Akorn

Akorn is the American producer of generic medicines (medicine-generics). Such means differ in the fact that after the termination of validity period of patent protection on active agent the last stops being exclusive property of the pharmaceutical company which developed it or owned the initial license for substance implementation.

2020: Declaration of bankruptcy

On May 23, 2020 Zdrav.Expert became known that the Akorn company declared bankruptcy according to Chapter 11 of the Code of laws of the USA about bankruptcy. One of the reasons of steel of a problem with quality control of products.

Bankruptcy became the only exit for Akorn company (Akorn) after the German Fresenius refused its purchase in 2018 and it it was not succeeded to find other buyer for the assets.

Stocks of the company dropped by 35%.

According to the chief financial officer of Akorn Dwayne Portvud, failure of the German company, production problems and need of service of debt obligations resulted in impossibility of settlement of problems extrajudicially.

He noted that Akorn continued search of potential buyers, but by April, 2020 did not receive any offer allowing the company to fulfill debt obligations which amount, according to the statement for bankruptcy, is 10 billion dollars. The company estimates the assets also at 10 billion dollars.

The company reached the agreement from 75% of creditors on secured liabilities which will act as buyers of company assets. Besides, these creditors will provide additional liquid resources for ensuring activity of Akorn in sales process.

The company does not show two years profit. In 2018 its loss made 310 million dollars. In 2019 the Fresenius company left the transaction on acquisition of Akorn for 4.3 billion dollars, having motivated it with the fact that the American company did not satisfy a number of the conditions necessary for completion of the transaction, in particular, considerable violations in accomplishment of the requirement of FDA for integrity of data on activity of Akorn at the enterprises in New Jersey and Illinois were revealed.

The American court supported Fresenius therefore the chief executive of Akorn Raj Ry resigned^[1].

2019: FDA called "inadequate" investigation of the reasons of release of Akorn of low-quality medicines

On July 12, 2019 it became known that FDA was published by the written warning sent to Akorn company (Akorn) in which cases of inadequate investigation of the reasons of release of low-quality series of medicines are in detail described and also it is specified that in the company there is no control of data and technologies of aseptic production are not used.

The CEO of Akorn Douglas But suggested to develop and implement "the all-corporate action plan" for ensuring the coordinated work and efficiency of all systems used in the company.

In written warning of FDA it is mentioned that ensuring the coordinated work is especially important point in the solution of production problems. The regulator noted also that many investigations continue more than 6 months, and some – over a year.

The regulator called such investigations "inadequate and incomplete", not allowing to draw "evidence-based conclusions".

FDA gave an example of "inadequate" investigation of the reasons of the analysis results of osmolality which are not meeting the specification revealed during a 18-month research of stability of ophthalmologic ketorolac tromethamine solution of 0.5%.

In the letter it is specified that Akorn considers this phenomenon single and that in connection with the specified medicine no complaints arrived. However,

"we detected several complaints, the received Akorn in connection with the empty or proceeding packagings of medicines which batches were packed into the corresponding bottles", said in the letter of the regulator.

In the precautionary letter of FDA it is also specified that the supplier of bottles informed Akorn that bottles could be damaged during an insert of tips on a filling line; however, in Akorn could not carry out the "significant" assessment of this and other potential reasons of violations in work of a production line.

In addition to the above, the fact that in the company could not provide access only for authorized employees to production schedules and protocols of control of series is also especially highlighted in the e-mail of FDA. Inspectors noted also the fact that the staff of the company does not perform the procedures of aseptic production developed for prevention of microbic infection of sterile dosage forms.

It already the second letter warning received by Akorn from FDA in 2019.

The production problems designated in both letters became a basic reason on which in 2018 the company merger of Fresenius (Frezenius) did not take place and^[2].

2018: Failure of Fresenius Kabi from the transaction with Akorn

On April 23, 2018 it became known of the solution of the German pharmaceutical company Fresenius Kabi to cancel the planned acquisition of Akorn for $4.3 billion. The failure from the transaction in Fresenius Kabi was explained non-performance by the American pharmaceutical company of a number of the conditions necessary for completion of acquisition. The agreement on acquisition of April, 2017 provides payment payment of the commission at its termination in the amount of $129 million.

Fresenius Kabi refused to buy Akorn because of failure to meet requirements

In particular, according to Fresenius Kabi, considerable violations in accomplishment of the requirement of FDA in the field of integrity of data on Akorn activity were revealed.

Fresenius Kabi made independent investigation concerning possible violations of integrity of information in the field of product development in Akorn and at the beginning of 2018 warned the American company that the transaction can appear under the threat.

According to Fresenius, the company had an opportunity to postpone the decision on the termination of the transaction with the purpose to give Akorn time to complete own investigation and to report its results, however in the American company refused such offer.

Meanwhile, in Akorn expressed complete disagreement with Fresenius Kabi position, having expressed the intention to take measures for protection of the rights and to oblige the German company to satisfy terms of agreement about acquisition. In the statement representatives of Akorn also emphasized that the investigation made by Fresenius is not a condition for completion of the transaction.^[3]

2017:  Fresenius Kabi buys Akorn for $4.3 billion

In April, 2017 the German pharmaceutical company Fresenius Kabi announced purchase of Akorn for $4.3 billion. It is going to close the transaction by the beginning of 2018.

The cost of purchase of Akorn counting on one stock of the company is $34. Besides, under the terms of the agreement, Fresenius Kabi will undertake debts in $450 million the absorbed company. As a result purchase will cost Fresenius Kabi $4.75 billion Fresenius Kabi hope that the transaction will begin to make profit for the company in 2018.

Office of Akorn company

As a result of merger of Akorn the Fresenius Kabi company will be able to strengthen positions in the American market where at Akorn cooperation with a large number of drugstores, outpatient clinics and hospitals is set up. Akorn will add division on production of medicines which specializes in intravenous medicines.

The largest shareholder of Akorn John Kapoor owning the fourth part in capital stock of the company supported the transaction. Accession of business will allow Fresenius Kabi to save annually about $100 million, Bloomberg with reference to a joint statement of the companies reports.

At the same time Fresenius Kabi announced purchase of business on development of biosimilyar at the German company Merck KGaA for 170 million euros. The arrangement also assumes that Merck will receive up to 500 million euros in the form of step-by-step payments and a royalty from sales. Closing of the transaction is planned on the second half of 2017.

Fresenius is going to invest 1.4 billion euros in clinical trials of biosimilyar.^[4]

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