Resigning Akorn CEO Raj Rai To Be Replaced By Douglas Boothe

LAKE FOREST, IL — Akorn announced a replacement for its resigning CEO last week, as the drugmaker wraps up a tough year. Douglas Boothe will take over for the departing Raj Rai, who announced his plans to depart earlier this month after a state supreme court sided against the Lake Forest-based firm, which saw its shares trading Wednesday at prices nearly 90 percent lower than a year earlier.

A planned $4.3 million merger agreement announced last year collapsed after the German health care giant Fresenius pulled out of the deal, citing an investigation into "alleged breaches of FDA data integrity requirements" triggered by anonymous tips. Akorn sued to stop the cancellation of the takeover, claiming any problems were minor and Fresenius was experiencing "buyer's remorse."

In October, Delaware Judge Travis Laster ruled the German firm was within its rights to abandon the deal under the terms of the merger agreement. The case, Akorn Inc. v. Fresenius Kabi AG, was the first time a Delaware trial court found that the purchaser of a company can cancel a pending deal due to a "material adverse change" in the business of its acquisition target. Laster agreed with Frensenius' argument that Akorn executives concealed a variety of problems raising questions about whether its data or profit projections were valid, Bloomberg reported.

Akorn appealed unsuccessfully to the Delaware Supreme Court. After the panel of judges released its three-page order upholding the trial court's ruling, trading on the NASDAQ on Akorn shares was halted as its stock value plunged to its lowest level in eight years, according to Bloomberg. CEO Raj Rai announced he would step down once a successor was named.

Rai joined Akorn in 2009 from another firm owned by the company's former longtime chair, John Kapoor, an ex-billionaire who faces federal charges that he took part in a conspiracy to bribe doctors to prescribe a powerful opioid spray. Kapoor has pleaded not guilty to the charges, which are related to his fentanyl-manufacturing firm Insys, and is due to stand trial next month. A former Insys executive last month pleaded guilty to racketeering and is due to be sentenced in May.

Boothe, Rai's replacement, is a pharmaceutical industry veteran with a track record of producing revenue growth and leading companies "through challenging environments." The firm said it "looks forward to its next phase as an independent company committed to rebuilding shareholder value." Booth has also"reinvigorated research and development, regulatory, compliance and supply chain platforms," Akorn said in a release announcing his hiring.

Chair Alan Weinstein said board members were exciting to welcome Booth to the company at "this pivotal time."

“After a comprehensive search, Doug quickly rose to the top of the list due to his proven track record in helping build businesses, navigate regulatory complexities and guide companies through competitive market environments," Weinstein said in a release.

Boothe was most recently the president of the generics division of Impax Laboratories. The firm was acquired by Amneal Pharmaceuticals in May in a reverse merger transaction, according to the release.

Before that, Boothe was the executive vice president and general manager of Perrigo Company, responsible for its roughly $1 billion U.S. drug business. He has also been CEO of Activis and held senior positions at Alpharma and Pharmacia Corp, Akorn announced.

“I am excited and humbled with the opportunity to lead Akorn and our dedicated employees as we focus our energies toward expanding our offerings to customers, improving our financial performance and enhancing long-term shareholder value,” Booth said.

Related:

• Akorn Chair Resigns, Charged With Bribing To Prescribe Opioids
• Stock Plunges On News Of Akorn Investigation, Frensenius May Walk Away
• Akorn Sues To Stop Fresenius From Escaping Merger Deal