Akorn CEO resigns after $4.3bn Fresenius deal falls through

The CEO of American generics firm Akorn Inc has stepped down following a ruling from the Delaware Supreme Court declaring that a rapid downturn in Akorn’s business was reason enough for German company Fresenius to walk away from a $4.3 billion dollar acquisition.

Akorn announced that the CEO of the Illinois-based firm, Raj Rai was retiring from his position following the Delaware court’s decision.  Shares in Akorn fell by as much as 37%, while trading was temporarily suspended after the appeals court issued its three page ruling. Rai will remain in his post until a successor is named.

Fresenius pulled out of the deal over concerns that Akorn would not meet profit projections. The German firms decision was however settled after an anonymous whistle-blower raised concerns as to a longstanding pattern of problems in Akorn’s drug-development and manufacturing systems.  

Board chairman Alan Weinstein commented: “We recognise that this has been an extended period of uncertainty for Akorn's customers, employees and investors and the board is committed to ensuring the company’s stability and long-term growth.”

Piper Jaffray analyst, David Amsellem commented on Rai’s resignation in suggesting that Akorn, “could benefit from a new leadership team that is better versed in manufacturing operations and generics R&D.”

Matthias Link, a spokesman for Fresenius suggested that the ruling was “very welcome.”

Louis Goss