Piper Jaffray: Akorn's Stock Will Be Delisted In 2016

• Shares of Akorn, Inc. AKRX are lower by nearly 3 percent since the start of 2015.
• Despite the stock's $4 billion-plus valuation, Joshua Schimmer of Piper Jaffray suggested that it is "hard to rule out a delisting."
• The analyst cited uncertainty over the company's delayed financial reporting.

Akorn, a specialty pharmaceutical company that manufacturers and markets generic and branded prescription pharmaceuticals, could see its stock delisted in 2016, according to Joshua Schimmer of Piper Jaffray.

As part of a list of 15 "provocative" biopharma events for 2016, Schimmer suggested Akorn's stock will be delisted from the exchange – despite its $4 billion-plus valuation.

Schimmer pointed out that the company has not withdrawn its 2015 financial guidance even though it has not reported any results for 2015 and has yet to restate its actual 2014 results. Meanwhile, the company expects to restate its 2014 results to the SEC in the first quarter of 2015 and has requested a hearing before the Nasdaq Listing Qualifications Panel as it is currently not in compliance with Nasdaq Listing Rule 5250(c)(1).

Related Link: Piper Jaffray Makes 15 ‘Provocative' Predictions For Biopharma Sector In 2016

Nevertheless, the analyst noted that the ongoing financial issues have not affected the stock which is trading at a 2016 P/E of 14x his estimate.

"Though the financial accounting issues have dragged on for the bulk of 2015, the current trading multiples suggest to us that the broader investor community does not believe that the restatements will be all that dramatic, and further suggests that the broader market is not terribly worried about a delisting."

"Who Knows?"

Schimmer hypothetically asked if it is possible the company will further delay its financial reporting. The answer to that is simply, "who knows?" After all, the company suggested in early 2015 that the financial reporting matter would not take more than a few months, yet here we are in the final trading days of 2015.

Despite the potential for a stock delisting, the analyst still views the company's business model, operational performance and pipeline "favorably." Nevertheless, the "unknowns" surrounding the financials and the "specter of a delisting" all mark "obvious question marks" even if the "broader market is not too worried."