- Akorn said it received a warning letter from the Food and Drug Administration over violations found in an inspection last year of its Somerset, New Jersey manufacturing facility.
- The letter follows a lengthy inspection report last year that criticized Akorn's quality control at the plant.
- It's the second formal FDA warning this year for Akorn, following a January letter about the company's facility in Decatur, Illinois.
Akorn is struggling to get its manufacturing operations in order after multiple critiques from the FDA. The company is in the midst of a "companywide action plan" focused on quality control, CEO Douglas Boothe said in a statement Tuesday.
"We believe the execution of this action plan, which has already begun to yield tangible results, will strengthen and further standardize our quality systems across the Akorn network," Boothe said.
The cloud of FDA violations has already hit Akorn's share price and was a major factor in the decision by German drugmaker Fresenius Kabi to pull out of a $4.3 billion agreement to buy Akorn for $34 per share. Akorn shares closed at $4.80 Wednesday.
Investors appeared more optimistic Thursday, however, sending shares in Akorn up 9% to just above $5.20 apiece.
Somerset is one of four Akorn facilities manufacturing commercial products, focusing in particular on making sterile ophthalmic products. The company said it expects to continue production at the plant and will respond to the FDA within the required 15-day period. It didn't give details about the FDA's critiques in the warning letter, which doesn't appear to have been posted online by the FDA yet.
Because of the problems found in Decatur and Somerset, new products manufactured at the facilities can't be approved. Getting the issues resolved so the FDA can reinspect the plant is critical for Akorn, RBC Capital Markets analysts wrote in a May 30 note to investors.
Akorn suggested it was about 85% done with the necessary remediation work as of May, the analysts wrote.