8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act

Date of Report: May 12, 2008
(Date of Earliest Event Reported)

Akorn, Inc.

(Exact Name of Registrant as Specified in its Charter)

Louisiana	0-13976	72-0717400
(State or other	(Commission	(I.R.S. Employer
Jurisdiction of Incorporation)	File Number)	Identification No.)

2500 MILLBROOK DRIVE
BUFFALO GROVE, ILLINOIS
(Address of principal executive offices)

(847) 279-6100
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (See General Instruction A.2. below):

o Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240. 13e-4(c))

Item 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

     On May 12, 2008, Akorn, Inc. (“Akorn”) issued a press release announcing certain results of Akorn’s financial review for the quarter ended March 31, 2008. A copy of the press release is attached hereto as Exhibit 99.1.

Item 7.01 REGULATION FD DISCLOSURE.

     Also on May 12, 2008, Arthur S. Przybyl, President and Chief Executive Officer of Akorn, and Jeffrey A. Whitnell, Chief Financial Officer of Akorn, held a conference call with investors. The scripts for this call for Mr. Przybyl and Mr. Whitnell are attached hereto as Exhibits 99.2 and 99.3, respectively.

     The information in each item of this report, including the exhibits hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

     We expressly disclaim any obligation to update these exhibits and caution that they are only accurate on the date they were presented. The inclusion of any data or statements in these exhibits does not signify that the information is considered material.

Item 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits.

99.1	Press release dated May 12, 2008.
99.2	Script of Mr. Przybyl for May 12, 2008 conference call.
99.3	Script of Mr. Whitnell for May 12, 2008 conference call.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.

	Akorn, Inc.
	By:	/s/ Jeffrey A. Whitnell
		Jeffrey A. Whitnell
Date: May 12, 2008		Chief Financial Officer, Treasurer and Secretary

EX-99.1

Exhibit 99.1

At the Company:
Akorn, Inc.
Arthur S. Przybyl, President and CEO
Jeffrey A. Whitnell, CFO
(847) 279-6100

FOR IMMEDIATE RELEASE

Akorn Reports First Quarter 2008 Financial Results

Buffalo Grove, IL, May 12, 2008 – Akorn, Inc. (NASDAQ: AKRX) a specialty pharmaceutical company, today reported financial results for the first quarter ended March 31, 2008.

Total revenue for the first quarter 2008 was $14.5 million, versus $11.7 million in the first quarter 2007, and represents an increase of approximately 24%. During the first quarter 2008, Ophthalmic business segment revenues totaled $6.0 million, an increase of 41% versus the prior year period. Hospital Drugs and Injectables business segment revenues (excluding DTPA) totaled $5.0 million, an increase of 21% versus the prior year period. The Company recorded DTPA product revenues of approximately $1.3 million in the prior year first quarter versus negligible DTPA product revenues in the first quarter 2008. The Company also recorded Vaccine revenues of approximately $1.8 million in the first quarter 2008. These revenues reflect the launch of our unit dose preservative free Tetanus Diphtheria (Td) vaccine to the hospital market. We realized lower multiple dose Td vaccine sales in the first quarter 2008 than anticipated, but expect shipments to accelerate in the second quarter 2008, as Distributors exhaust their inventories. The Contract Pharmaceutical Manufacturing business segment recorded revenues of approximately $1.6 million in the first quarter 2008.

Gross profit for the first quarter 2008 was $3.7 million as compared to $2.5 million in the first quarter 2007, an increase of 48%. This resulted in an improvement in the Company’s gross margin from 21% to 26%. The increase in first quarter 2008 gross profit is due to a favorable product mix of Ophthalmic and Hospital Drugs and Injectables. Additionally, quarterly product shipments for IC-Green now reflect our historical run rate.

Arthur S. Przybyl, President and Chief Executive Officer stated, “The results of our first quarter are indicative of our improving business model. We are encouraged by our growth in all four of our business segments: Ophthalmics, Hospital Drugs and Injectables, Vaccines and Contract Pharma manufacturing. Whether apparent through reported revenue increases, market share gains, or manufacturing contracts, we are excited about our opportunities for the remainder of 2008. I will elaborate about the opportunities in detail for each of our four business segments in our earnings conference call this afternoon.”

Total operating expenses were $9.0 million for the first quarter 2008 versus $7.6 million in the first quarter 2007. Selling, general and administrative expenses totaled $6.3 million in the first quarter 2008, an increase of $1.0 million over the first quarter 2007. This increase is primarily due to the expansion of our Sales Team from 30 to 65 representatives. The expansion of our Sales Team was necessary for the launch of our two Vaccine products, Td and Flu, and our anticipated product approvals and subsequent launches of our Ophthalmic NDA, Akten™, and our ANDA for generic Vancomycin capsules. At this time, we have completed our planned Sales Team expansion.
Research and development expenses were $2.4 million in the first quarter 2008 versus $2.0 million in the comparative prior year period, and increased due to the expensing of a previously capitalized and paid-for licensing fee and FDA filing fee.

The Company’s net operating loss was approximately $5.2 million in the first quarter 2008 as compared to $5.1 million in the first quarter 2007. This reflects the increase in product revenues of 24% and the increase in gross profit of 48%, offset by higher operating expenses including the one-time R&D write-off of $1.25 million, which increased our loss per share by $0.01. The net loss for the first quarter 2008 was $5.5 million or $0.06 per fully diluted share vs. the net loss of $4.8 million in the first quarter 2007 or $0.06 per fully diluted share.

Company Highlights:

• Biologics and Vaccines Business Segment:

o February 21, 2008: Akorn announced the signing of a Specialty Distributor Agreement with CSL Biotherapies for Afluria^® (Flu Vaccine).

• Ophthalmics Business Segment:

o April 16, 2008: Akorn announced FDA approval of Ofloxacin Ophthalmic Solution USP, 0.3%.

o April 18, 2008: Akorn announced FDA approval of Diclofenac Sodium Ophthalmic Solution.

• Hospital Drugs and Injectables Business Segment:

o January 30, 2008: Akorn announced FDA approval of Calcitriol Injection, 1 mcg/mL and 2 mcg/mL.

o March 19, 2008: Akorn announced FDA approval of Fosphenytoin Sodium Injection for Akorn-Strides, LLC.

o April 3, 2008: Akorn announced the signing of a supply agreement for a novel premix product with Fresenius Kabi.

o April 24, 2008: Akorn announced FDA approval of Ondansetron Injection for Akorn-Strides, LLC.

• Contract Pharmaceutical Manufacturing Business Segment:

o February 14, 2008: Akorn announced the signing of a manufacturing and supply agreement at our Somerset, NJ facility for the contract manufacture of an ophthalmic solution. Initial shipments to the customer occurred in April 2008.

o March 24, 2008: Akorn announced the signing of a manufacturing and supply agreement at our Decatur, IL facility for the development and contract manufacture of three OTC eye care products.

About Akorn, Inc.

Akorn, Inc. manufactures and markets sterile specialty pharmaceuticals. Akorn has manufacturing facilities located in Decatur, Illinois and Somerset, New Jersey and markets and distributes an extensive line of hospital and ophthalmic pharmaceuticals. Additional information is available at the Company’s website at www.akorn.com.

Materials in this press release may contain information that includes or is based upon forward-looking statements within the meaning of the Securities Litigation Reform Act of 1995. Forward-looking statements give our expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning in connection with a discussion of future operating or financial performance. In particular, these include statements relating to future steps we may take, prospective products, future performance or results of current and anticipated products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, and financial results.

Any or all of our forward-looking statements here or in other publications may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many such factors will be important in determining our actual future results. Consequently, no forward-looking statement can be guaranteed. Our actual results may vary materially, and there are not guarantees about the performance of our stock.

Any forward-looking statements represent our expectations or forecasts only as of the date they were made and should not be relied upon as representing our expectations or forecasts as of any subsequent date. We undertake no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise, even if our expectations or forecasts change. You are advised, however, to consult any further disclosures we make on related subjects in our reports filed with the SEC. In particular, you should read the discussion in the section entitled “Cautionary Statement Regarding Forward-Looking Statements” in our most recent Annual Report on Form 10-K, as it may be updated in subsequent reports filed with the SEC. That discussion covers certain risks, uncertainties and possibly inaccurate assumptions that could cause our actual results to differ materially from expected and historical results. Other factors besides those listed there could also adversely affect our results.

AKORN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
IN THOUSANDS

	MARCH 31,			DECEMBER 31,
	2008			2007
	(UNAUDITED)			(AUDITED)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	3,427		$	7,948
Restricted cash for revolving credit agreement		3,300			1,250
Trade accounts receivable (less allowance for doubtful accounts of $3 and $5, respectively)		3,071			4,112
Inventories		33,795			31,095
Prepaid expenses and other current assets		1,294			1,317
TOTAL CURRENT ASSETS		44,887			45,722
PROPERTY, PLANT AND EQUIPMENT, NET		31,752			32,262
OTHER LONG-TERM ASSETS
Intangibles, net		7,032			7,721
Other		155			1,261
TOTAL OTHER LONG-TERM ASSETS		7,187			8,982
TOTAL ASSETS	$	83,826		$	86,966
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Revolving line of credit	$	11,264		$	4,521
Mortgage payable		105			208
Trade accounts payable		8,344			14,070
Accrued compensation		1,152			895
Accrued expenses and other liabilities		1,342			1,306
TOTAL CURRENT LIABILITIES		22,207			21,000
LONG-TERM LIABILITIES
Product warranty		1,299			1,308
TOTAL LONG-TERM LIABILITIES		1,299			1,308
TOTAL LIABILITIES		23,506			22,308
SHAREHOLDERS’ EQUITY
Common stock, no par value — 150,000,000 shares authorized; 89,131,592 and 88,900,588 shares issued and outstanding at March 31, 2008 and December 31, 2007, respectively		167,099			165,829
Warrants to acquire common stock		2,731			2,795
Accumulated deficit		(109,510	)		(103,966	)
TOTAL SHAREHOLDERS’ EQUITY		60,320			64,658
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	83,826		$	86,966

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

	THREE MONTHS ENDED
	MARCH 31,
	2008			2007
Revenues	$	14,459		$	11,735
Cost of sales		10,712			9,246
GROSS PROFIT		3,747			2,489
Selling, general and administrative expenses		6,257			5,242
Amortization of intangibles		339			338
Research and development expenses		2,376			2,011
TOTAL OPERATING EXPENSES		8,972			7,591
OPERATING LOSS		(5,225	)		(5,102	)
Interest (expense)/income, net		(115	)		259
Other expense		(201	)		—
LOSS BEFORE INCOME TAXES		(5,541	)		(4,843	)
Income tax provision		3			—
NET LOSS		(5,544	)		(4,843	)
NET LOSS PER SHARE
BASIC	$	(0.06	)	$	(0.06	)
DILUTED	$	(0.06	)	$	(0.06	)
SHARES USED IN COMPUTING NET LOSS PER SHARE:
BASIC		89,053			86,252
DILUTED		89,053			86,252

AKORN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
IN THOUSANDS
(UNAUDITED)

	THREE MONTHS
	ENDED MARCH 31,
	2008			2007
OPERATING ACTIVITIES
Net loss	$	(5,544	)	$	(4,843	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,118			1,095
Non-cash stock compensation expense		689			1,111
Changes in operating assets and liabilities:
Trade accounts receivable		1,041			2,650
Inventories		(2,700	)		(2,466	)
Prepaid expenses and other current assets		233			212
Other long-term assets		1,246			—
Trade accounts payable		(5,726	)		(619	)
Accrued expenses and other liabilities		284			(982	)
NET CASH USED IN OPERATING ACTIVITIES		(9,359	)		(3,842	)
INVESTING ACTIVITIES
Purchases of property, plant and equipment		(269	)		(500	)
Purchase of intangible assets		—			(50	)
NET CASH USED IN INVESTING ACTIVITIES		(269	)		(550	)
FINANCING ACTIVITIES
Repayment of long-term debt		(103	)		(96	)
Restricted cash for Revolving Credit Agreement		(2,050	)		—
Proceeds from line of credit		6,743			—
Proceeds from warrants exercised		37			382
Proceeds under stock option and stock purchase plans		480			352
NET CASH PROVIDED BY FINANCING ACTIVITIES		5,107			638
DECREASE IN CASH AND CASH EQUIVALENTS		(4,521	)		(3,754	)
Cash and cash equivalents at beginning of period		7,948			21,818
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	3,427		$	18,064
Amount paid for interest	$	175		$	14
Amount paid for income taxes	$	3		$	1

EX-99.2

Exhibit 99.2

Good afternoon, ladies and gentlemen, and welcome to Akorn’s conference call. My name is Art Przybyl and presenting our financial position today is Jeff Whitnell, our CFO. We will hold a brief Q & A period at the end of the presentation. Before I begin, I would like to read our forward looking statement:

n	Statements presented in this overview which are not historical facts are forward looking statements that involve risks and uncertainties that could cause actual results to differ from projected results.
n	Factors that could cause actual results to differ materially are detailed in the Company’s Securities and Exchange Commission filings.

The results of our 1^st quarter are indicative of our improving business model. We are encouraged by our growth in all four of our business units – ophthalmics, hospital drugs and injectables, vaccines and contract pharma manufacturing.

Whether apparent through reported revenue increases or not so apparent but nonetheless significant market share gains and/or development and manufacturing contracts we are excited about our opportunities for the remainder of 2008.

We believe this will be a great year for us.

In the first quarter revenues increased by 24% over the prior year period to $14.5 million.

Ophthalmic revenues recorded a strong increase of 41% to $6.0 million buoyed by IC-Green revenues that now reflect our historical run rate. Initial shipments of Ketotifen began and we recently received two FDA ANDA approvals for both Ofloxacin and Diclofenac ophthalmic solution. These products will add to our ophthalmic revenue base in the third and second quarter respectively. More importantly, we are now within 30 days of our Akten PDUFA date of June 2, 2008. We anticipate approval on this date, our conversations with FDA reflect this confidence, and we expect to launch Akten in the second quarter. Akten is a topical gel anesthetic whose indication is broad, any ocular procedure that requires a topical anesthetic. This includes cataract and other anterior segment procedures, refractive surgery, intravitreal injections, laser procedures and minor diagnostic/surgical office based procedures.

When approved Akten will posses the highest concentration of topical ophthalmic anesthetic available, be delivered by an ophthalmic dropper in a

unit of use preservative free format, have a rapid onset with extended duration anesthetic effect and have an outstanding ocular and systemic safety profile. Akten is viscous making for easier administration and has no stinging effect. The potential market for Akten is approximately 11 million procedures annually, two million in anterior segment surgery, 1 million in refractive surgery, 1 million intravitreal injections, three million laser procedures, and four million minor office based diagnostic and surgical procedures, examples of which include gonioscopy, foreign body removal, suture removal and placement, cryretinopexy, pterygium removal and minor eyelid procedures.

Currently the only other FDA approved ophthalmic topical anesthetic is proparacaine drops 0.5%, they tend to have a limited duration of anesthesia, it is not p.f. and corneal opacification/toxicity can occur as a complication.

Our Akten NDA is a 505b(2) filing whereby we are pursuing a new indication for an established approved chemical compound.

The market for Akten can be simply split into hospitals and office based physicians/surgicenters that perform ophthalmic surgical procedures. Our

initial marketing targets will be our current customers, we estimate that approximately 1 million of our two million units sold of this chemical compound are being used “off label” in hospitals for ophthalmic surgical procedures.

We believe that legitimizing ophthalmic use of this product will be of importance to hospitals.

Secondly, we currently market proparacaine as well, and will target these customers to switch to Akten.

We have filed two U.S. patents in order to protect and secure our intellectual property and extend our three year exclusivity. It has been approximately 25 years since a new approval for an ophthalmic ocular anesthetic has occurred and we believe there will be a significant opportunity for Akten.

As an example of Akten’s potential, sales of 1 million annual units would equal $25 million in revenue at a gross profit of 93%. We look forward to launching Akten in June.

Hospital drugs and injectables revenues increased by 21% to 5.0 million.
This increase was primarily driven through greater group purchasing organization contract compliancy in large part due to the expansion of our

hospital sales team. We did not launch any new hospital drugs in the 1^st quarter but rather extended our market share gains on products such as Hydase that in March achieved 25% proforma annual market share. We launched Hydase approximately 9 months ago. More importantly, our complete product line wholesaler pass-through sales have increased every month since January and recent reported April sales set a record.

Our hospital sales through our wholesalers have increased 15% since January and are representative of our stronger increased percentage of hospital contact compliancy.

Revenues for the Akorn-Strides JV are expected to begin in 2008. The JV has placed purchase orders for five injectable products, three announced ANDA approvals, one for Fosphenytoin sodium, two for Ondansetron injection and two other as yet unannounced products, we expect these two ANDA approvals in the near future.

We continue to include oral generic Vancomycin revenues in our 2008 model, although we have not updated guidance towards an anticipated approval date. However, we remain firmly convinced that FDA is managing this situation, and that the CP will ultimately be denied, by doing so, this

will bring an end to this costly, non-patent protected monopoly, that has some clinicians prescribing the injectable version because of the prohibitive cost of the current Vancomycin product. We stand ready to capture the vast majority of this market when our generic ANDA application is approved.

We continue to meet with senior HHS officials on the subject of forward deployment of DTPA and hope to be able to provide substantive reports on future conference calls.

The opportunity remains for a significant order for DTPA as the need for forward deployment remains an objective for HHS. There is no need to negotiate a new HHS contract since option units remain available on contract for this potential requirement.

Vaccine revenues generated $1.8 million in the 1^st quarter. Vaccines were not launched until September 2007 and hence no prior period revenues exist. Since our launch, revenues of $9.5 million have been reported. Currently, vaccine revenue only includes UD and MDV versions of TD vaccine. Flu vaccine revenues will begin in August 2008. Since our last conference call, we began pre-booking flu for delivery beginning in August through a relationship with CSL, for their Afluria products, since then we have

expanded to also sell GSK Flulaval and Novartis’ Flurvirin products. Through Friday May 9 Flu prebooked sales exceed $7 million.

Vaccine revenues in the 1^st quarter were primarily derived from the launch of our UDPF TD vaccine, and our progress to date has met our expectations. Since launch, we have converted and sold UD TD product to 574 hospitals.

Our actual sales run rate in April exceeded the entire 1^st quarter and is representative of an annual proforma run rate of $9 million dollars. We currently have converted an additional 123 hospitals, committed to buy but who have not yet purchased representing an additional $3 million in annual sales.

A large hospital corporation has also committed to buy representing an additional $1.9 million in annual sales. Based on this, and at the rate we are closing hospital accounts we expect our annual proforma sales run rate to reach $16.8 million by June 2008 for UD PF TD hospital vaccine sales, market share in excess of 20%.

Our MDV of TD vaccine is primarily sold to office based physicians, clinics and public health. Currently, Distributors are our primary means of reaching this market and most every one of them now purchase this vaccine from us.

Distributors continue to exhaust past inventories of this vaccine, remaining inventories include expiration dates of June and July.

We expect to see an increase in distributor orders in the 2^nd quarter. Since the beginning of the second quarter we have received orders in excess of $2 million of MDV from distributors. On April 19^th we submitted the CDC bid for MDV TD vaccine, last year approximately 1.2 million doses of TD Vaccine were sold to State and County public health departments through this award. The award takes effect July 1, we expect to win the award because we are the only distributor that has an authorizing letter from our manufacturer and one year expiration dating, two necessary requirements to receive the award from CDC. We will service this award directly and not through distributors.

We still have approximately $13 million of MDV inventory, (approximately 1.2 million doses) from our initial $20 million inventory buy (2 million doses) but expect to liquidate and sell this inventory over the course of the year. At that time we will begin the transition to the UD PF TD vaccine for the office based physician market. Because of the higher gross margins for that product this has always been our intent and strategy for this exclusive vaccine agreement.

Our contract pharma manufacturing business segment generated revenues of $1.6 million and we expect this business segment to grow substantially over the next several quarters. The second quarter will see a modest revenue increase over the first quarter, we expect 2Q revenues to be approximately $2 million since we began shipping our ketotifen ANDA ophthalmic product under a branded label for another large pharma ophthalmic company. The second half of the the year, is expected to generate sales that approximate a proforma $14 million annual sales run-rate, primarily due to the launch of Advanced Vision Research previously announced product, Theratears. More importantly, three as yet, unannounced contract pharma business partnerships could serve to double revenues, in 2009, bringing our total contract pharma business to over $20 million on an annual basis. To that end, today we signed a development agreement in excess of $600,000 with one of these three companies to develop two ophthalmic OTC products.

When commercialized in December 2008, this relationship is expected to generate an additional six million annual manufactured units in our Illinois facility and approximately $8.4 million in new annual revenue.

We continue to actively seek lyophilization business and are ready to both develop and fill/finish lyophilized products for customers.

Before Jeff presents his financial presentation I would like to discuss several specific areas of our P&L statement.

Gross margins improved by 5 points to 26% over the prior year period and gross profit dollars increased by 48% to $3.7 million. Several factors contributed to this, a favorable product mix and IC-Green revenues reflecting our historical run rate helped. Although vaccines typically have a lower gross margin percentage associated with their sale, and will tend to lower our gross margin % as their sales grow, we believe gross margins in our two manufacturing plants are beginning to improve.

Our New Jersey facility is at capacity on a one-shift basis. We are now at a point where we can shift our manufactured products to a higher gross margin mix with the addition, of Ketotifen, Diclofenac and Akten.

This will result in a standard margin improvement of 12 points from the 1^st to the 2^nd quarter for this facility. In our Illinois facility efficiency and cost cutting measures are in place, although our Illinois plant still suffers from a lack of new product introductions. This is why our new contract pharma opportunities are important combined with the anticipated ANDA approval for a Schedule II narcotic in the second half of 2008. In the Illinois facility

we will be able to adjust our product mix for ophthalmic production in the second half of 2008, just as we did in the New Jersey facility. Injectable production will be helped by additional narcotic production but will remain a challenge until new lyophilization business is developed.

SG & A expenses totalled $6.3 million and increased $1 million over the prior year period. We estimate that SG & A for the remainder of the year will be approximately $6.0 million per quarter. The increase over the prior year is due in large part to the expansion of our sales teams. We currently have 65 sales representatives.

Our Sales coverage overlaps in our business segments and provides us with 54 reps selling vaccines, 24 reps selling hospital drugs and injectables, and 33 reps selling ophthalmic drugs. We also have two reps managing our contract pharma business unit. At this time and for the foreseeable future, our sales team expansion is complete.

Research and development expenses totalled $2.4 million in the first quarter. To better help you understand our true run-rate, quarterly in-house R&D expenses are approximately $1.15 million.

In the first quarter we wrote off two previously capitalized fees and paid for fees totaling $1.25 million reflecting the expense associated with an FDA filing fee and a milestone-licensing fee. For the second quarter our R&D expenses will approximate $1.5 million, $1.15 million of in-house costs and $340,000 of partnership milestone fees.

I will now turn the presentation over to Jeff for a more detailed financial presentation.

EX-99.3

Exhibit 99.3

Thank you, Art, and good afternoon ladies and gentlemen.

Total revenue for the first quarter 2008 was $14.5 million, versus $11.7 million in the first quarter 2007. The year-over-year increase is principally due to improved product sales in our Ophthalmic and Hospital Drugs and Injectables business segments. During the first quarter 2008, Ophthalmic and Hospital Drugs and Injectables business segment revenues (excluding DTPA) increased by approximately $1.7 million or 41% and $0.8 million or 21%, respectively, versus the prior year comparative period. In our Ophthalmic business segment, net revenues were $6.0 million vs. $4.2 million for Q1’07, and reflect strong sales of our diagnostic products, primarily IC-Green, which now reflects its historical run rate. The Hospital Drugs and Injectables business segment net revenues were $5.0 million vs. $4.2 million for Q1’07, led by greater hospital contract compliancy and increased sales of high-margin antidote sales.

The Company recorded DTPA product revenues of $1.2 million in the first quarter 2007 and negligible DTPA product revenue in the first quarter 2008. The Company also recorded Vaccine revenues of approximately $1.8 million in the first quarter 2008, which reflect the launch of our unit dose preservative free Tetanus Diphtheria Vaccine to the hospital market. The Contract Services business segment net revenues were $1.6 million vs. $2.1 million in the comparative prior year period, a decline of $0.4 million.

Gross profit for the first quarter 2008 was $3.7 million as compared to $2.5 million in the first quarter 2007. The aggregate increase in first quarter 2008 gross profit of approximately $1.2 million versus the comparative prior year period was due to a favorable product mix of Ophthalmic and Hospital Drugs and Injectables. Sequentially, first quarter 2008 gross margin improved to 25.9% versus the fourth quarter 2007 gross margin of 22.3%. Lower Contract Services business segment volumes resulted in reduced revenues albeit at higher margins. However, manufacturing yields at our Decatur, IL manufacturing facility improved year-over-year, which resulted in a lower plant variance.

Selling, general and administrative expenses totaled $6.3 million in the first quarter 2008, an increase of $1.0 million over the comparative prior year period. This increase is primarily due to the expansion of our Sales Team from 30 to 65 representatives. The expansion of our Sales Team was necessary for the launch of our two Vaccine products, Td and Flu, and our anticipated product approvals and subsequent launches of our Ophthalmic NDA, Akten™, and our ANDA for generic Vancomycin capsules.

Research and development expenses were $2.4 million in the first quarter 2008 versus $2.0 million in the comparative prior year period, and increased due to the expensing of a previously capitalized and paid-for licensing fee and FDA filing fee.

The net loss for the first quarter 2008 was $5.5 million or $0.06 per fully diluted share, vs. the net loss of $4.8 million in the first quarter 2007 or $0.06 per fully diluted share. The March 31, 2008 fully diluted share count for the Company is 94.2 million, which assumes stock options and warrants are outstanding for the full year rather than on a weighted average basis.

I would now like to draw your attention to the Balance Sheet. As of March 31, 2008, the Company had cash and cash equivalents equal to $3.4 million, plus approximately $3.7 million of undrawn upon availability under our Credit Agreement with our commercial banker, the Bank of America, formerly the LaSalle Bank. We also have a restricted cash account balance of $3.3 million. Our relationship with the Bank of America can be best characterized as excellent and supportive. We are in full compliance with all of our financial covenants as of March 31, 2008.

To date, we have used our Revolver with the Bank of America to fund our investment in Td Vaccines. As of March 31, 2008, our carrying value on the balance sheet for both the unit dose and the multi dose Td Vaccine totaled approximately $19 million. However, we expect vaccine shipments to accelerate in the second quarter 2008 for two reasons:

1.	Akorn is the only MDV supplier of Td-Vaccines in the marketplace with product dating greater than 12 months.
2.	Distributors will be exhausting their on-hand MDV vaccine inventories.

We believe that as vaccine inventories turnover, we will be cash flow positive in the second half of 2008 and will have sufficient working capital to meet our business requirements this year.

Finally, I would like to briefly review the Statement of Cash Flows. During the first quarter 2008, we invested a total of $269,000, in machinery and equipment for our Somerset, NJ manufacturing facility and our Center for Excellence located in Gurnee, IL, and for validation efforts associated with our Decatur, IL lyophilization facility.

We are also pleased to announce that our 2008 annual meeting of shareholders of Akorn, Inc. will be held at 10:00 AM, local time, on May 22, 2008 at the Arizona Biltmore Resort located in Phoenix, AZ.

Thank you for your time and attention. I will now turn the teleconference back to Art.