The Delaware Supreme Court on Friday upheld a lower court ruling permitting Fresenius Kabi to terminate its agreement to acquire Akorn for more than $4 billion. Shares in the latter drugmaker were down as much as 37 percent on the news. 

In its ruling, the Supreme Court concluded that the "record adequately supports the Court of Chancery's determination that Akorn suffered a material adverse effect" that would permit Fresenius to exit the accord. In its decision, Fresenius had argued that Akorn failed to fulfil a number of obligations associated with the merger, while Akorn accused the German firm of experiencing buyer's remorse. 

Akorn had filed litigation in an attempt to force Fresenius to consummate the merger agreement. Akorn chief executive Raj Rai also accused Fresenius of smearing Akorn in its attempt to withdraw from the deal. Meanwhile, Fresenius acknowledged earlier this year that it had experienced similar testing problems as those cited in its decision to leave its merger agreement with Akorn.   

Commenting on the news, Gabelli & Co. analyst Kevin Kedra remarked "most people...had determined that this was pretty much a long shot [for Akorn]." The analyst continued "now they have to get their house in order and…basically correct the problems that led to the deal falling apart in the first place and operate in what is still a challenging generic drugs market."  

Separately on Friday, shares in Fresenius fell as much as 18 percent after the drugmaker announced that it has abandoned its 2020 revenue targets and warned of stagnant profits in 2019.