By Aakash B
(Reuters) – Akorn Inc said on Tuesday it received a warning letter from the U.S. Food and Drug Administration regarding its manufacturing facility in New Jersey, the latest in a string of setbacks for the generic drugmaker.
Shares of the company were down 1% at $4.67 in afternoon trading. They had fallen nearly 13% in trading before the opening bell on the news.
The FDA warning is the second that Akorn has received this year and follows an inspection of the company’s Somerset, New Jersey-based plant in July and August 2018.
In January, the agency issued a warning letter for Akorn’s other manufacturing plant in Decatur, Illinois after the drugmaker did not resolve previously highlighted violations such as failure to follow procedures to prevent contamination of drugs produced at the plant.
RBC Capital Markets analyst Randall Stanicky said the New Jersey plant is linked to less than 10% of products manufactured by Akorn, and the company’s primary focus would remain on moving past the warning letter it received for its Illinois facility.
The warning letter would likely require Akorn to carry out inspections, but should not impact production at the facility, Stanicky said in a note.
The FDA had also raised concerns about an Akorn manufacturing facility in Amityville, New York, earlier this year.
In addition to troubles at certain manufacturing plants, the company has seen the departure of its Chief Executive Officer Raj Rai, following its inability to salvage a $4 billion takeover deal with Germany’s Fresenius SE & Co KGaA.
The company shares have fallen 70.5% over the past 12 months.
Akorn on Tuesday said it will work to resolve all issues raised in the agency’s letter and that it expects to continue production at the Somerset facility.
(Reporting by Aakash Jagadeesh Babu in Bengaluru; Editing by Shailesh Kuber)