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Apollo Global Management LLC is still in talks to buy Concordia Healthcare Corp. after two other private-equity firms walked away over concern that tighter regulatory scrutiny of pharmaceutical companies might hurt the Canadian pharmaceutical company's earnings, a person familiar with the situation said.

Apollo submitted a bid in the final round of Concordia's auction process, the person said, adding that there is no certainty that the deal would materialize.

Concordia said in a statement Thursday that its review of strategic alternatives is "ongoing." It added "there can be no assurance that any transaction will occur."

Apollo's continued interest in acquiring Concordia could alleviate investor concern that the company's strategic review might not end up with a sale. The Wall Street Journal reported Thursday that two private-equity firms, Blackstone Group LP and Carlyle Group LP, decided not to participate in the final round of bidding despite expressing initial interest in the company.

Concordia's Toronto-listed shares plunged as much as 20.9% Thursday on the news. The company's Toronto and Nasdaq-listed shares again edged lower on Friday. Its Nasdaq-listed shares closed at $26.53, while its Toronto-listed stock ended last week at 34.35 Canadian dollars.

People familiar with the situation told the Wall Street Journal last week that potential buyers had concerns that tightened regulatory scrutiny in the wake of aggressive drug pricing by Valeant Pharmaceuticals International Inc., and the resulting public outcry, may have a knock-on effect on the pharmaceutical industry and hurt Concordia's ability to sustain its profitability.

Concordia's market capitalization has shrunk as its shares shed about two-thirds of their value since September. Industry participants said at a $1.35 billion market capitalization, based on its current share price, Concordia presents cash-flush health-care investors a rare chance to put a sizable amount of capital to work. They added that the industry headwinds Concordia faces might have enticed Apollo, which has a reputation for successfully backing companies that face challenges.

Concordia, based in Oakville, Ontario, focuses on orphan drugs and legacy pharmaceutical products. The company said in April it has formed a special committee to assess "various strategic alternatives," after Bloomberg reported that Concordia hired investment bank Greenhill & Co. to run an auction process for it.

But investors who have looked at the asset said there are concerns about Concordia's ability to maintain its profitability in light of the Food and Drug Administration's efforts to create more competition in the pharmaceutical industry and curb rising drug prices.

The FDA in March said it would expedite the approval process for drug products, particularly for generics made by a single manufacturer.

There are also similar concerns about drug companies in the U.K. as authorities can set a cap on the National Health System's expenditure on branded drugs and may extend the policy to generics.

More than half of Concordia's revenue comes from the sale of generics in the U.K., thanks partly to its purchase of U.K.-based Amdipharm Mercury Co. Ltd. from European private-equity firm Cinven Ltd. for about $3.5 billion including debt.

The company said in its first-quarter earnings report that it posted $228.5 million in revenue, $139.9 million of which came from the purchase of Amdipharm. For the full year, it expects to record $1.02 billion to $1.06 billion in revenue and $610 million to $640 million in adjusted earnings before interest, taxes, depreciation and amortization this year, against 2015's $394.2 million in revenue and $265.7 million in adjusted Ebitda.

Write to Amy Or at amy.or@wsj.com

(END) Dow Jones Newswires

June 06, 2016 08:45 ET (12:45 GMT)

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