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Mallinckrodt Closes USD 203m Sale of Intrathecal Therapy Business to Piramal Enterprises.


21 March 2017 - UK-based specialty pharmaceutical company Mallinckrodt plc (NYSE: MNK) has closed the sale of its Intrathecal Therapy business to Piramal Enterprises Ltd.'s subsidiary in the UK, Piramal Critical Care, for approximately USD 203m, the company said.

This total includes fixed and contingent consideration.

Piramal Critical Care is an integral business unit of Piramal Enterprises Ltd. and a leader in the field of anesthesia.

Mallinckrodt's Intrathecal Therapy business markets products for the treatment of spasticity via intrathecal (spinal column) drug delivery.

The key asset is Gablofen (baclofen injection), a product approved by the US Food and Drug Administration for use in management of severe spasticity of cerebral or spinal origin in adult and pediatric patients age 4 years and above.

Gablofen is the only FDA-approved baclofen in prefilled syringes and factory-sealed vials. Mallinckrodt also has a higher Gablofen concentration in late-stage development which, if approved, would help address physicians' demand for more refill options.

Both currently marketed intrathecal products and those in development are included in the transaction.

Fiscal 2016 net sales of Intrathecal Therapy products were USD 44.6m and reported as part of Mallinckrodt's Specialty Brands segment within the "Other" line.

The sale of the business 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.

This sale is expected to dilute Mallinckrodt 's 2017 earnings per share from continuing operations by between USD 0.20 and USD 0.25, with anticipated dilution declining in 2018 and beyond.

Mallinckrodt said it believes the majority of the negative earnings impact will be offset by expense management, strength of the continuing businesses and further reduction in share count through ongoing share repurchases.

The approximately USD 203 m transaction will consist of USD 171m of fixed consideration of which 10%, or USD 17m, will be paid at closing, and an additional USD 154m will be paid on the first anniversary of the close date. The remaining total consideration of up to USD 32m is contingent, based on the gross profit of the Gablofen products in 2018 and 2019.

This deal follows on the heels of Mallinckrodt's sale of its Nuclear Imaging business to IBA Molecular for approximately USD 690m.

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 and hemostasis products.

Country: UK

Sector: Pharmaceuticals

Target: Mallinckrodt/Intrathecal Therapy business

Buyer: Piramal Enterprises

Vendor: Mallinckrodt

Deal size in USD: 203m

Type: Divestment

Financing: Cash

Status: Closed

Buyer advisor: , ,


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Publication:M & A Navigator
Geographic Code:4EUUK
Date:Mar 21, 2017
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