Mallinckrodt Forks Out $2.3 Billion for Respiratory Drug and Device Maker Ikaria

Published: Mar 06, 2015

Mallinckrodt (MNK) Forks Out $2.3 Billion for Respiratory Drug and Device Maker Ikaria
March 5, 2015
By Krystle Vermes, Breaking News Staff

Biopharmaceutical company Mallinckrodt Pharmaceuticals announced today that it has acquired Ikaria Inc., for $2.3 billion. The transaction will be finalized by the second quarter of 2015, which is Mallinckrodt’s fiscal third quarter.

As a result of this transaction, a minimum of $150 million in net sales will be added to Mallinckrodt’s total for the 2015 fiscal year. Ikaria, a global critical care company, focuses on the development and commercialization of therapies for infant patients in hospital neonatal intensive care unit settings.

"This transaction demonstrates our ongoing commitment to transform Mallinckrodt into a leading, high-performing specialty biopharmaceutical company with a diverse and durable portfolio," said Mark Trudeau, president and chief executive officer of Mallinckrodt. "We continue to move decisively in line with our strategic roadmap building on key growth platforms and using our unique ability to manage complexity to unlock untapped additional value from diverse products and environments.”

Ikaria will bring diversity to Mallinckrodt’s pipeline with terlipressin, a product being investigated for the treatment of Hepato-Renal Syndrome Type 1, which has no approved therapy in the U.S.

“With this expansion into respiratory neonatal critical care we expect to further broaden our touch points in the hospital market, and at the same time diversify our portfolio with durable assets that play vital roles in the treatment of vulnerable patient populations,” Trudeau continued.

Adding to the List of Acquisitions
This is not the first company that Mallinckrodt has acquired to grow its portfolio. In August 2014, it finalized a deal to acquire Questcor Pharmaceuticals, Inc. , for a total of $5.8 billion. As a result, Mallinckrodt gained access to Questcor’s H.P. Acthar Gel, an injectable drug approved by the U.S. Food and Drug Administration (FDA) for 19 different indications.

"We are pleased to complete this transformative transaction and believe it will provide a strong, durable, well-diversified and sustainable platform, capable of generating significant future revenue and earnings growth for Mallinckrodt shareholders," Trudeau said at the time of the announcement. "We are confident that Acthar will be a strong complement to Mallinckrodt's broadening portfolio of leading specialty pharmaceutical brands, and we look forward to leveraging our extensive manufacturing and scientific expertise, as well as our experience with advocacy and payer communities, to capitalize on the many opportunities it presents."

Some of the conditions the gel has been approved for include acute exacerbations of multiple sclerosis and infantile spasms.

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Last week controversy erupted over the compensation package for Sanofi’s new CEO, Olivier Brandicourt, with several French government officials decrying the amount, calling it "incomprehensible." Brandicourt could walk off with as much as $4.5 million in a “golden handshake” payment in addition to making $4.76 million a year. That base figure is comprised by a fixed annual salary of $1.36 million a year, which is supplemented by a performance-related bonus of between 150 to 250 percent, as well as stock options and performance shares.

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