- Mallinckrodt said it will spin off its specialty generics business without the constipation treatment Amitiza and revise its plans for debt for the two resulting companies.
- The spinoff will become Mallinckrodt and take the MNK symbol on the New York Stock Exchange, according to a May 28 statement. It will include both specialty generics and active pharmaceutical ingredients.
- The remaining specialty brands company will be renamed Sonorant Therapeutics and will trade on the New York Stock Exchange under the SRTX ticker.
By keeping Amitiza (lubiprostone), Mallinckrodt's specialty brands business may get a buffer as the drugmaker fights a U.S. rebate decision that would cut sales for its top-seller Acthar Gel (corticotropin), used to treat multiple conditions including rheumatoid arthritis.
Amitiza brought in $184 million in 2018, while Acthar had sales of $1.1 billion.
But the company may only be exacerbating another looming problem: the onset of generic competition for both Amitiza and another product, Ofirmev, by 2021, said Stifel analyst Annabel Samimy in a note to investors.
"While we understand this short-term protective move, this only aggravates the longer-term cliff for Specialty Brands," Samimy wrote.
The company is "increasingly dependent on its clinical pipeline that remains to be proven," she added.
Also this week, Mallinckrodt announced plans for the specialty generics business to raise as much as $300 million in debt before the spinoff, with net proceeds going to the parent company. Still, the new company will end up with "significantly less debt than previously anticipated," Mallinckrodt CEO Mark Trudeau said in the company's statement.
As is, the specialty generics spinout will employ 1,600 staff in a business consisting of active pharmaceutical ingredients and generic finish dose forms. The new company will also inherit a U.S.-based manufacturing network.
Mallinckrodt said it will give more detail on historical financials for the specialty generics business in June. It's still aiming to complete the spinoff in the second half of 2019 and said reducing net debt is a top goal.
James Sulat, previously CEO of Maxygen Inc., will serve as chairman of the new specialty generics company, while Eric Slusser will be chief financial officer, Mallinckrodt said.
Matthew Harbaugh, currently president of the specialty generics business within Mallinckrodt, was previously announced as the president and CEO of the new company.