelphia. The notice did not provide addresses.
Since then, a “sold” placard has been posted on a “for sale” sign at the entrance to the former IRS complex at 11601 and 11501 Roosevelt Blvd. The IRS facility previously encompassed more than 52 acres on four adjacent parcels along the Boulevard, along with a fifth parcel about one mile south at the intersection of Blue Grass Road.
A spokesman for Lannett, Robert Jaffe, confirmed last week that the company had bought two of the former IRS parcels, but did not specify which ones. Lannett intends to redevelop the properties for manufacturing, product development and warehousing, Jaffe said. The company has not declared a timetable.
Lannett manufactures and distributes generic medications. Founded in 1942, the company is based at 13200 Townsend Road and owns other facilities at 9000 State Road and 9001 Torresdale Ave. Together, those properties cover almost 14 acres and feature 160,000 square feet of operating space.
Most of the former IRS processing center has remained idle, with its future use uncertain, since the government agency vacated the site in March 2011. The IRS had leased the properties from private owners for decades, but began moving its operations, including some 5,000 employees, to the former 30th Street Post Office in late 2010.
City property records at the time showed various owners for the five vacated parcels, notably an investment partnership controlled by a publicly traded corporation known principally for developing and operating shopping centers.
The Philadelphia Industrial Development Corporation and City Councilman Brian O’Neill strongly opposed any retail conversions for the industrially zoned IRS site. PIDC was the original developer of the site and initiated a deed restriction regulating zoning changes. O’Neill’s 10th Councilmanic District includes the properties.
PIDC and O’Neill have cited studies indicating that industrial uses generally create more jobs that pay better and offer better benefits packages than retail uses do.
In April 2012, Fraternal Order of Police Lodge 5 purchased one of the five parcels, a 3.5-acre property at the rear of the site, for about $2 million. The FOP spent additional millions to redevelop an existing building on the property, which has access via Caroline Road. Last February, the city’s police union opened its headquarters there with offices, a lounge/nightclub and a catering hall, among other uses.
Lannett’s latest acquisitions appear to indicate the company’s intention to remain in Northeast Philadelphia and expand here. The company’s website describes its 66,000-square-foot Townsend Road headquarters as a “recent purchase.”
On Dec. 13, Lannett began trading on the New York Stock Exchange after transitioning from the NYSE MKT exchange (the former American Stock Exchange). Company president and CEO Arthur Bedrosian rang the opening bell. Lannett now trades under the ticker symbol LCI.
On Dec. 19, Lannett announced that it had established a five-year, $50 million revolving credit line with a syndicate of two lenders, Citibank, N.A. and PNC Bank, National Association.
“This credit facility supports our plans for continued growth and provides additional capital for potential acquisitions,” Bedrosian said.
In November, Lannett reported record net sales for the company’s fiscal 2014 first quarter. Sales rose 30 percent to $45.8 million for the period concluding Sept. 30, according to the Wall Street Journal. For the full year fiscal 2013, Lannett reported net sales of $151.1 million compared to $123 million for fiscal 2012, with gross profit increasing to $57.4 million from $38.9 million. ••
