Corporate Banner
Satellite Banner
Scientific Community
Become a Member | Sign in
Home>News>This Article

Mallinckrodt Pharmaceuticals to Acquire Questcor for $5.6B

Published: Tuesday, April 08, 2014
Last Updated: Tuesday, April 08, 2014
Bookmark and Share
Combined company expected to deliver sustainable growth built on a more diversified product platform of novel therapeutics.

Mallinckrodt plc and Questcor Pharmaceuticals, Inc. announced that they have entered into a definitive merger agreement under which Mallinckrodt will acquire Questcor in a transaction valued at approximately $5.6 billion. The transaction was unanimously approved by the Boards of Directors of both companies. Subject to customary closing conditions, the transaction is currently expected to be completed in the third calendar quarter of 2014.

Under the terms of the transaction, Questcor shareholders will receive $30.00 per share in cash and 0.897 Mallinckrodt shares for each share of Questcor common stock they own, for a total approximate consideration of $86.10 per Questcor share. Following completion of the merger,  Mallinckrodt shareholders will own approximately 50.5% and former Questcor shareholders will own approximately 49.5% of the combined company's stock. Based on the closing price of Mallinckrodtand Questcor on April 4, 2014, the total per share consideration represents a premium of approximately 27% per share over Questcor's stock price, and a premium of approximately 33% over Questcor's trailing 20-trading-day volume-weighted average price.

Highlights of Transaction

• With transaction, Mallinckrodt is expected to be 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.

• Transaction expected to be immediately accretive to Mallinckrodt's fiscal year 2014 adjusted diluted earnings per share; expected to be significantly accretive in fiscal year 2015.

• With strong cash generation, Mallinckrodt is expected to be well positioned to decrease the combined company's leverage over time.

• Questcor's high-growth H.P. Acthar® Gel is expected to be a strong complement to Mallinckrodt's broadening growth portfolio of leading specialty pharmaceutical brands, including OFIRMEV®, EXALGO® and XARTEMIS™ XR. Acthar generated net sales for Questcor of $761.3 million in calendar 2013, up 49.6% from calendar 2012. 

• Acthar is approved by the U.S. Food and Drug Administration (FDA) for 19 indications, many of which are associated with the treatment of autoimmune and inflammatory conditions.

• Questcor commercial operations will function as a separate business unit within Mallinckrodt's Specialty Pharmaceuticals segment.

Mark Trudeau, President and Chief Executive Officer of Mallinckrodt, said, "We believe this 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."

"After significant due diligence, we have concluded that Questcor is another ideal strategic fit with Mallinckrodt," Trudeau continued. "Questcor's expertise and proprietary manufacturing know-how has allowed the company to provide patients with a unique product that addresses some of the most complex and challenging therapeutic areas within specialty medicine. Acthar is increasingly being employed by specialty physicians in the treatment of a range of serious, difficult-to-treat autoimmune and inflammatory conditions, where patients often have exhausted other good therapeutic options. With the exceptional talent and expertise Questcor brings, combined with the financial strength, portfolio breadth and geographic reach of the combined company, we believe we are now well on our way to becoming a leader in the development and commercialization of specialty therapeutics around the world."   

Don M. Bailey, President and Chief Executive Officer of Questcor, said, "This transaction will create substantial value for our shareholders, employees, customers and patients. The cash and equity structure of the merger will allow our shareholders to realize significant and immediate value, and with approximately 49.5% ownership of the combined company our shareholders will also be able to participate in the growth and value creation that we believe the combined company is poised to deliver."

"Like Questcor, Mallinckrodt has significant experience and expertise in managing medicines in highly regulated, complex markets," Bailey continued. "I strongly believe Mallinckrodt is the right partner to support the continued growth of Acthar in the highly specialized markets that we serve. The increased cash flow and scale of operations of a combined Questcor/Mallinckrodt organization will provide an even stronger platform to support the expansion of Acthar into new therapeutic areas. Questcor commercial operations will function as a separate business unit within Mallinckrodt, and given the complementary nature of our businesses and product portfolios we expect this to be a seamless transaction. We look forward to becoming an important part of this exciting new company." 

Further Information
Access to this exclusive content is for Technology Networks Premium members only.

Join Technology Networks Premium for free access to:

  • Exclusive articles
  • Presentations from international conferences
  • Over 2,800+ scientific posters on ePosters
  • More than 4,000+ scientific videos on LabTube
  • 35 community eNewsletters

Sign In

Forgotten your details? Click Here
If you are not a member you can join here

*Please note: By logging into you agree to accept the use of cookies. To find out more about the cookies we use and how to delete them, see our privacy policy.

Scientific News
Exploring the Causes of Cancer
Queen's research to understand the regulation of a cell surface protein involved in cancer.
Ancient Viral Molecules Essential for Human Development
Genetic material from ancient viral infections is critical to human development, according to researchers at the Stanford University School of Medicine.
Tardigrade's Are DNA Master Thieves
Tardigrades, nearly microscopic animals that can survive the harshest of environments, including outer space, hold the record for the animal that has the most foreign DNA.
The Secret Behind the Power of Bacterial Sex
Migration between different communities of bacteria is the key to the type of gene transfer that can lead to the spread of traits such as antibiotic resistance, according to researchers at Oxford University.
Farming’s in Their DNA
Ancient genomes reveal natural selection in action.
GMO Food Animals Should be Judged by Product, Not Process
In a world with a burgeoning demand for meat, milk and eggs, regulatory policies around the use of biotechnologies in agriculture need to be based on the safety and attributes of those foods rather than on the methods used to produce them, says a UC Davis animal scientist.
Enzyme Critical to Maintaining Telomere Length Discovered
New method expected to speed understanding of short telomere diseases and cancer.
Gene Drive Reversibility Introduces New Layer of Biosafety
Ability to introduce or reverse the spread of genetic traits through populations could one day improve pest management and disease control.
RNA-Based Drugs Give More Control Over Gene Editing
CRISPR/Cas9 gene editing technique can be transiently activated and inactivated using RNA-based drugs, giving researchers more precise control in correcting and inactivating genes.
University of Glasgow Researchers Make An Impact in 60 Seconds
Early-career researchers were invited to submit an engaging, dynamic and compelling 60 second video illuminating an aspect of their research.
Skyscraper Banner

Skyscraper Banner
Go to LabTube
Go to eposters
Access to the latest scientific news
Exclusive articles
Upload and share your posters on ePosters
Latest presentations and webinars
View a library of 1,800+ scientific and medical posters
2,800+ scientific and medical posters
A library of 2,500+ scientific videos on LabTube
4,000+ scientific videos