Mallinckrodt plc MNK announced that it has completed the previously announced divestiture of its global contrast media and delivery systems (CMDS) business to Guerbet for approximately $270 million.
CMDS operations consisted of four manufacturing facilities with a comprehensive array of diagnostic imaging products engineered for computed tomography, magnetic resonance imaging, X-ray and cardiac catheterization along with urological imaging system and related components employing 1,000 people. As a result of the divestiture, the entire workforce and manufacturing facilities have been transferred to Guerbet.
We note that the company aims to reorganize its portfolio to reduce its overall cost structure and maximize profitability.
In Sep 2015, the company acquired Therakos Inc. from The Gores Group for approximately $1.3 million in order to broaden its footprint in hospitals and expand its reach in immunotherapy through extracorporeal photopheresis. The acquisition is expected to widen Mallinckrodt’s presence from multimodal surgical pain management and critical care respiratory therapies in neonatal intensive care units to include innovative immunotherapy therapies.
Mallinckrodt has transformed itself in the past two years through strategic acquisitions and revamped its portfolio. In this context, we note that the acquisition of Cadence Pharmaceuticals had added Ofirmev to the company’s specialty pharmaceuticals portfolio and, thus, expanded its pain management franchise, while Acthar Gel became part of its portfolio following the Questcor acquisition.
Meanwhile, in a bid to broaden its footprint in hospitals and expand its presence to include critical care respiratory therapies in neonatal intensive care units, Mallinckrodt acquired Ikaria, Inc. from a Madison Dearborn-led investor group and added Inomax to its portfolio.
Last week, the company reported better-than-expected results for the fourth quarter of fiscal 2015 driven by Acthar and Inomax. However, the company is facing headwinds in the form of reclassification of generic Concerta, which will continue impacting the generic segment, and increased competition for oxycodone-related products. The nuclear imaging business will also experience some disruptions due to an unplanned shutdown from one of the primary suppliers.
Mallinckrodt carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector are Mylan MYL, Corcept Therapeutics CORT, and Astellas Pharma, Inc. ALPMY. While Mylan and Corcept sport a Zacks Rank #1 (Strong Buy), Astellas Pharma carries a Zacks Rank #2 (Buy).
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