Akorn CEO Raj Rai resigns after US court permits Fresenius to exit merger deal

Akorn announced the retirement of chief executive Raj Rai after the Delaware Supreme Court rejected the company's appeal of a ruling permitting Fresenius to walk away from its $4.3-billion deal to purchase the drugmaker. Akorn noted that Rai will remain in the post until a successor is named. Board chairman Alan Weinstein commented "we recognise that this has been an extended period of uncertainty for Akorn's customers, employees and investors and the board is committed to ensuring the company’s stability and long-term growth."  

Fresenius disclosed its intention to exit the merger agreement in April and accused Akorn of failing to comply with the terms of the accord. Akorn subsequently filed a lawsuit seeking to compel Fresenius to complete the transaction, while Rai had also contended that Fresenius smeared Akorn as part of its efforts to withdraw from the agreement.  

According to a filing on December 7 with the US Securities and Exchange Commission, Rai agreed with Akorn that his departure "will be treated as a resignation for good reason." Under his severance plan with the drugmaker, Rai would have been eligible for a cash payment of $2.1 million had he been terminated "without cause or good reason."  

Commenting on the news, Piper Jaffray analyst David Amsellem remarked that Rai's departure is good news for Akorn, noting that the drugmaker "could benefit from a new leadership team that is better versed in manufacturing operations and generics R&D."