Judge Rules Fresenius was Right to Terminate Merger With Akorn
The Delaware Court of Chancery on Monday ruled that Fresenius Kabi validly terminated its agreement to merge with Akorn because of data integrity issues at Akorn facilities.“Fresenius’s investigation uncovered serious and pervasive data integrity problems that rendered Akorn’s representations about its regulatory compliance sufficiently inaccurate,” the ruling says.
The court noted that even one of Akorn’s own experts recognized that Akorn was not transparent with the US Food and Drug Administration (FDA).
“It is difficult to put much faith in Akorn’s claims about its commitment to quality. Having seen the divergence between Akorn’s representations to the FDA during the March 2018 meeting and what Akorn’s internal documents and witness testimony showed, it is equally difficult to have confidence that Akorn is being fully transparent in describing the corrective actions,” the court adds.
The decision also notes that John Avellanet of Cerulean Associates, a data integrity consultant, testified that some of Akorn’s data integrity failures “were so fundamental that he would not even expect to see them ‘at a company that made Styrofoam cups,’ let alone a pharmaceutical company manufacturing sterile injectable drugs.”
Fresenius initially gave notice that it was terminating the merger on 22 April, setting off a legal showdown between the two companies.
But the court found Monday that Fresenius “validly terminated” the merger agreement because Akorn’s representations regarding its compliance with regulatory requirements were not true or correct.
Decision