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Fresenius says Akorn investigation could affect takeover

External ‘experts’ are investigating alleged breaches of data integrity requirements

Fresenius

Fresenius Kabi says its $4.3bn deal to acquire US generic drugmaker Akorn Pharma could be scuppered by an FDA probe of the generic drug manufacturer.

The company says it is conducting an independent investigation - using external experts - into “alleged breaches of FDA data integrity requirements relating to product development at Akorn”. On the basis of those findings it will then take a decision on whether to proceed with the deal, which was agreed last April.

“The consummation of the transaction may be affected if the closing conditions under the merger agreement are not met,” said Fresenius in a statement appearing in its fourth quarter results announcement.

Neither company is giving any more information just yet, but Fresenius did say it was continuing to seek Federal Trade Commission (FTC) approval for the takeover, which is designed to boost its position in sterile injectables whilst also adding capabilities in other categories such as ophthalmic, respiratory and intranasal drugs.

Akorn put out its own statement about the FDA investigation saying: “Akorn and Fresenius Kabi, with the assistance of outside consultants, are investigating alleged breaches of FDA data integrity requirements relating to product development at the company.”

“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,” it continued.

Akorn’s business suffered something of a downturn since Fresenius made its offer, with net revenues in the first nine months coming in at $655m, down from $833m in the same period of 2016, with the declines all coming from the prescription pharma business. Sales for Akorn’s small consumer health business stayed fairly constant at a little under $50m in the nine-month period.

The revenue decline came in part because Akorn lost patent protection for ephedrine sulfate injection and lidocaine ointment products, but it has also suffered supply disruptions after the FDA found problems at facilities in Indian and Decatur, Illinois.

Article by
Phil Taylor

28th February 2018

From: Sales

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