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ARTHUR BEDROSIAN, CEO ∙ MARTY GALVAN, CFO May 2016 FORWARD-LOOKING STATEMENTS Except for historical facts, the statements in this presentation, as well as oral statements or other written statements made or to be made by Lannett Company, Inc. (the “Company”), are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and involve risks and uncertainties. For example, statements about the expected positive FDA inspection results of the Company’s manufacturing facilities and product approvals, anticipated growth and future operations, the current or expected market size for its products, the success of current or future product offerings, continued relationships with the Company’s suppliers and customers, the research and development efforts, the Company’s ability to file for and obtain U.S. Food and Drug Administration (FDA) approvals for future products, and the Company’s ability to obtain and maintain necessary licenses and permits, are forward-looking statements. Forward-looking statements are merely the Company’s current prediction of future events. The statements are inherently uncertain and actual results could differ materially from the statements made herein. There is no assurance that the Company will achieve the sales levels that will keep its operations profitable or that FDA filings and approvals will be completed and obtained as anticipated. For a description of additional risks and uncertainties, please refer to the Company’s filings with the Securities and Exchange Commission, including its latest Annual Report on Form 10–K and its latest Quarterly Reports on Form 10-Q. The Company assumes no obligation to update its forward-looking statements to reflect new information and developments. Lannett Company Inc. 2 USE OF NON-GAAP FINANCIAL MEASURES This presentation contains references to non-GAAP financial measures, including Adjusted operating income, which are financial measures that are not prepared in conformity with accounting principles generally accepted in the United States (GAAP). Adjusted operating income is adjusted to exclude, among other things, the effects of amortization of purchased intangible assets, acquisition and integration-related expenses, restructuring expenses and other purchase accounting entries, separation expenses, as well as certain other items considered unusual or non-recurring in nature (settlement agreement). We believe that our presentation of non-GAAP financial measures provides useful supplementary information regarding operational performance, because it enhances an investor's overall understanding of the financial results for the Company’s core business. Additionally, it provides a basis for the comparison of the financial results for the Company’s core business between current, past and future periods. A reconciliation of non-GAAP financial measures to the nearest comparable GAAP amounts are contained in the Company’s fiscal 2016 third quarter financial results press release. Non-GAAP financial measures, including Adjusted operating income, should be considered only as a supplement to, and not as a substitute for or as a superior measure to, financial measures prepared in accordance with U.S. GAAP. Lannett Company Inc. 3 U.S. GENERIC PHARMACEUTICAL INDUSTRY • Strong Drivers For Continued Growth Cost: Often 80-85% less than the brand Supply: $81 billion of brand drugs are coming off patent through 2020 Demand: Aging baby boomers will continue to fuel market growth • Account For Over 84% Of Prescriptions* Same active ingredient, dosage form and route of administration as brand Similar safety, efficacy and quality as brand, at a lower price * Per IMS Dec. 2015 Lannett Company Inc. 4 U.S. GENERIC PHARMACEUTICAL INDUSTRY • Product approval process: Abbreviated New Drug Application (ANDA) Generally, no preclinical/clinical data required; need only to demonstrate bioequivalence Less development time, money and risk compared with New Drug Applications (NDA) for brands • Distribution Model Brand products require marketing budgets and investment in sales reps to directly call on physicians/hospitals -- new products need detailing Generics are sold through 3rd party channels including: • • • Wholesaler distributors (McKesson, Cardinal, AmerisourceBergen) Chain drug stores (Walgreens, CVS, RiteAid) Mail-order pharmacies (Express Scripts/Medco, OPTUMRx, Caremark) Lannett Company Inc. 5 LANNETT, AT A GLANCE 102 MARKETED PRODUCTS (~259 SKUs) Lannett Company Inc. 6 LANNETT, AT A GLANCE STRONG RECORD OF REGULATORY COMPLIANCE Lannett Company Inc. 7 LANNETT, AT A GLANCE 31 ANDAs PENDING Lannett Company Inc. 8 LANNETT, AT A GLANCE U.S. FACILITIES Lannett Company Inc. 9 MANAGEMENT TEAM ARTHUR BEDROSIAN, CEO 47 years in industry; 14 at Lannett; Trinity Labs, Pharmeral, Liquipharm, Zenith Labs, PurePac MARTIN GALVAN, CFO 35 years in industry; 4 at Lannett; Viasys Healthcare, Rhone-Poulenc Rorer, Revlon Health Care KEVIN SMITH, SENIOR VP SALES & MARKETING 29 years in industry; 14 at Lannett; Bi-Coastal Pharma, Mova Labs, Sidmak Labs, Purdue ROBERT EHLINGER, VP LOGISTICS, CIO 22 years in industry; 9 at Lannett; MedQuist, Kennedy Health Systems JOHN APT, VP QUALITY 28 years in industry; 1 at Lannett; Teva, Alpharma, RP Scherer MAHENDRA DEDHIYA, VP SCIENTIFIC AFFAIRS 40 years in industry; 1 year at Silarx/Lannett; Forest Labs, Roxane Labs, Bayer, Endo Labs, Wyeth 10 OUR STRENGTHS Talented management across all functional areas: product development, regulatory, manufacturing, compliance, sales, finance Strong customer relationships fostered over many years; business is personal Track record of: Selecting products with high profit potential and manageable competition Getting products approved and maintaining regulatory compliance Stability plus growth: Base generics business represents a solid financial foundation Controlled substances represent area for higher profit margins and growth rates 1 of 2 generic companies vertically integrated from API to finished dosage in opiates Lannett Company Inc. 11 COMBINED SALES MIX BY PRODUCT CATEGORY Based on LTM 6/30/15 net sales Other 14% Thyroid Deficiency 38% Glaucoma 5% Migraine 6% Thyroid Deficiency 19% Other 23% Other 12% CNS 31% Respiratory 8% Urinary 9% Pain 3% Pain 7% CNS 15% Urinary 5% Cardiovascular 13% Cardiovascular 14% Gallstone 16% GI 27% Gallstone 8% Cardiovascular 13% Lannett Company Inc. GI 14% 12 ROBUST PRODUCT PORTFOLIO 32 in development 31 pending approval • Sales of $10.5 billion (brand and generic) LTM Dec. 2015, per IMS 102 marketed Lannett Company Inc. 13 CONTROLLED SUBSTANCE MARKET & GOAL U.S. market: $31 billion in 2015* Generic portion: $16 billion in 2015* High barrier to entry: DEA-required licenses and quotas 1 of 2 generic companies vertically integrated from API to finished dosage in opiates Concentrated Poppy Straw (CPS) = natural raw material from which APIs are extracted Profitability and growth: Current gross margin on controlled substances: 60% 5-year goal: significantly increase production of controlled substances (as a percentage of total net sales) * Per IMS Dec. 2015 Lannett Company Inc. 14 OUT OF ONE … MANY 1 4 9 70 203 PLANT ALKALOIDS APIS PRODUCTS STRENGTHS BRAND NAMES • • • • • • Avinza • Dilaudid • Exalgo • Hycodan • Kadian • Lortab MORPHINE SULFATE 9 products; 56 strengths HYDROMORPHONE MORPHINE CODEINE 7 products; 18 strengths CODEINE PHOSPHATE 20 products; 28 strengths CODEINE SULFATE THEBAINE 1 products; 3 strengths ORIPAVINE 15 products; 42 strengths HYDROCODONE OXYCODONE Opana Oxycontin Percocet Suboxone Vicodin 7 products; 25 strengths BUPRENORPHINE 7 products; 20 strengths OXYMORPHONE 3 products; 10 strengths Lannett Company Inc. 15 VERTICAL INTEGRATION = HIGH MARGINS Vertically Integrated Today: CODY, WYOMING: API Hydromorphone tablets (patented API process) Cocaine HCI topical solution (patented API process) Fully Developed: Morphine Sulfate Near-Term Goal Products: PHILADELPHIA: FINISHED DOSAGE FORM Hydrocodone (patented process) Oxycodone HCI (patented process) Lannett Company Inc. 16 ACQUISITION STRATEGY Evaluate M&A opportunities for both products and companies that are a strategic fit and accretive Expand, complement current portfolio Further vertically integrate operations Seek out acquisition opportunity in a tax favorable jurisdiction Continuing due diligence on other, small-scale acquisition candidates Quickly, efficiently integrate acquisitions to optimize ROI Kremers Urban, acquired Nov 2015, integration on track; Silarx, acquired June 2015, fully integrated as of Dec 2015 Lannett Company Inc. 17 KREMERS URBAN (KU) TRANSACTION HIGHLIGHTS November 2015, completed the acquisition of KU, a wholly owned subsidiary of UCB S.A. Creates a leading specialty pharmaceuticals manufacturer with a diversified portfolio of 18 high-value products proven development and regulatory capabilities, and a successful track record of managing all aspects of Paragraph IV certifications expertise in the development of products that are difficult to formulate or utilize specialized delivery technologies Significant manufacturing capacity of more than 3 billion doses Transaction funded by debt financing and cash on hand $910 million term loans, $250 million senior unsecured notes, $90 million cash on hand, $23 million revolver draw down Methylphenidate Performed additional BE studies which have been submitted to the FDA; currently marketed in the U.S. under BX rating Lannett Company Inc. 18 COST SAVINGS, RESTRUCTURING PLAN February 2016, implemented companywide cost savings and restructuring plan, actions include: Closing KU corporate office in Princeton, NJ Immediate 10% workforce reduction, rising to 20% over next three years Streamlining manufacturing, packaging, distribution Consolidating research and product development functions Cost savings of $27 million in fiscal 2016, $40 million in first 12 months, $65 million by end of fiscal 2020 Aggregate plan costs of approximately $23 million Severance: $14 million Rationalization, consolidation of operations: $8 million Contract termination: $1 million Lannett Company Inc. 19 GROWTH STRATEGY BASE GENERIC PRODUCTS: Commercialize products upon FDA approval Acquire ANDAs and products that meet our expectations for sales potential, barriers to entry, limited competition and gross margin Expand product development partnerships to enhance internal efforts Monitor market for opportunities to increase prices File Paragraph IV challenges for products which meet target metric thresholds CONTROLLED SUBSTANCE PRODUCTS: Become a dominant player and one-stop shop in the U.S. Substantially grow percentage of manufactured products Continue to invest in development of higher margin products Develop novel (proprietary) forms of API delivery Lannett Company Inc. 20 GROWTH STRATEGY (continued) BRAND PRODUCT: C-Topical® Cocaine HCl Requirements for Commercialization: • Currently in Phase III clinical testing • To file NDA to FDA Product Advantages: • Increased number of procedures per day due to faster therapeutic onset • Ease of use - one product versus current therapy of combining two products Potential to provide: • Higher profit margins • New Chemical Entity (NCE) designation = Market Exclusivity Lannett Company Inc. 21 FINANCIALS FINANCIAL DISCUSSION SALES, PROFITABILITY BALANCE SHEET GUIDANCE Lannett Company Inc. 22 STRONG SALES TREND In millions $600 $560* $500 $407 $400 GENERICS $300 $200 CONTROLLED SUBSTANCES $119 $125 $107$123 $151 $100 $12 $0 $274 $25 $43 $64 $45 $64 $83 $72 BRANDS 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Levothyroxine OB-Natal Lannett Company Inc. Morphine Sulfate *Guidance at mid-point on 5/3/2016 23 FISCAL 2015 FULL YEAR In millions NET SALES $420 ADJUSTED OPERATING INCOME* $406.8 $240 $370 $190 $320 $140 $270 $220 GENERICS $273.8 $231.1 $109.6 $90 CONTROLLED SUBSTANCES $40 FY14 FY15 FY14 FY15 Adjusted gross margin up 11 percentage points to 75%. BRANDS *Adjusted operating income excludes the effects of amortization of purchased intangible assets, acquisition-related expenses and other purchase accounting entries, as well as certain other items considered unusual or non-recurring in nature. Lannett Company Inc. 24 FISCAL 2016 THIRD QUARTER In millions NET SALES $180 $163.7 ADJUSTED OPERATING INCOME* $70 $65.2 $54.9 $120 $50 $99.4 $60 $30 $0 $10 Q3-FY15 Q3-FY16 Q3-FY15 Q3-FY16 *Adjusted operating income excludes the effects of amortization of purchased intangible assets, acquisition and integration-related expenses, restructuring expenses and other purchase accounting entries, as well as certain other items considered unusual or nonrecurring in nature (settlement agreement). Lannett Company Inc. 25 FISCAL 2016 FIRST NINE MONTHS In millions NET SALES $410 ADJUSTED OPERATING INCOME* $200 $397.2 $178.2 $182.9 $175 $340 $307.6 $270 $150 $200 $125 9mo-FY15 9mo-FY16 9mo-FY15 9mo-FY16 *Adjusted operating income excludes the effects of amortization of purchased intangible assets, acquisition and integration-related expenses, restructuring expenses and other purchase accounting entries, as well as certain other items considered unusual or nonrecurring in nature (settlement agreement). Lannett Company Inc. 26 STRONG BALANCE SHEET AS OF MARCH 31, 2016 (IN MILLIONS) CASH & INVESTMENTS $ 238 TOTAL ASSETS $1,752 DEBT $1,054 TOTAL LIABILITIES BRANDS $1,205 STOCKHOLDERS’ EQUITY $ 547 Lannett Company Inc. 27 RECENT ACHIEVEMENTS / ONGOING INITIATIVES In April, expanded collaboration with strategic partner to co-develop generic insulin for $21 billion US market In March, met with key customer to re-establish business relationship In calendar 2016, received four product approvals for Potassium Chloride ER Capsules, Sumatriptan Nasal Spray, Temolozomide Capsules February 2016, implemented restructuring plan, $27 million of cost savings in fiscal 2016, $40 million in first 12 months, $65 million by end of fiscal 2020 November 2015, completed acquisition of KU; integration on track Completed integration of Silarx Pharmaceuticals, acquired in June 2015, a leading manufacturer and marketer of liquid generic pharmaceutical products Continue to seek out and evaluate small-scale M&A opportunities for both products and companiesLannett thatCompany are aInc.strategic fit and accretive 28 INVESTMENT HIGHLIGHTS Generics: 84% of new Rxs in the US and growing* Sales Growth: LCI well-positioned for continued growth in multiple categories 49% top-line growth in FY 2015; 65% in Q3-FY 2016 Pipeline: 32 products in development, 31 ANDAs pending at FDA Implemented Restructuring Plan: Cost reductions of $27 million in fiscal 2016, $40 million in first 12 months, $65 million by end of fiscal 2020 RIFs: 10% immediate, 20% by end of year 3 Consolidating manufacturing, packaging, distribution Streamlining research and product development functions Vertical Integration: just beginning to unleash value Barriers to entry and higher gross margins to fuel sales and profits * Per IMS Dec. 2015 Lannett Company Inc. 29 THANK YOU NYSE: LCI ∙ www.Lannett.com