The Perrigo Company announced that it has filed a Schedule 13D with the Securities and Exchange Commission relating to an option to purchase a controlling interest in Lannett Company, Inc., a manufacturer of generic pharmaceuticals.

On February 4, 2004, William Farber, CEO of Lannett, and his wife Audrey, granted Perrigo an irrevocable option to acquire 13,581,629 shares of Lannett stock, representing approximately 67 per cent of Lannett’s outstanding common shares. If Perrigo exercises the option, the Farbers will receive a cash payment of approximately $197.8 million, or approximately $14.56 per share, plus contingent additional consideration. Should Perrigo choose to exercise the option it will become obligated, within 90 days after acquiring the Farbers’ shares, to offer to the remaining shareholders, through either a tender offer or a merger agreement, the higher of $17.84 per share or the total amount per share paid to the Farbers including additional consideration, if any. The option expires on August 6, 2004.

Commenting on the option and the possibility of acquiring a controlling interest in Lannett, David Gibbons, Perrigo CEO, said, “This potential acquisition, which we would expect to be either neutral or accretive to earnings in the first year, is consistent with our previously announced strategy to enter the generic prescription drug market. Perrigo’s drug development capabilities, retailer relationships and manufacturing assets, if combined with Lannett’s product portfolio, pipeline and complementary marketing channels, would give Perrigo an earlier product pipeline and accelerate our entry into the generic drug market.”

Perrigo Company is the nation's largest manufacturer of over-the-counter (nonprescription) pharmaceutical and nutritional products sold by supermarket, drug, and mass merchandise chains under their own labels.