Diplomat Pharmacy says it has 'significant doubt' it will remain afloat as losses grow

Flint, Mich.-based Diplomat Pharmacy said it has "substantial doubt" it can stay in business as it reported significant net losses Nov. 12.

The company reported a net loss of $177 million and says it likely won't be able to stay afloat without potentially selling the company by the end of the year. After its third-quarter earnings report was released, its stock lost more than half its value.

Diplomat said there has been "interest in both the whole company and its businesses" and said it is in "advanced discussions."

The company gave itself a Dec. 31 deadline to figure out a new business strategy, or it would violate terms with its creditors and give lenders the right to stop financing.

However, the company noted, "our mitigation plans are reliant on third parties and beyond our control, and therefore accounting rules do not permit us to conclude that it is probable that any of these alternatives will be effectively implemented prior to any such covenant violation."

The company said it expects its net loss will be between $368 million and $361 million, compared to a previous estimate of between $201 million and $191 million.

It attributed part of the reason for its financial struggles to the fact that it could not renew a contract with one of its largest payers.

Read the full news release here.

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