After years of navigating regulatory woes and financial troubles, Akorn Pharmaceuticals is calling it quits.
The company has filed for chapter 7 bankruptcy and is shutting down U.S. operations, according to a letter posted by the Herald & Review in Illinois.
In Decatur, Ill., the company is shutting a plant and laying off 400 workers, angering local and national representatives. But the problems stretch beyond that plant, according to the letter from Akorn CEO Douglas Boothe.
Akorn has been trying to sell itself since last year, but it did not receive an "appropriate bid," Boothe wrote to employees. Since Akorn has been "running at a loss for some time," the company was unable to secure financing to continue operations.
As of Thursday, all Akorn U.S. sites will close and all employees will be terminated, Boothe wrote to employees.
“I truly regret that these actions have become necessary,” Booth said in the letter. “This is a shock. It will take some time to absorb the news and what it means to you and your colleagues.”
For the last few years, Akorn has been working through serious troubles.
Things started to go downhill for the company in 2018. After Fresenius bailed on a planned $4.3 billion Akorn buyout because of data integrity concerns, the two duked it out in court.
The court battle was not pretty, with Fresenius alleging “blatant fraud at the very top level” of Akron’s executive team. A Delaware judge eventually sided with Fresenius, allowing the company to walk away from the deal.
A litany of FDA warning letters, citations and Form 483’s came next in Akorn's downfall. It seems that the data issues that made Fresenius run were deeply embedded in the company, as the FDA cited some of the same problems in a 2019 warning letter.
By 2020, Akorn needed a new strategy to keep afloat. The company declared chapter 11 bankruptcy that May in an attempt to sell itself to creditors.
It still couldn’t shake its financial problems, and the company took another hit last September when it settled claims that it violated the False Claims Act, settling the case for $7.9 million. That same year, Akorn laid off 240 workers at its Somerset, New Jersey, manufacturing plant.
Akorn did not immediately respond to Fierce Pharma's request for comment.