Lannett Company Signs Agreement with Swiss Company, AZAD Pharma AG, to Jointly Develop, Commercialize Products.

PHILADELPHIA -- Lannett Company, Inc. (AMEX:LCI), a manufacturer of generic pharmaceuticals, today announced the signing of a multi-part agreement with AZAD Pharma AG, a corporation based in Toffen, Switzerland, to jointly develop and commercialize one pharmaceutical product and enter into a supply agreement for five Active Pharmaceutical Ingredients (APIs).

Under the terms of the agreement, AZAD will supply certain APIs to Lannett for developing into finished dosage forms and commercializing. The two companies intend to collaborate on a coordinated and continuing basis.

"By partnering with AZAD, Lannett will be able to expand its pipeline with a number of new product candidates," said Arthur Bedrosian, Lannett's president and chief executive officer. "This agreement provides Lannett with an opportunity to add new APIs and dosage forms to our existing product offering."

Bedrosian said the company is pursuing a variety of other strategic relationships with foreign and domestic manufacturers that complement its internal drug development efforts. These initiatives are designed to expand the line of products Lannett offers and help grow future revenue and income.

"This partnership is in line with our strategy to move up the value chain by taking advantage of unique opportunities with well positioned and market oriented companies such as Lannett," said Mike Baronian, AZAD Pharma's chief executive officer.

About AZAD Pharma AG:

AZAD is a leader in the development and supply of complex APIs and global alliances in the world's major markets. AZAD has a complete network comprising a sales and marketing force, Swiss R&D facilities, and international production partners that ensures cutting edge service in the development and supply of quality generic APIs.

About Lannett Company:

Lannett Company, founded in 1942, develops, manufactures, packages, markets and distributes generic pharmaceutical products for a wide range of indications. For more information, visit Lannett Company's website at www.lannett.com.

This news release contains certain forward-looking statements, which express the current beliefs and expectations of management. Such statements are based on current expectations and involve a number of known and unknown risks and uncertainties that could cause Lannett's future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause or contribute to such differences include Lannett's ability to successfully develop products, the impact of competition from brand name companies that sell their own generic products or successfully extend the exclusivity period of their branded products, the availability of product liability coverage in the current insurance market, the impact of pharmaceutical industry regulation and pending legislation that could affect the pharmaceutical industry, the difficulty of predicting U.S. Food and Drug Administration and other regulatory authority approvals, acceptance and demand for new pharmaceutical products and new therapies, uncertainties regarding market acceptance of innovative products newly launches, currently being sold or in development, the impact of restructuring of clients, reliance on strategic alliances, exposure to product liability claims, dependence on patent and other protections for innovative products, fluctuations in currency, exchange and interest rates, operating results and other factors that are discussed in Lannett's Annual Report on Form 10K for its fiscal year ended June 30, 2005 and its other filings with the U.S. Securities and Exchange Commission. Forward-looking statements speak only as of the date on which they are made, and the Company undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.