Mallinckrodt Will Sell RECOTHROM® And PREVELEAK® To Baxter
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- Published on Tuesday, 09 January 2018 10:26
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-- Sale of hemostasis products reflects further refinement of MNK portfolio and strategy --
-- Total consideration of $185 million, with $153 million upfront, including existing inventory, and the remainder in potential milestone payments --
-- Transaction supports Mallinckrodt's transformation to an innovation-driven specialty pharmaceutical growth company focused on improving outcomes for patients with severe and critical conditions --
STAINES-UPON-THAMES, UK I January 8, 2018 I Mallinckrodt plc (NYSE: MNK), a leading specialty pharmaceutical company, announced today it has entered into an agreement under which it will sell certain hemostasis products to Baxter International Inc. (NYSE: BAX) for approximately $185 million, with upfront payment of $153 million, inclusive of existing inventory, and the remainder in potential future milestones. Baxter will assume other expenses, including contingent liabilities associated with PREVELEAK®. Baxter is a global medical products company that is committed to advancing surgical innovation with a variety of products and delivery devices used in the surgical suite.
RECOTHROM® Thrombin topical (Recombinant) and PREVELEAK® Surgical Sealant, both products for use in the control of bleeding in the surgical suite, are included in the transaction, as well as the manufacturing operation for PREVELEAK. The products will complement and broaden Baxter's current portfolio of hemostats and sealants, offering surgeons additional products to address patients' varying needs.
"Mallinckrodt is transforming itself to become a top-performing specialty pharmaceutical company," said Mark Trudeau, President and Chief Executive Officer of Mallinckrodt. "We're increasing our focus on innovative medicines and therapies like terlipressin and StrataGraft®, and recently acquired products stannsoporfin, xenon gas and OCR-002 – as well as, at the potential close of the Sucampo acquisition, VTS-270 and CPP-1X – that can make a real difference in patient populations with very high unmet medical needs. With this evolving emphasis on a development portfolio of treatments for seriously ill infants and adults, these hemostasis products are now less strategic for us."
In the twelve months preceding September 29, 2017, Mallinckrodt's net sales of hemostasis products were $56.2 million, substantially all of which related to RECOTHROM and PREVELEAK. The sale of the two products to Baxter does not qualify for GAAP1 treatment as a discontinued operation, and therefore historical sales and earnings results will not be recast to reflect the divestiture. The sale is anticipated to dilute Mallinckrodt's adjusted diluted earnings per share by $0.10 to $0.15 in 2018, which will be offset by shares repurchased during the fourth quarter 2017. Proceeds from the sale will be used by the company toward paying down debt.
Mallinckrodt will retain RAPLIXA® (Fibrin sealant (human)) for topical use and is evaluating strategic options for this product. Due to its shift in focus to the critical care, autoimmune and rare disease spaces, the company will discontinue marketing of the product upon close of the Baxter transaction. As a result, a write-off for this product will be reported for the fourth quarter 2017.
Mr. Trudeau concluded, "Mallinckrodt will continue to proactively shape and refine its Specialty Brands segment. Our long-term objective is to build a diversified specialty pharmaceuticals business focused on both commercialized and pipeline products for patients with severe and critical conditions. We are creating a rich development portfolio of innovative, cutting-edge new treatments and plan to bring them successfully to market. When products become non-core or can potentially better flourish in the hands of others, we will divest them – freeing us to acquire and focus on products more closely aligned with our long-range strategic growth goals."
The closing of the transaction is subject to the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions. Mallinckrodt expects to complete the transaction in the first half of 2018.
RECOTHROM, Thrombin topical (Recombinant), is a topical thrombin indicated to aid hemostasis whenever oozing blood and minor bleeding from capillaries and small venules is accessible and control of bleeding by standard surgical techniques (such as suture, ligature, or cautery) is ineffective or impractical in adults and pediatric populations greater than or equal to one month of age.
PREVELEAK Surgical Sealant is indicated for use in vascular reconstructions to achieve adjunctive hemostasis by mechanically sealing areas of leakage.
RAPLIXA is a fibrin sealant (human) indicated as an adjunct to hemostasis for mild to moderate bleeding in adults undergoing surgery when control of bleeding by standard surgical techniques (such as suture, ligature, and cautery) is ineffective or impractical. RAPLIXA is used in conjunction with an absorbable gelatin sponge (USP).
Mallinckrodt is a global business that develops, manufactures, markets and distributes specialty pharmaceutical products and therapies. Areas of focus include autoimmune and rare diseases in specialty areas like neurology, rheumatology, nephrology, pulmonology and ophthalmology; immunotherapy and neonatal respiratory critical care therapies; and analgesics. The company's core strengths include the acquisition and management of highly regulated raw materials and specialized chemistry, formulation and manufacturing capabilities. The company's Specialty Brands segment includes branded medicines and its Specialty Generics segment includes specialty generic drugs, active pharmaceutical ingredients and external manufacturing. To learn more about Mallinckrodt, visit www.mallinckrodt.com.
1 Generally accepted accounting principles in the U.S.
SOURCE: Mallinckrodt plc