Akorn puts up 'for sale' flag

US generic drugmaker Akorn (Nasdaq: AKRX) yesterday announced it has reached an agreement with certain of its lenders to extend the standstill period, and indicated it would seek a buyer, with the news sending the firm’s shares plunging more than 24% to $1.10 in pre-market trading today.

The agreement defines a path forward and outlines milestones to execute a sale of Akorn's business, potentially using Chapter 11 protection in order to address Akorn's litigation-related overhangs and execute a transaction that maximizes value.

Doug Boothe, Akorn's president and chief executive, commented: "Akorn is a fundamentally strong business with exciting opportunities ahead. Our efforts to stabilize and strengthen our business have already achieved meaningful results. The decision to pursue a sale of the company gives Akorn the opportunity to address its capital structure and litigation-related overhangs by seeking a new owner that will continue to invest in our business and future growth. I believe that this decisive action is the right path for our business and will deliver greater financial security in the long term."