Akorn Accused of Sending Phony Data to FDA on Antibiotic

Subscribe to Bloomberg | Quint
The Daily Newsletter
News & Stock Alerts

(Bloomberg) -- Akorn Inc. officials allegedly submitted phony data to regulators about an antibiotic drug, prompting Fresenius SE to pull out of a $4.3 billion buyout of the generic drugmaker.

An investigation tied to the deal found an Akorn executive “knowingly directed the submission of fraudulent testing data’’ about the company’s azithromycin product to the U.S. Food and Drug Administration in 2012, Fresenius said Wednesday in documents unsealed in Delaware Chancery Court.

Akorn has argued Fresenius wrongfully pulled out of the deal because of buyer’s remorse -- not any findings that its officials had misled regulators about product-development practices. Akorn didn’t immediately respond to calls or an email seeking comment on the latest filing.

Akorn’s shares fell $1.24, or 8.3 percent, in Nasdaq trading at 10:32 a.m. It was down as much as 8.9 percent, the biggest intraday drop since April 23. Fresenius rose 1.78 euros, or 2.8 percent in Frankfurt.

Akorn is asking Delaware Chancery Judge Travis Laster to bar Fresenius from walking away from the deal or attempting to sabotage efforts to secure antitrust clearance for the merger. Laster will consider Akorn’s request to fast track its lawsuit over the deal later Wednesday.

Fresenius is seeking the judge’s approval allowing it to walk away from the deal and award it damages for Akorn’s for violations of the merger agreement, according to the filing. Lawyers for Fresenius, based in Bad Homburg, Germany, also noted Akorn could face criminal liability for patient injuries or deaths tied to defects in its azithromycin antibiotic.

The case is Akorn Inc. v. Fresenius Kabi AG, No. 2018-0300, Delaware Chancery Court (Wilmington).

©2018 Bloomberg L.P.

Bloomberg
Stay Updated With Business News News On BloombergQuint
Subscribe to Bloomberg | Quint
The Daily Newsletter
News & Stock Alerts