What: Following a business update related to its ongoing investigation of material weakness in its financial accounting, shares of Akorn (NASDAQ:AKRX) fell 10% earlier today.
So what: After revealing material weaknesses early last year that could impact its prior financial results, the generics ophthalmologic drugmaker has been knee deep in an investigation into its accounting.
Yesterday, the company provided an estimate that its 2014 net sales and pre-tax income from continuing operations had been overstated by $35 million.
It also announced that KPMG LLP will be replaced by BDO USA, LLP as its independent accountant and that the latter will be auditing its 2014 and 2015 financial statements.
Now what: Akorn hasn't filed quarterly financials with the Securities and Exchange Commission since last spring and that has jeopardized its listing on the Nasdaq. The Nasdaq has agreed to extend Akorn's current listing on its exchange until May 2016, and Akorn hopes to get its filings up to date with the SEC soon.
In the meantime, management plans to release preliminary 2015 financial results and initial 2016 guidance in early March. Nevertheless, until its filings have been fully vetted and filed with the SEC, this stock is better left to other investors.