Akorn once again tried and failed to salvage its $4.3 billion merger with Fresenius. Delaware's top court ruled that Fresenius had nixed the deal legally after data problems cropped up, and in the wake of the decision, Akorn's CEO made his exit.
Only days after lawyers for Akorn and Fresenius argued in Delaware Supreme Court, the justices backed a lower court's decision in Fresenius' favor. With the ruling, Akorn CEO Raj Rai said he would step down.
The decision follows months of legal back-and-forth over the $4.3 billion deal inked last year. Fresenius agreed to pay $34 per share for the company, but after an investigation turned up data integrity problems at Akorn, Fresenius backed out. Akorn's shares have fallen more than 85% since February.
Akorn sued to save the deal, and after a lower court ruled for Fresenius in October, appealed to Delaware's top court. Last week, Akorn lawyers contended that Fresenius knew the risks of the buyout and should be forced to proceed. Fresenius’ attorney pushed back, saying investigators found more problems at every turn at Akorn.
With the court’s decision, Akorn will forge ahead as an independent company; the drugmaker said Rai is retiring and will stay with the company until it can find a successor.
Akorn Chairman Alan Weinstein said the company recognizes “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.”
Amid the legal battle, Akorn's share price has tumbled to about $4.25, from about $33 last year.
When Fresenius struck the buyout, it touted the acquisition as a “strategically complementary combination” that would diversify its portfolio and expand its sterile manufacturing capacity. The buy would add three U.S. manufacturing sites to Fresenius' network, plus another in India, and about 2,000 employees.