February 26, 2018 / 10:44 PM / 19 days ago

Fresenius says probe may affect Akorn deal, sees slower 2018 sales

BERLIN (Reuters) - German healthcare group Fresenius SE (FREG.DE) has raised doubts about its planned acquisition of Akorn (AKRX.O) because of a probe into data integrity at the U.S. maker of liquid generic drugs.

Fresenius said it was conducting an independent investigation into “alleged breaches” at Akorn of U.S. Food and Drug Administration data integrity requirements relating to product development.

“The Management and Supervisory Boards of Fresenius will assess the findings of that investigation,” the company said in a statement late on Monday. “The consummation of the transaction may be affected if the closing conditions under the merger agreement are not met.”

Fresenius declined to give more details though said it continues to seek Federal Trade Commission clearance for the purchase of Akorn which it last year agreed to buy for about 4.4 billion euros.

Akorn said it would continue to work toward obtaining regulatory clearance for the deal.

“To date, the company’s investigation has not found any facts that would result in a material impact on Akorn’s operations and the company does not believe this investigation should affect the closing of the transaction with Fresenius,” Akorn said in a statement.

Akorn shares fell more than 30 percent in after-market trading.

Akorn has been burdened by supply disruptions and competition for a range of products such as ephedrine injection for low blood pressure under anesthesia and lidocaine anesthetic ointment.

    Fresenius said in November that weakness at Akorn could continue into 2018, but the deal was still worthwhile over the longer term. The takeover would enable it to offer a wider choice of drugs to hospitals and pharmacies, the German company previously said.

    Separately, Fresenius said adjusted group sales may expand between 5 and 8 percent this year after jumping 16 percent to 33.9 billion euros ($41.73 billion) in 2017 while adjusted net income was seen growing between 6 and 9 percent.

    Fourth-quarter adjusted net income increased by a fifth to 520 million euros, matching the 522 million-euro consensus forecast in a Reuters poll of banks and brokerages.

    Sales in the October-to-December period rose 17 percent to 8.7 billion euros, Fresenius said, keeping to 2020 profit and sales targets while proposing a dividend of 0.75 euros per share, up a fifth from the 0.62 euros paid out in 2016.

    Reporting by Andreas Cremer and Ludwig Burger; Additional reporting by Ishita Chigilli Palli in Bengaluru Editing by Cynthia Osterman and Amrutha Gayathri

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