##### 



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR
 THE QUARTERLY PERIOD ENDED March 31, 2007
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE TRANSITION PERIOD FROM  TO
 COMMISSION FILE NUMBER: 0-13976
 AKORN, INC.
 (Exact Name of Registrant as Specified in its Charter)
 LOUISIANA
    
    72-0717400(State or Other Jurisdiction of
    
    (I.R.S. EmployerIncorporation or Organization)
    
    Identification No.)2500 MILLBROOK DRIVE
    
    60089BUFFALO GROVE, ILLINOIS
    
    (Zip Code)(Address of Principal Executive Offices)
 (847) 279-6100
 (Registrants telephone number)
  Yes þ No o
  Large accelerated filer o Accelerated filer þ Non-accelerated filer o
  Yes o No þ




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##### 



PagePART I. FINANCIAL INFORMATIONITEM 1. Financial Statements.Condensed Consolidated Balance Sheets-March 31, 2007 and December 31, 2006
    
    
    3Condensed Consolidated Statements of Operations-Three months ended March 31, 2007 and 2006
    
    
    4Condensed Consolidated Statement of Shareholders Equity-Three months ended March 31, 2007 and 2006
    
    
    5Condensed Consolidated Statements of Cash Flows-Three months ended March 31, 2007 and 2006
    
    
    6Notes to Condensed Consolidated Financial Statements.
    
    
    7ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
    
    
    16ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.
    
    
    19ITEM 4. Controls and Procedures.
    
    
    19PART II. OTHER INFORMATIONITEM 1. Legal Proceedings.
    
    
    19ITEM 1A. Risk Factors.
    
    
    19ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds.
    
    
    19ITEM 3. Defaults Upon Senior Securities.
    
    
    20ITEM 4. Submission of Matters to a Vote of Security Holders.
    
    
    20ITEM 5. Other Information.
    
    
    20ITEM 6. Exhibits.
    
    
    21
  2




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##### 



PART I. FINANCIAL INFORMATION
 Item 1. Financial Statements.
 AKORN, INC.
 CONDENSED CONSOLIDATED BALANCE SHEETS
 IN THOUSANDS, EXCEPT SHARE DATA
 MARCH 31,
    
    
    DECEMBER 31,2007
    
    
    2006(UNAUDITED)
    
    
    (AUDITED)ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    18,064
    
    
    $
    21,818Trade accounts receivable (less allowance for doubtful accounts of $9 and $3,
respectively)
    
    
    2,131
    
    
    
    4,781Inventories
    
    
    14,200
    
    
    
    11,734Prepaid expenses and other current assets
    
    
    1,116
    
    
    
    1,321TOTAL CURRENT ASSETS
    
    
    35,511
    
    
    
    39,654PROPERTY, PLANT AND EQUIPMENT, NET
    
    
    33,229
    
    
    
    33,486OTHER LONG-TERM ASSETSIntangibles, net
    
    
    8,537
    
    
    
    8,825Other
    
    
    111
    
    
    
    118TOTAL OTHER LONG-TERM ASSETS
    
    
    8,648
    
    
    
    8,943TOTAL ASSETS
    
    $
    77,388
    
    
    $
    82,083LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent installments of debt
    
    $
    401
    
    
    $
    394Trade accounts payable
    
    
    4,100
    
    
    
    4,719Accrued compensation
    
    
    1,031
    
    
    
    1,849Customer accrued liabilities
    
    
    326
    
    
    
    391Accrued expenses and other liabilities
    
    
    2,801
    
    
    
    2,900TOTAL CURRENT LIABILITIES
    
    
    8,659
    
    
    
    10,253LONG-TERM LIABILITIESLong-term debt, less current installments
    
    
    105
    
    
    
    208Product warranty liability
    
    
    1,308
    
    
    
    1,308TOTAL LONG-TERM LIABILITIES
    
    
    1,413
    
    
    
    1,516TOTAL LIABILITIES
    
    
    10,072
    
    
    
    11,769SHAREHOLDERS EQUITYCommon stock, no par value  150,000,000 shares authorized;
86,597,216 and 85,990,964 shares issued and outstanding at March 31, 2007
and December 31, 2006, respectively
    
    
    152,746
    
    
    
    150,250Warrants to acquire common stock
    
    
    4,211
    
    
    
    4,862Accumulated deficit
    
    
    (89,641
    )
    
    
    (84,798
    )TOTAL SHAREHOLDERS EQUITY
    
    
    67,316
    
    
    
    70,314TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    77,388
    
    
    $
    82,083
  3




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##### 



AKORN, INC.
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 IN THOUSANDS, EXCEPT PER SHARE DATA

(UNAUDITED)
 THREE MONTHS ENDEDMARCH 31,2007
    
    
    2006Revenues
    
    $
    11,735
    
    
    $
    29,730Cost of sales
    
    
    9,246
    
    
    
    17,997GROSS PROFIT
    
    
    2,489
    
    
    
    11,733Selling, general and administrative expenses
    
    
    5,242
    
    
    
    4,484Amortization and write-down of intangibles
    
    
    338
    
    
    
    351Research and development expenses
    
    
    2,011
    
    
    
    2,045TOTAL OPERATING EXPENSES
    
    
    7,591
    
    
    
    6,880OPERATING (LOSS) INCOME
    
    
    (5,102
    )
    
    
    4,853Interest income/(expense)  net
    
    
    259
    
    
    
    (1,319
    )Debt Retirement Expense
    
    
    
    
    
    
    (391
    )Other Expense
    
    
    
    
    
    
    (17
    )(LOSS)/INCOME BEFORE INCOME TAXES
    
    
    (4,843
    )
    
    
    3,126Income tax provision
    
    
    
    
    
    
    NET (LOSS)/INCOME
    
    
    (4,843
    )
    
    
    3,126Preferred stock dividends and adjustments
    
    
    
    
    
    
    (326
    )NET (LOSS)/INCOME AVAILABLE TO COMMON STOCKHOLDERS
    
    $
    (4,843
    )
    
    $
    2,800NET (LOSS)/INCOME PER SHARE:BASIC
    
    $
    (0.06
    )
    
    $
    0.05DILUTED
    
    $
    (0.06
    )
    
    $
    0.04SHARES USED IN COMPUTING NET (LOSS)/INCOME PER SHARE:BASIC
    
    
    86,252
    
    
    
    61,715DILUTED
    
    
    86,252
    
    
    
    74,980
  4




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##### 



AKORN, INC.
 CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
 FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006
 UNAUDITED
 (In Thousands)
 Warrants toSeries A
    
    
    Series B
    
    
    acquire
    
    
    Retained EarningsCommon Stock
    
    
    Preferred
    
    
    Preferred
    
    
    Common
    
    
    (AccumulatedThree Months Ended March 31, 2007
    
    Shares
    
    
    Amount
    
    
    Stock
    
    
    Stock
    
    
    Stock
    
    
    Deficit)
    
    
    TotalBALANCES AT DECEMBER 31, 2006
    
    
    85,991
    
    
    $
    150,250
    
    
    $
    
    
    
    $
    
    
    
    $
    4,862
    
    
    $
    (84,798
    )
    
    $
    70,314Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,843
    )
    
    
    (4,843
    )Exercise of warrants into common stock
    
    
    510
    
    
    
    1,033
    
    
    
    
    
    
    
    
    
    
    
    (651
    )
    
    
    
    
    
    
    382Exercise of stock options
    
    
    84
    
    
    
    276
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    276Employee stock purchase plan issuances
    
    
    12
    
    
    
    76
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    76Amortization of deferred compensation
related to restricted stock awards
    
    
    
    
    
    
    221
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    221FAS123R share based payment expense
    
    
    
    
    
    
    890
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    890BALANCES AT MARCH 31, 2007
    
    
    86,597
    
    
    $
    152,746
    
    
    $
    
    
    
    $
    
    
    
    $
    4,211
    
    
    $
    (89,641
    )
    
    $
    67,316
 Warrants toSeries A
    
    
    Series B
    
    
    acquire
    
    
    Retained EarningsCommon Stock
    
    
    Preferred
    
    
    Preferred
    
    
    Common
    
    
    (AccumulatedThree Months Ended March 31, 2006
    
    Shares
    
    
    Amount
    
    
    Stock
    
    
    Stock
    
    
    Stock
    
    
    Deficit)
    
    
    TotalBALANCES AT DECEMBER 31, 2005
    
    
    27,619
    
    
    $
    67,339
    
    
    $
    27,232
    
    
    $
    10,758
    
    
    $
    13,696
    
    
    $
    (77,992
    )
    
    $
    41,033Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,126
    
    
    
    3,126Preferred stock dividends earned
    
    
    
    
    
    
    
    
    
    
    55
    
    
    
    164
    
    
    
    
    
    
    
    (219
    )
    
    
    Intrinsic value of beneficial conversion
features in convertible preferred stock
    
    
    
    
    
    
    107
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (107
    )
    
    
    Conversion of preferred stock into
common stock
    
    
    37,658
    
    
    
    29,452
    
    
    
    (27,287
    )
    
    
    (2,165
    )
    
    
    
    
    
    
    
    
    
    
    Exercise of warrants into common stock
    
    
    788
    
    
    
    1,188
    
    
    
    
    
    
    
    
    
    
    
    (1,093
    )
    
    
    
    
    
    
    95Conversion of convertible notes into
common stock
    
    
    3,540
    
    
    
    7,298
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,298Net proceeds from issuance of common
stock and warrants
    
    
    4,312
    
    
    
    16,257
    
    
    
    
    
    
    
    
    
    
    
    1,821
    
    
    
    
    
    
    
    18,078Exercise of stock options
    
    
    356
    
    
    
    297
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    297Employee stock purchase plan issuances
    
    
    9
    
    
    
    41
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41Amortization of deferred compensation
related to restricted stock awards
    
    
    
    
    
    
    130
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    130FAS 123R share based payment expense
    
    
    
    
    
    
    203
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    203BALANCES AT MARCH 31, 2006
    
    
    74,282
    
    
    $
    122,312
    
    
    $
    
    
    
    $
    8,757
    
    
    $
    14,424
    
    
    $
    (75,192
    )
    
    $
    70,301
 5




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##### 



AKORN, INC.
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 IN THOUSANDS (UNAUDITED)
 THREE MONTHSENDED MARCH 312007
    
    
    2006OPERATING ACTIVITIESNet (loss)/income
    
    $
    (4,843
    )
    
    $
    3,126Adjustments to reconcile net (loss)/income to net cash (used in)/provided
by operating activities:Depreciation and amortization
    
    
    1,095
    
    
    
    818Amortization of debt discounts
    
    
    
    
    
    
    1,059Non-cash stock compensation expense
    
    
    1,111
    
    
    
    333Changes in operating assets and liabilities:Trade accounts receivable
    
    
    2,650
    
    
    
    1,191Inventories
    
    
    (2,466
    )
    
    
    (687
    )Prepaid expenses and other current assets
    
    
    212
    
    
    
    (184
    )Trade accounts payable
    
    
    (619
    )
    
    
    (301
    )Product warranty liability
    
    
    
    
    
    
    1,159Accrued customer liability
    
    
    (65
    )
    
    
    2,980Accrued expenses and other liabilities
    
    
    (917
    )
    
    
    (694
    )NET CASH (USED IN)/PROVIDED BY OPERATING ACTIVITIES
    
    
    (3,842
    )
    
    
    8,800INVESTING ACTIVITIESPurchases of property, plant and equipment
    
    
    (500
    )
    
    
    (718
    )Purchase of intangible assets
    
    
    (50
    )
    
    
    NET CASH USED IN INVESTING ACTIVITIES
    
    
    (550
    )
    
    
    (718
    )FINANCING ACTIVITIES (See Note 1 below)Repayment of long-term debt
    
    
    (96
    )
    
    
    (2,826
    )Proceeds from common stock and warrant offering
    
    
    
    
    
    
    18,078Proceeds from warrants exercised
    
    
    382
    
    
    
    95Proceeds under stock option and stock purchase plans
    
    
    352
    
    
    
    338NET CASH PROVIDED BY FINANCING ACTIVITIES
    
    
    638
    
    
    
    15,685(DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    (3,754
    )
    
    
    23,767Cash and cash equivalents at beginning of period
    
    
    21,818
    
    
    
    791CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    18,064
    
    
    $
    24,558Amount paid for interest
    
    $
    14
    
    
    $
    542Amount paid for income taxes
    
    $
    1
    
    
    $
    2
   6




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##### 



NOTE A  BUSINESS AND BASIS OF PRESENTATION
 Business:
 Basis of Presentation
 NOTE B  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Use of Estimates:
 Chargebacks:
  7




---



##### 



Sales Returns:
  NOTE C  STOCK BASED COMPENSATION
     THREE MONTHS
    
    THREE MONTHSENDED
    
    ENDEDMARCH 31, 2007
    
    MARCH 31, 2006(SFAS 123(R))
    
    (SFAS 123 (R))Expected Volatility
    
    
    46
    %
    
    
    62
    %Expected Life (in years)
    
    
    3.6
    
    
    
    3.6Risk-free interest rate
    
    
    4.6
    %
    
    
    4.6
    %Dividend yield
    
    
    
    
    
    
    Fair value per stock option
    
    $
    2.46
    
    
    $
    2.20Forfeiture Rate
    
    
    10
    %
    
    
    10
    %
  8




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##### 



Weighted AverageNumber of
    
    Weighted
    
    RemainingShares
    
    Average
    
    Contractual Term
    
    Aggregate(in thousands)
    
    Exercise Price
    
    (Years)
    
    Intrinsic ValueOutstanding at January 1, 2007
    
    
    3,155
    
    
    $
    3.22Granted
    
    
    1,850
    
    
    $
    6.23Exercised
    
    
    (84
    )
    
    $
    3.25Forfeited
    
    
    (21
    )
    
    $
    4.99Outstanding at March 31, 2007
    
    
    4,900
    
    
    $
    4.35
    
    
    
    3.47
    
    
    $
    11,738Exercisable at March 31, 2007
    
    
    2,264
    
    
    $
    3.00
    
    
    
    2.43
    
    
    $
    8,499
    Number of Shares
    
    Weighted Average(in thousands)
    
    Grant Date Fair ValueNonvested at December 31, 2006
    
    
    350
    
    
    $
    5.05Granted
    
    
    
    
    
    
    Vested
    
    
    
    
    
    
    Canceled
    
    
    
    
    
    
    Nonvested at March 31, 2007
    
    
    350
    
    
    $
    5.05
 NOTE D  REVENUE RECOGNITION
    NOTE E  ACCOUNTS RECEIVABLE ALLOWANCES
 9




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##### 



MARCH 31,
    
    
    DECEMBER 31,2007
    
    
    2006Gross Accounts Receivable
    
    $
    13,510
    
    
    $
    15,826Less:Allowance for Doubtful Accounts
    
    
    (9
    )
    
    
    (3
    )Returns Reserve
    
    
    (2,237
    )
    
    
    (2,437
    )Discount and Allowances Reserve
    
    
    (274
    )
    
    
    (236
    )Chargeback and Rebates Reserves
    
    
    (8,859
    )
    
    
    (8,369
    )Net Trade Accounts Receivable
    
    $
    2,131
    
    
    $
    4,781
     NOTE F  INVENTORIES
  MARCH 31,
    
    
    DECEMBER 31,2007
    
    
    2006Finished goods
    
    $
    3,069
    
    
    $
    2,923Work in process
    
    
    1,320
    
    
    
    1,293Raw materials and supplies
    
    
    9,811
    
    
    
    7,518$
    14,200
    
    
    $
    11,734
  10




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##### 



NOTE G  PROPERTY, PLANT AND EQUIPMENT
  MARCH 31,
    
    
    DECEMBER 31,2007
    
    
    2006Land
    
    $
    396
    
    
    $
    396Buildings and leasehold improvements
    
    
    18,071
    
    
    
    18,071Furniture and equipment
    
    
    37,915
    
    
    
    37,826Automobiles
    
    
    55
    
    
    
    55Sub-total
    
    
    56,437
    
    
    
    56,348Accumulated depreciation
    
    
    (29,394
    )
    
    
    (28,637
    )27,043
    
    
    
    27,711Construction in progress
    
    
    6,186
    
    
    
    5,775Property, Plant, & Equipment, net
    
    $
    33,229
    
    
    $
    33,486
  NOTE H  FINANCING ARRANGEMENTS
  MARCH 31,
    
    
    DECEMBER 31,2007
    
    
    2006Mortgages payable
    
    $
    506
    
    
    $
    602Less current installments of debt
    
    
    (401
    )
    
    
    (394
    )Long-term debt
    
    $
    105
    
    
    $
    208
    11




---



##### 



NOTE I  COMMON STOCK ISSUANCE
  NOTE J  EARNINGS PER COMMON SHARE
  March 31,
    
    
    March 31,Fully Diluted Earnings Per Share Data
    
    2007
    
    
    2006Net (loss)/income available to common stockholders  basic
    
    $
    (4,843
    )
    
    $
    2,800Preferred stock dividends adjustment
    
    
    
    
    
    
    55Adjusted earnings  fully diluted basis
    
    $
    (4,843
    )
    
    $
    2,855Basic Shares
    
    
    86,252
    
    
    
    61,715Preferred Stock
    
    
    
    
    
    
    4,897Warrants
    
    
    
    
    
    
    6,750Options
    
    
    
    
    
    
    1,618Fully Diluted Shares
    
    
    86,252
    
    
    
    74,980
  NOTE K  INDUSTRY SEGMENT INFORMATION
 12




---



##### 



THREE MONTHS ENDED MARCH 31,2007
    
    
    2006REVENUESOphthalmic
    
    $
    4,217
    
    
    $
    3,807Hospital Drugs & Injectables
    
    
    5,443
    
    
    
    23,897Contract Services
    
    
    2,075
    
    
    
    2,026Total revenues
    
    $
    11,735
    
    
    $
    29,730GROSS PROFITOphthalmic
    
    $
    674
    
    
    $
    998Hospital Drugs & Injectables
    
    
    1,518
    
    
    
    10,177Contract Services
    
    
    297
    
    
    
    558Total gross profit
    
    
    2,489
    
    
    
    11,733Operating expenses
    
    
    7,591
    
    
    
    6,880Operating (loss)/income
    
    
    (5,102
    )
    
    
    4,853Interest & Other income (expense)
    
    
    259
    
    
    
    (1,336
    )Debt Retirement expense
    
    
    
    
    
    
    (391
    )(Loss)/Income before income taxes
    
    $
    (4,843
    )
    
    $
    3,126
  NOTE L  COMMITMENTS AND CONTINGENCIES
     13




---



##### 



NOTE M  CUSTOMER AND SUPPLIER CONCENTRATION
     NOTE N  RECENT ACCOUNTING PRONOUNCEMENTS
  14




---



##### 



15




---



##### 



Item 2.
 AKORN, INC.
 MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
 FORWARD-LOOKING STATEMENTS AND FACTORS AFFECTING FUTURE RESULTS
  
    
    Our ability to comply with all of the requirements of the FDA, including current Good
Manufacturing Practices regulations;
    
    Our ability to resolve our Food and Drug Administration compliance issues at our
Decatur, Illinois facilities;
    
    Our ability to obtain regulatory approvals of, commence operations at and obtain business
for our new lyophilization facility;
    
    Our ability to generate cash from operations sufficient to meet our working capital requirements;
    
    The effects of federal, state and other governmental regulation on our business;
    
    Our success in developing, manufacturing, acquiring and marketing new products;
    
    The success of our strategic partnerships for the development and marketing of new products;
    
    Our ability to bring new products to market and the effects of sales of such products on our financial results;
    
    The effects of competition from generic pharmaceuticals and from other pharmaceutical companies;
    
    Availability of raw materials needed to produce our products; and
    
    Other factors referred to in this Form 10-Q, our Form 10-K and our other Securities and
Exchange Commission (SEC) filings.
 RESULTS OF OPERATIONS
 THREE MONTHS ENDED MARCH 31, 2007 COMPARED TO 2006
  THREE MONTHS ENDED MARCH 31,2007
    
    
    2006Ophthalmic segment
    
    $
    4,217
    
    
    $
    3,807Hospital Drugs & Injectables segment
    
    
    5,443
    
    
    
    23,897Contract Services segment
    
    
    2,075
    
    
    
    2,026Total revenues
    
    $
    11,735
    
    
    $
    29,730
  16




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FINANCIAL CONDITION AND LIQUIDITY
 Overview
    Facility Expansion
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CRITICAL ACCOUNTING POLICIES
  RECENT ACCOUNTING PRONOUNCEMENTS
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  ITEM 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  PART II. OTHER INFORMATION
 ITEM 1. LEGAL PROCEEDINGS
  ITEM 1A. RISK FACTORS
   ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  ITEM 5. OTHER INFORMATION
  20




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ITEM 6. EXHIBITS
  Exhibit No.
    
    Description(3.1)
    
    Restated Articles of Incorporation of Akorn, Inc. dated September 16, 2004, incorporated by reference to
Exhibit 3.1 to Akorn, Inc.s Registration Statement on Form S-1 filed on September 21, 2004.(3.2)
    
    Amended and Restated By-laws of Akorn, Inc. incorporated by reference to Exhibit 3.2 to Akorn, Inc.s
Registration Statement on Form S-1 filed on June 14, 2005.(3.3)
    
    Amendment to By-laws of Akorn, Inc. incorporated by reference to Exhibit 3.1 to the Akorn, Inc.s report on
Form 8-K filed on March 31, 2006.(3.4)
    
    Amendment to Bylaws of Akorn, Inc., incorporated by reference to Exhibit 3.1 to Akorn, Inc.s report on Form
8-K filed on December 14, 2006.(4.1)
    
    First Amendment dated October 7, 2003 to Registration Rights Agreement dated July 12, 2001 between Akorn,
Inc. and The John N. Kapoor Trust dated 9/20/89, incorporated by reference to Exhibit 4.1 to Akorn, Inc.s
report on Form 8-K filed on October 24, 2003.(4.2)
    
    Form of Warrant Certificate, incorporated by reference to Exhibit 4.2 to Akorn, Inc.s report on Form 8-K
filed on October 24, 2003.(4.3)
    
    Form of Warrant Agreement dated October 7, 2003 between Akorn, Inc. and certain investors, incorporated by
reference to Exhibit 4.3 to Akorn, Inc.s report on Form 8-K filed on October 24, 2003.(4.4)
    
    Warrant Agreement dated October 7, 2003 between Akorn, Inc. and The John N. Kapoor Trust dated 9/20/89
issued with respect to New Credit Facility guaranty, incorporated by reference to Exhibit 4.4 to Akorn,
Inc.s report on Form 8-K filed on October 24, 2003.(4.5)
    
    Warrant Agreement dated October 7, 2003 between Akorn, Inc. and Arjun C. Waney issued with respect to New
Credit Facility guaranty, incorporated by reference to Exhibit 4.5 to Akorn, Inc.s report on Form 8-K filed
on October 24, 2003.(4.6)
    
    Warrant Agreement dated October 7, 2003 between Akorn, Inc. and The John N. Kapoor Trust dated 9/20/89
issued with respect to the Notes, incorporated by reference to Exhibit 4.6 to Akorn, Inc.s report on Form
8-K filed on October 24, 2003.(4.7)
    
    Warrant Agreement dated October 7, 2003 between Akorn, Inc. and Arjun C. Waney issued with respect to the
Notes, incorporated by reference to Exhibit 4.7 to the Akorn, Inc.s report on Form 8-K filed on October 24,
2003.(4.8)
    
    Warrant Agreement dated October 7, 2003 between Akorn, Inc. and Argent Fund Management Ltd. issued with
respect to the Notes, incorporated by reference to Exhibit 4.8 to Akorn, Inc.s report on Form 8-K filed on
October 24, 2003.(4.9)
    
    Registration Rights Agreement dated October 7, 2003 among Akorn, Inc. and certain investors, incorporated by
reference to Exhibit 4.9 to Akorn, Inc.s report on Form 8-K filed on October 24, 2003.(4.10)
    
    Form of Subscription Agreement between Akorn, Inc. and certain investors, incorporated by reference to
Exhibit 4.1 to Akorn, Inc.s report on Form 8-K filed on August 24, 2004.(4.11)
    
    Form of Common Stock Purchase Warrant between Akorn, Inc. and certain investors, incorporated by reference
to Exhibit 4.2 to Akorn, Inc.s report on Form 8-K filed on August 24, 2004.
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Exhibit No.
    
    Description(4.12)
    
    Warrant Purchase and Registration Agreement dated June 18, 2003 between Akorn Inc. and AEG Partners LLC,
incorporated by reference to Exhibit 4.1 to Akorn, Inc.s report on Form 8-K filed on August 27, 2004.(4.13)
    
    Stock Registration Rights Agreement dated November 15, 1990 between Akorn, Inc. and The John N. Kapoor Trust
dated 9/20/89, incorporated by reference to Exhibit 4.12 to Akorn, Inc.s Registration Statement on Form S-1
filed on September 21, 2004.(4.14)
    
    Stock Purchase Agreement dated November 15, 1990 between Akorn, Inc. and The John N. Kapoor Trust dated
9/20/89, incorporated by reference to Exhibit 4.13 to Akorn, Inc.s Registration Statement on Form S-1 filed
on September 21, 2004.(4.15)
    
    Form of Securities Purchase Agreement dated March 1, 2006 between Akorn, Inc. and certain investors,
incorporated by reference to Exhibit 4.1 to Akorn Inc.s report on Form 8-K filed March 7, 2006.(4.16)
    
    Form of Warrant issued in connection with the Securities Purchase Agreement dated March 1, 2006,
incorporated by reference to Exhibit 4.2 to Akorn, Inc.s report on Form 8-K filed on March 7, 2006. (All
warrants are dated March 8, 2006. Please see Exhibit 99.1 of Akorn, Inc.s report on Form 8-K filed March
14, 2006, which is hereby incorporated by reference, for a schedule setting forth the other material details
for each of the warrants.)(4.17)
    
    Securities Purchase Agreement dated September 13, 2006, between Akorn, Inc. and Serum Institute of India,
incorporated by reference to Exhibit 4.1 to Akorn Inc.s report on Form 8-K filed September 14, 2006.(10.1)
    
    Amendment to Credit Agreement dated March 5, 2007 between Akorn, Inc., LaSalle Bank , the financial
institutions party thereto and Akorn (New Jersey), Inc. incorporated by reference to Exhibit 10.1 to Akorn
Inc.s report on Form 8-K filed March 6, 2007.(10.2)^
    
    Exclusive Distribution Agreement dated March 22, 2007 between Akorn, Inc. and the University of
Massachusetts, as represented by the Massachusetts Biological Laboratories, incorporated by reference to
Exhibit 10.1 to Akorn Inc.s report on Form 8-K filed March 30, 2007.(10.3)
    
    2007 Management Bonus Objectives, incorporated by reference to Exhibit 10.1 to Akorn Inc.s report on Form
8-K filed April 23, 2007.(31.1)*
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934(31.2)*
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934(32.1)*
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002(32.2)*
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002
 22




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SIGNATURES
  AKORN, INC./s/ JEFFREY A. WHITNELL

     Jeffrey A. WhitnellSr. Vice President, Chief Financial Officer(Duly Authorized and Principal Financial Officer)
  23