Akorn Announces New Extension of Standstill with Lenders and Agrees to Pursue a Sale of its Business
LAKE FOREST, Ill., Feb. 12, 2020 /PRNewswire/ -- Akorn, Inc. (Nasdaq: AKRX), a leading specialty pharmaceutical company, today announced it has reached an agreement with certain of its lenders to extend the standstill period. The agreement defines a path forward and outlines milestones to execute a sale of Akorn's business, potentially using Chapter 11 protection in order to address Akorn's litigation-related overhangs and execute a transaction that maximizes value.
Doug Boothe, Akorn's President and Chief Executive Officer, commented, "Akorn is a fundamentally strong business with exciting opportunities ahead. Our efforts to stabilize and strengthen our business have already achieved meaningful results. The decision to pursue a sale of the Company gives Akorn the opportunity to address its capital structure and litigation-related overhangs by seeking a new owner that will continue to invest in our business and future growth. I believe that this decisive action is the right path for our business and will deliver greater financial security in the long term."
The Company plans to continue to operate as usual throughout the sale process, including delivering safe and effective pharmaceutical products to customers and fulfilling contractual obligations, including payments to vendors.
A copy of the amendment was filed with the SEC on the Company's Form 8-K today.
Akorn, Inc. is a specialty pharmaceutical company engaged in the development, manufacture and marketing of multisource and branded pharmaceuticals. Akorn has manufacturing facilities located in Decatur, Illinois; Somerset, New Jersey; Amityville, New York; Hettlingen, Switzerland and Paonta Sahib, India that manufacture ophthalmic, injectable and specialty sterile and non-sterile pharmaceuticals. Additional information is available on Akorn's website at www.akorn.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements, including statements regarding a path and milestones for executing a sale of Akorn's business, potential Chapter 11 protection, addressing litigation-related overhangs, maximization of value, investment in the business and future growth, greater financial security in the long-term, continuing to operate as usual throughout the sale. When used in this document, the words "will," "target," "expect," "continue," "believe," "seek, "anticipate," "estimate," "intend," "could," "would," "strives" and similar expressions are generally intended to identify forward-looking statements. These statements are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. A number of important factors could cause actual results of the Company and its subsidiaries to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to: (i) the effect of the Delaware Court of Chancery's October 1, 2018 decision against the Company and the Delaware Supreme Court's December 7, 2018 order affirming the Chancery Court's decision on the Company's ability to retain and hire key personnel, its ability to maintain relationships with its customers, suppliers and others with whom it does business, or its operating results and business generally, (ii) the risk that ongoing or future litigation against the defendants or related to the court's decision may result in significant costs of defense, indemnification and/or liability, (iii) the outcome of the investigation conducted by the Company, with the assistance of outside consultants, into alleged breaches of FDA data integrity requirements relating to product development at the Company and any actions taken by the Company, third parties or the FDA as a result of such investigations, (iv) the difficulty of predicting the timing or outcome of product development efforts, including FDA and other regulatory agency approvals and actions, if any, (v) the timing and success of product launches, (vi) difficulties or delays in manufacturing, (vii) the Company's increased indebtedness and obligation to comply with certain covenants and other obligations under its standstill agreement with its first lien term loan lenders (the "Standstill Agreement"), which create material uncertainties and risks to its growth and business outlook, (viii) the Company's obligation under the Standstill Agreement to pay certain fees and expenses and increased interest margin, (ix) the Company's exploration of strategic alternatives, including the alternatives of seeking to restructure its indebtedness and/or implement a strategic transaction (including a sale of its assets) with the protections of a filing under Chapter 11 of the U.S. Bankruptcy Code, (x) the risk that the holders of a significant number of shares have opted out of and elected not to participate in or be bound by the settlement agreement with the putative class members in the pending securities class action (the "Settlement Agreement"), (xi) the risk that the Settlement Agreement may not obtain the necessary approval by the court or may be terminated in accordance with its terms, (xii) the risk that insurance proceeds, common shares or other consideration contemplated to be exchanged pursuant to the proposed settlement is not available at the appropriate time and (xiii) such other risks and uncertainties outlined in the risk factors detailed in Part I, Item 1A, "Risk Factors," of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (as filed with the Securities and Exchange Commission ("SEC") on March 1, 2019) and in Part II, Item 1A, "Risk Factors," of the Company's Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2019 (as filed with the SEC on May 9, 2019), June 30, 2019 (as filed with the SEC on August 2, 2019) and September 30, 2019 (as filed with the SEC on October 31, 2019) and other risk factors identified from time to time in the Company's filings with the SEC. Readers should carefully review these risk factors, and should not place undue reliance on the Company's forward-looking statements. These forward-looking statements are based on information, plans and estimates at the date of this Current Report on Form 8-K. The Company undertakes no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.
SOURCE Akorn, Inc.