Dublin-based pharm firm Mallinckrodt in $5.6bn deal

Dublin-domiciled specialty pharmaceuticals company Mallinckrodt has agreed to buy Questcor Pharmaceuticals for $5.6 billion (€4bn) in cash and stock to add treatments for autoimmune and inflammatory diseases.

Mallinckrodt, which has its headquarters in Mulhuddart, Dublin 15 but operates from its location in Missouri in the US, will pay will $86.08 a share for Anaheim, California-based high-growth biopharmaceutical company Questcor, the companies said in a statement today. That’s 27 per cent above the April 4th closing price for Questcor.

The purchase is the second this year announced by Mallinckrodt, which is domiciled in Dublin and run from Hazelwood, Missouri. The company agreed in February to buy Cadence Pharmaceuticals for $1.3 billion.

The deal will see Mallinckrodt become an “increasingly diversified, high-growth specialty pharmaceuticals company with significantly increased scale, revenues, profitability and cash flow, creating a strong platform to deliver sustainable growth and substantial value for shareholders of both companies.”

Questcor’s H.P. Acthar Gel is approved for 19 uses, and sales of the product last year rose 50 per cent to $761.3 million.

Mark Trudeau, president and chief executive officer of Mallinckrodt, said that the transaction will provide a "strong and sustainable platform for future revenue and earnings growth, and provide exceptional value for shareholders of both Mallinckrodt and Questcor".

“It will substantially increase the scale, diversification, cash flow and profitability of our business, while expanding and enhancing the breadth and depth of our specialty pharmaceutical platform. With Questcor, combined with our recently completed acquisition of Cadence Pharmaceuticals, the new Mallinckrodt will have a significant, established presence with prescribers, payers and hospitals. We will also have an increasingly diversified specialty pharmaceuticals portfolio, which will include novel therapeutics for pain management, as well as central nervous system, renal, rheumatologic and other autoimmune and inflammatory disorders.”

Mallinckrodt was spun-off by Covidien last year, and, following other recent tax driven take overs in the sector, such as Perrigo's acquisition of Elan, it might find itself an acquisition target, given its location in Ireland.