Fresenius wins case over terminating merger with Akorn due to data-integrity issues

By PharmaCompass

2018-10-04

Impressions: 86 Article

This week, German drugmaker Fresenius Kabi won a case in the Delaware Court of Chancery. The court upheld Fresenius’ decision to terminate its agreement to merge with Akorn because of data integrity issues at the latter’s facilities.

“Fresenius’s investigation uncovered serious and pervasive data integrity problems that rendered Akorn’s representations about its regulatory compliance sufficiently inaccurate,” the ruling said.

Back in April 2017, Fresenius had agreed to acquire Akorn, a manufacturer and marketer of prescription and over-the-counter pharmaceutical products based in the US, for approximately US$ 4.3 billion. The transaction was expected to close in early 2018.

In March this year, Fresenius’ CEO Stephan Sturm had said that the company may back out of its planned acquisition of Akorn if an independent probe into data integrity at Akorn yields evidence of wrongdoing.

And in April this year, Fresenius abandoned the deal. In a court filing that had been made public, Fresenius alleged that its investigation uncovered “blatant fraud at the very top level of Akorn’s executive team, stunning evidence of blatant and pervasive data integrity violations.”

One of Akorn’s own experts said Akorn was not fully transparent with the FDA, the court noted.

“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 added.

The decision also noted 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.”

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