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GEN News Highlights : Feb 11, 2014
Mallinckrodt Acquiring Cadence Pharma for $1.3B
Mallinckrodt Pharmaceuticals plans to acquire Cadence Pharmaceuticals for about $1.3 billion, in a deal the buyer said will help it broaden its specialty pharma offerings and expand its business into hospitals, the companies said today.
Cadence markets a single prescription drug, Ofirmev (acetaminophen injection), which is indicated for managing mild to moderate pain, managing moderate to severe pain with adjunctive opioid analgesics, and reducing fever. Sales of Ofirmev are expected to have more than doubled in 2013, to $110.5 million compared to $50.1 million in 2012.
“Ofirmev’s growth is driven by an expanding base of physicians who are prescribing the product for an increasing number of surgical patients, and we believe the product will be an outstanding addition to the brands component of Mallinckrodt’s specialty pharmaceutical segment,” Trudeau said.
Mallinckrodt wants to add Ofirmev to a specialty portfolio that features both core controlled-substance generics and branded drugs that include the opioid Exalgo® (hydromorphone HCI) for managing moderate to severe pain, Gablofen® for managing severe spasticity of cerebral or spinal origin in patients age 4 years and above, and Pennsaid® (diclofenac sodium topical solution) 2% for osteoarthritis pain in the knee, which was commercially launched just yesterday.
That portfolio could expand over time with two additional branded treatments—the oxycodone-acetaminophen combination acute-pain drug Xartemis™ XR, whose NDA review was extended by the FDA in November by 90 days; and MNK-155, an extended-release oral hydrocodone and acetaminophen combination whose NDA is expected to be submitted in the second half of this year after reporting positive results from a Phase III clinical trial in December.
“The acquisition of Cadence Pharmaceuticals is consistent with our goal of becoming a leading global specialty pharmaceuticals company,” Mark Trudeau, Mallinckrodt’s CEO and president, said in a statement.
Because of Cadence’s strong presence in the hospital market, Mallinckrodt reasons that the acquisition adds another potential growth dimension for specialty pharma, providing the combined company with an opportunity to expand its reach and penetration.
The deal, to be carried out by a Mallinckrodt subsidiary, is expected to close in March and is subject to customary terms and conditions, including Cadence shareholders tendering a majority of the company’s outstanding shares, and expiration or termination of the waiting period under the Hart Scott Rodino Antitrust Improvements Act.
At $14 per share, Mallinckrodt will pay a 32% premium to the average price of $10.62 per share for Cadence over the previous 30 trading days. Mallinckrodt said the deal will immediately add to its adjusted diluted earnings per share for fiscal year 2014, and add “significantly” to its FY 2015 adjusted diluted earnings per share.
Mallinckrodt employs approximately 5,500 people worldwide, and has a commercial presence in roughly 70 countries. The company generated $2.2 billion in revenue during FY 2013, which ended September 27.
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