- Mallinckrodt has agreed to sell its intrathecal therapy unit to Indian life sciences company Piramal Enterprises in a transaction worth up to $357 million.
- Piramal Critical Care, a U.K. subsidiary of the buyer, will pay $171 million at the close of the deal, which should be before the end of the first quarter, and $154 million more exactly one year after that date. Mallinckrodt could fetch an additional $32 million depending on gross product sales.
- The intrathecal therapy business is centered on multiple dosages and delivery modes for Gablofen (baclofen injection). The drug is administered through the spine and aims to treat spasticity, which encompasses a wide range of muscle control issues, in patients aged four and up.
Mallinctrodt has been busy in the last few months ironing out its assets. Since August, the company inked agreements with Intellipharmaceutics for access to central nervous system (CNS) drugs and IBA Molecular to unload its nuclear imaging business, as well as an acquisition deal for skin graft company Stratatech.
"Mallinckrodt is transforming its portfolio to become a top-performing specialty pharmaceutical company, systematically divesting non-core businesses to build upon our growth platforms in autoimmune and rare diseases and hospital therapies," Mallinckrodt CEO Mark Trudeau said in a Monday statement.
Trudeau explained that, while increasingly profitable since 2012, the intrathecal unit just wasn't aligned with the future trajectory of his company's specialty pharmaceutical business. As such, the "sale of this business to Piramal is the best solution to meet patient needs and will free resources for us to invest in additional growth."
The unit's departure shouldn't have a substantial effect on Mallinckrodt's revenues. Sales from the unit totaled $44.6 million during the 2016 fiscal year, which ends Sept. 30 for Mallickrodt, while annual net sales for the company as a whole were almost $3.4 billion.
It will have an effect on earnings per share, however. The company expects a dilution of 20 cents to 25 cents per share during 2017, though it also anticipates that dilution will be offset by several factors, including a share repurchase initiative and more effective cost management.
As for Piramal, the company has also been working to expand its pipeline and portfolio. The Critical Care Unit entered a deal in October giving it access to five pain medications from Janssen. And in May, Piramal Enterprises acquired four branded products, including one pain drug, from Pfizer for about $16 million.
"This would be our 7th pharma acquisition in the last two years," Piramal Chairman Ajay Piramal said in a Jan. 30 statement. "This transaction is a step further in our strategy to make investments, in both internal developments and acquisitions, to expand our presence in the global generic hospital drug market, which is greater than $20 billion in size."