Judge OKs Fresenius Backing Out of Akorn Acquisition

A Delaware judge sided with

Although Akorn intends to appeal the decision, we think this ruling creates even more doubt regarding the company’s ability to uphold the original merger agreement. We’re therefore comfortable removing the effect of the deal on our assumptions for both companies. Furthermore, we think this event--especially with known concerns about the company's operating practices--will make it difficult for Akorn to find other potential buyers. While we long expected Akorn to be a takeout target, we think recent challenges in the generic drug industry will slow generic drug manufacturer consolidation as well as diminish the appeal of certain complex generic categories. We imagine Akorn will struggle as a stand-alone entity even though it is arguably still better positioned than some peers.

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