Akorn Stock Plunges On News Of Investigation, Buyer May Walk Away

LAKE FOREST, IL — News of an investigation into possible violations of Food and Drug Administration data integrity rules at Akorn, Inc. sent shares of the Lake Forest-based generic drugmaker tumbling nearly 40 percent during trading Monday and Tuesday. Investors worried the probe might threatened a planned takeover, which still awaits clearance from regulators.

Both Akorn and its prospective buyer said an investigation was underway into "alleged breaches of FDA data integrity requirements" connected to Akorn's product development. The investigation is being conducted with outside consultants, according to the companies.

The German healthcare giant Fresenius announced plans to purchase Akorn for $4.3 billion plus about $450 million in debt last year. The deal was overwhelmingly approved by Akorn's shareholders and had been due to close in April.

Fresenius said its supervisory board will evaluate the findings of the investigation, which may affect the deal.

"The consummation of the transaction may be affected if the closing conditions under the merger agreement are not met," the company said in a statement announcing record earnings in 2017.

Monday night, Akorn said the deal was still on.

"To date, the Company’s investigation has not found any facts that would result in a material impact on Akorn’s operations and the Company does not believe this investigation should affect the closing of the transaction with Fresenius," Akorn said in a statement.

Stephan Sturm, CEO of Fresenius, said Tuesday it was "much too early" to speculate about the investigation, which he said was triggered by anonymous tips. He said the probe is expected to take weeks rather than months, according to Dow Jones Newswires.

Both companies said they do not intend to provide any further updates during the course of the investigation.

According to Reuters, Akorn has suffered from competition and supply disruption and Fresenius previously projected the firm's weakness to continue into 2018.

The German company has said the acquisition would allow the company to offer a wider selection of pharmaceuticals to pharmacies and hospitals.

Related:

• European Medical Giant In Talks To Buy Lake Forest Drugmaker
• Lake Forest Drugmaker Sold For $4.3 Billion To European Giant
• Akorn Chair Resigns, Charged With Bribing To Prescribe Opioids