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Akorn Reports 2012 Fourth Quarter And Year-End Financial Results

Stocks in this article: AKRX

Akorn, Inc. (NASDAQ: AKRX), a niche generic pharmaceutical company, today reported financial results for the fourth quarter and year ended December 31, 2012.

Raj Rai, Chief Executive Officer commented, “We achieved record growth in revenues and profits in 2012 as a result of our strategic growth initiatives – acquisitions, revival of products impacted by hospital drug shortages and new product launches. In addition, we continued to build a robust R&D pipeline. Looking ahead, we plan to further invest in R&D domestically, while expanding the infrastructure in our India facilities to build new capacities, seek growth from new markets and prepare for FDA inspection.”

2012 Key Highlights and Accomplishments

  • Achieved record fourth quarter 2012 consolidated revenue of $71.5 million, up 68% over the prior year quarter.
  • Achieved record year ended 2012 consolidated revenue of $256.2 million, up 87% over the prior year.
  • Maintained gross margins at 58.0%, near the record level achieved in 2011.
  • Completed the acquisition of certain assets of Kilitch Drugs in India which expands the Company’s capacity and capabilities in sterile injectables.
  • Received FDA approval on 5 new ANDAs with a combined addressable IMS market of $655 million.
  • Launched 10 new products including vancomycin hydrochloride capsules, latanaprost ophthalmic solution, progesterone capsules and the first to market generic of pantoprazole sodium for injection. The 2012 product launches have an addressable IMS market of $900 million.
  • Re-launched 8 products with a combined addressable IMS market of $120 million.
  • Filed a record 25 ANDAs and completed the development on an additional 10 ANDAs with a combined annual IMS market size of approximately $2.9 billion.

Financial Results for the Quarter Ended December 31, 2012

Consolidated revenue for the fourth quarter of 2012 was $71.5 million, up 68% over the prior year quarter’s consolidated revenue of $42.6 million. The increase in consolidated revenue was driven by the Lundbeck and Kilitch acquisitions, the sale of newly approved and re-launched products, and organic growth of established products, offset by decreases in the US contract services business. The Company launched three new products in the fourth quarter of 2012: progesterone capsules, pantoprazole sodium for injection and a tetanus-diphtheria (Td) vaccine. The revenue impact of Hurricane Sandy was partially offset by earlier than anticipated sales of pantoprazole and Td vaccine. Consolidated gross margin for the fourth quarter of 2012 was 58.7% compared to 60.0% in the comparable prior year period. The decrease in gross margin was the result of lower margins from Akorn India, which began operations in February 2012 through the acquisition of certain assets from Kilitch Drugs (India) Limited as well as the impact of Hurricane Sandy, which resulted in a two week disruption in manufacturing from our Somerset, New Jersey ophthalmic plant.

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