Akorn exits vaccine distribution business

Dec 19 2009

Akorn, Inc. (NASDAQ: AKRX) today announced that it failed to reach an amicable resolution to a longer term and strategic business arrangement with the supplier of its Tetanus Diphtheria (“Td”) vaccine and as a result will be exiting the business. The existing supply agreement will end on March 14, 2010. The company previously announced its intent to exit the distribution of flu vaccines.

Raj Rai, Interim Chief Executive Officer, commented, “In our review and analysis of the current vaccine business environment and the long-term strategy of the company, we concluded that the vaccine distribution business is non-strategic to our core generic pharmaceutical business. Although it contributed significantly to the top line growth, it has distracted our sales efforts away from the company’s more profitable product portfolio. In addition, the Td vaccine business created excessive financial burden on the company since its launch and is expected to contribute only marginally to operating profits in 2009.”

Rai further added, “We are well positioned to have a successful 2010 with opportunities to grow with recently launched products and expected new product approvals next year. Exiting the vaccine distribution business allows our sales force to focus on new product launches and on higher margin products. We expect a smooth transition of the Td vaccine business and will continue to support our existing customer needs through our supply chain.”

Source Akorn, Inc.