Full Description

Hi-Tech Pharmacal Co., Inc. (Hi-Tech), incorporated in April 1982, is a specialty manufacturer and marketer of prescription, over-the-counter (OTC) and nutritional products. The Company develops, manufactures and markets products in three categories: generics, prescription brands and OTC brands. It produce a range of products for various disease states, including asthma, bronchial disorders, dermatological disorders, allergies, pain, stomach, oral care, neurological disorders, glaucoma and other conditions. The Company’s generic products are primarily prescription items and include oral solutions and suspensions, topical creams and ointments, as well as nasal sprays. It also specializes in the manufacture of products in its sterile facility capable of producing liquid ophthalmic, otic and inhalation products. Additionally, the Company’s Midlothian Laboratories division, a generic pharmaceutical company specializing in cough and cold products and prescription vitamins operates through a virtual company structure, outsourcing research and development (R&D) and manufacturing, while concentrating on the marketing of generics. The generic product category includes a small amount of contract manufacturing sales for both the prescription and OTC markets.

On February 27, 2009, the Company purchased substantially all of the assets of E. Claiborne Robins Company, Inc. doing business as ECR Pharmaceuticals (ECR Pharmaceuticals or ECR). This subsidiary is engaged in the development and distribution of branded prescription pharmaceuticals. ECR’s products treat various disease states, including cough and cold symptoms, allergies, poison ivy and contact dermatitis, and pain relief. The Company does not manufacture any of ECR’s products. All products are sourced, at ECR’s direction, through contract manufacturers and packagers. All research and development is also conducted through contract organizations.

Hi-Tech’s Health Care Products Division markets a line of OTC branded products primarily for people with diabetes, including Diabetic Tussin, DiabetiDerm, Multi-betic and DiabetiSweet. The division also sells Zostrix brand of capsaisin products for pain associated with arthritis. Its customers include chain drug stores, drug wholesalers, managed care purchasing organizations, certain Federal government agencies, generic distributors, mass merchandisers, and mail-order pharmacies. Some of its customers include McKesson Corporation, Cardinal Health, Inc., AmeriSourceBergen Corporation, CVS, Walgreens and Wal-Mart. During the fiscal year ended April 30, 2009 (fiscal 2009), sales of generic pharmaceuticals including the Company’s Midlothian Laboratories division represented 88% of total sales, sales of the Company’s ECR Pharmaceutical subsidiary were 3% and sales of the Health Care Products line of OTC products accounted for 9% of total sales.

Generic Products

Hi-Tech's five top selling generic products, during fiscal 2009, include Dorzolamide with Timolol and Dorzolamide (the generic equivalents of Cosopt and Trusopt from Merck); Fluticasone propionate (the generic equivalent of Flonase from GlaxoSmithKline); Sulfamethoxazole with Trimethoprim (the generic equivalent of Bactrim from Roche); Pediatric multivitamins with fluoride (the generic equivalent of various brands), and Lactulose (the generic equivalent of various brands). Hi-Tech has prescription products approved for marketing by the United States Food and Drug Administration (FDA) and two products with tentative approvals. In addition, it has 13 products submitted to the FDA pending approval, and approximately 20 products in various stages of development. During fiscal 2009, the Company launched two products: Dorzolamide Hydrochloride with Timolol Maleate Ophthalmic Solution (the generic equivalent of Merck’s Cosopt Ophthalmic solution, indicated for the treatment of glaucoma) and Dorzolamide Hydrochloride Ophthalmic Solution (the generic equivalent of Merck’s Trusopt Ophthalmic solution, indicated for the treatment of glaucoma).

Health Care Products Division

Hi-Tech's Health Care Products Division (HCP) is a marketer of branded products that include over-the-counter, nutritional lines, and prescription products, primarily for people with diabetes. HCP also has several lines that fall outside the diabetic area. The Health Care Products Division is composed of several products lines, which account for a majority of its sales. The top six product lines, in order of sales, are Diabetic Tussin cough products; Zostrix pain relief products; DiabetiDerm dermatological and footcare products; Multibetic multi-vitamins; DiabetiSweet sugar substitutes, and Nasal Ease allergy relief. The Diabetic Tussin line accounted for approximately half of Health Care Products sales.