Boston, MA 04/09/2014 (wallstreetpr) – In a bid to own a share in the specialty pharmaceuticals business, Mallinckrodt PLC (NYSE:MNK) has decided to take over Questcor for $5.6 billion. The major point of interest for the former is the rights to the H.P. Acthar gel. It is an expensive drug, which sells for $30000 a vial, used in immune treatments. The sales of this drug alone generated revenue of $761.3 million for Questcor. It is forecasted to cross $1 billion in 2014 and by 2018, it is expected to have reached at least $1.8 billion. So, Mallinckrodt’s decision seems to have very long lasting implications, if it manages to keep the critics at bay.
Deal implications
The deal between the two companies is for $5.6 billion part in cash and part in stock. The stockholders of Questcor are being given a reimbursement of $30 per share along with a 0.897 share in Mallinckrodt per share owned in the former. This deal is expected to be closed in the third quarter. But, the stakeholders of the latter are not happy with the deal due to which, the stocks of the company are dealing at a low of 10% since the announcement. But this deal will help cement Mallinckrodt PLC (NYSE:MNK)’s position as a specialty pharma company, as opposed to that of its original product line for medical imaging.
Company’s prospects
Mallinckrodt PLC (NYSE:MNK) has seen to have the intention of moving away from the medical imaging products industry and carve its place in the specialty drugs market. It has already agreed to acquire Cadence Pharmaceuticals for $1.3 billion in cash, mainly for the rights to the drug Ofirmev. It is an intravenous acetaminophen which is used to manage pain. The deal is being financed from the company’s own cash reserves, and debt finance is from Barclays PLC who has also acted as an advisor for the deal.
