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PAR SENIOR VP ASHOK PATEL RESIGNS, WILL PLEAD GUILTY

Executive Summary

PAR SENIOR VP ASHOK PATEL RESIGNS, WILL PLEAD GUILTY under an agreement with the United States Attorney for the District of Maryland as an upshot of the investigation into FDA favoritism in ANDA reviews. Par announced the court action on April 17: "Patel's plea agreement provides that he will enter a guilty plea in connection with the ongoing investigation by a Federal Grand Jury into various improprieties in connection with the [FDA's] Division of Generic Drugs," Par said. Patel is "cooperating fully with the District Attorney" the statement added. In connection with the plea bargain, Patel's resignation was "accepted by Par's board of directors at a special meeting held on April 16," the company noted. A founding member of the firm, Patel is the largest shareholder in Par, holding roughly 13% of the company's common stock. Par was the first generic company to disclose receiving a subpoena from the House Commerce/Oversight Subcommittee regarding the congressional investigation into charges of ANDA review favoritism in July 1988. The firm followed that announcement with the October disclosure that it was involved in the Baltimore grand jury. In the later announcement, Par said that its injectable subsidiary Quad was also under investigation and that one executive from each corporate entity was a "target' of the grand jury probe. Patel's resignation puts a new light on the possibility of merger discussions between Par and another generic business. Par disclosed that it was in negotiations with another firm for a business combination in late January. The prospective merger partner was widely believed to be Goldline. Asked about the effect of the Patel plea on negotiations, a Goldline spokesperson declined comment.
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PS015478

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