Mallinckrodt Coughs Up $1.325 Billion for Therakos
August 10, 2015
By Mark Terry, BioSpace.com Breaking News Staff
Chesterfield, UK-based Mallinckrodt plc (MNK) announced it will acquire Therakos Inc. for about $1.325 billion from Los Angeles-based The Gores Group, an investment firm.
The Gores Group bought Therakos from Ortho Clinical Diagnostics, formerly a unit of Johnson & Johnson , in December 2012. Mallinckrodt reported net sales of $2.54 billion in 2014, and focuses on drugs for autoimmune and rare diseases and medical imaging technology.
Therakos, headquartered in West Chester, Penn., focuses on autologous immune cell therapy using its extracorporeal photopheresis (ECP) technology. The technology has been approved by the U.S. Food and Drug Administration (FDA) for the treatment of skin manifestations of cutaneous T-cell lymphoma (CTCL) in patients who haven’t responded to other treatment. It is widely approved worldwide for ECP in a number of conditions, including CTCL, Graft Versus Host Disease, Crohn’s disease, and solid organ transplants.
“This transaction demonstrates our ongoing commitment to building a strong, highly profitable Hospital growth business as we build and diversify Mallinckrodt’s Specialty Brands portfolio,” said Mark Trudeau, president and chief executive officer of Mallinckrodt in a statement. “In expanding our Hospital portfolio we continue to move decisively in line with our strategic roadmap. And we believe we will be able to unlock untapped value in Therakos—making ECP treatment accessible to more patients in more hospitals by applying some of the innovative contract, service and customer intimacy principles that have been so successful with our INOMAX (nitric oxide) for inhalation.”
INOMAX is used to treat hypoxic respiratory failure in infants.
In April 2015 Mallinckrodt acquired Ikaria Inc. for $2.3 billion. This too expanded the company’s presence in the hospital market. “This latest transaction continues the rapid transformation of Mallinckrodt into a leading specialty biopharmaceutical company and demonstrates our ongoing commitment to driving revenue and earnings growth for shareholders and delivering value for patients,” said Trudeau in a statement. “In the last 20 months we’ve not only grown quickly, but we’ve substantially shifted our business focus and created rich new specialty pharmaceutical growth platforms for the future.”
The Mallinckrodt-Therakos deal broads the company’s specialty brands portfolio. The Therakos commercial team will be integrated into the company’s current critical care structure within the Hospital Specialty Brands business. It expects to help sales of Therakos products with its already experienced teams.
has been on a fairly consistent rise for the last year. Shares traded for $72.17 on Aug. 20, 2014, rose to $99.52 on Dec. 19, 2014, and jumped to $132.51 on Mar. 18, 2015. It took a drop on April 30, 2015 to $113.18, rose back to $129.19 on June 2, 2015, and traded for $123.96 on July 31, 2015 before taking a drop to $98.82, where it is currently trading.
The Street reported that Trade-Ideas LLC on Aug. 4, 2015, referred to the company stock as “water-logged and getting wetter.” These are typically stocks that are worthwhile, but are behaving strangely. The Street wrote, “Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, ‘support’ while at the same time the range of the stock’s movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.”
TheStreet Quant Ratings gives the company a “buy” rating, noting strong revenue growth, a solid financial position, reasonable debt levels, good cash flow, and solid stock price performance.