Shares of specialty generic pharma company Akorn, Inc. AKRX were moving lower Wednesday after the company said it received a warning letter from the FDA.
What Happened
Akorn said Wednesday ahead of the market open that the FDA sent a Jan. 4 warning letter tied to inspections of its Decatur, Illinois manufacturing facility that were conducted in April and May 2018.
The FDA took exception to the company's failure to follow written procedures designed to prevent microbiological contamination of drug products, as well as a lack of control systems to prevent contamination and a written testing program to assess stability characteristics of drugs.
The company said it will continue to work collaboratively with the FDA to resolve the issues raised by the agency.
Why It's Important
Akorn shares lost about 90 percent of their value in 2018 following negative news flow on a M&A deal it negotiated with Fresenius Medical Care AG & Co. FMS.
The stock plummeted about 39 percent Feb. 27, 2018 after Akorn disclosed investigation of possible data breaches of FDA data integrity requirements regarding product development, which threatened to derail its proposed deal with Fresenius.
Fresenius opted to terminate the deal in April. Subsequently, in early October, a judge vindicated Fresenius' decision, which further pressured Akorn stock.
With the stock already trading at sub-$4 levels, the warning letter could dent sentiment further.
What's Next
Akorn said it will respond to the FDA warning letter within 15 working days.
The company expressed confidence in the quality of the products manufactured at the Decatur facility and said it will continue production at the plant.
Akorn shares were slipping 7.87 percent to $3.64 at the time of publication Wednesday.
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