Health and Healthcare
Akorn Back on Track to Restate Results
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Akorn Inc. (NASDAQ: AKRX) reported its preliminary 2015 financial results before the markets opened on Tuesday. This is in an effort to settle up with the U.S. Securities and Exchange Commission (SEC) and file its restated 2014 financial information as well as its delinquent 2015 financial results. Both are expected to be filed with the SEC in a single comprehensive report. At the same time, Akorn issued guidance for the 2016 full year.
In terms of the 2015 numbers, the company reported earnings per share (EPS) of $1.93 and net revenues of roughly $985 million. Consensus estimates from Thomson Reuters called for $1.95 in EPS on $971.4 million in revenue.
In 2015, Akorn received 15 product approvals and two tentative approvals from the U.S. Food and Drug Administration (FDA). This included 11 abbreviated new drug application (ANDA) approvals, two abbreviated new animal drug application (ANADA) approvals, one new drug application (NDA) approval, one significant supplemental ANDA new product approval and two tentative ANDA approvals.
As for the 2014 results, Akorn estimates that the overstatement to full year 2014 net revenue and pretax income from continuing operations is roughly $35 million. These estimates are subject to the completion of the audit of the restated financial statements.
Duane Portwood, chief financial officer of Akorn, commented:
Since joining Akorn late last year, my top priorities have been completing our restatement process, regaining financial reporting compliance and addressing our material weaknesses over financial controls and reporting. Our internal 2014 restatement work is complete and I am pleased with the progress to date with respect to the audit effort underway as we move toward our goal of becoming current with our financial reporting by May 9. Furthermore, we have redesigned and improved the internal controls surrounding our significant accounting and financial reporting areas and I look forward to resolving our material weaknesses as soon as practicable.
The outlook was given as EPS in the range of $2.10 to $2.20 for the 2016 full year, which compares to the consensus estimate of $2.27 in EPS.
Shares of Akorn were trading up about 33.5% at $25.00 Tuesday morning, with a consensus analyst price target of $40.25 and a 52-week trading range of $17.57 to $57.10.
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