Shed­ding non-core units while load­ing up on cash, Mallinck­rodt bags $250M in CD­MO sale

Mallinck­rodt may not be spin­ning off its spe­cial­ty gener­ics busi­ness any time soon, but the UK drug­mak­er is seiz­ing every chance to shed sub­sidiaries that don’t be­long in the brand­ed drug com­pa­ny it’s keen to con­sol­i­date in­to.

Mark Trudeau

In a $250 mil­lion deal, Mallinck­rodt is sell­ing BioVec­tra, a con­tract de­vel­op­ment and man­u­fac­tur­ing or­ga­ni­za­tion in Cana­da, to the pri­vate eq­ui­ty firm HIG Cap­i­tal. Of that, $135 mil­lion is paid up­front, $40 mil­lion comes in a long-term note, and con­tin­gent pay­ments add up to $75 mil­lion.

“While we rec­og­nize the longer-term growth po­ten­tial for BioVec­tra, we be­lieve that the struc­ture of this deal en­ables us to par­tic­i­pate in the fu­ture suc­cess of the busi­ness, and there­fore we see this sale as the best op­tion for both Mallinck­rodt and BioVec­tra mov­ing for­ward,” said pres­i­dent and CEO Mark Trudeau in a state­ment.

Mallinck­rodt has se­cured an arrange­ment in which BioVec­tra will con­tin­ue to sup­ply an APR in­gre­di­ent for its spe­cial­ty brands busi­ness, the com­pa­ny added.

HIG, a $34 bil­lion play­er head­quar­tered in Mi­a­mi, sees po­ten­tial for “ro­bust or­gan­ic growth” in BioVec­tra, es­pe­cial­ly as it com­pletes an ex­pan­sion of ca­pac­i­ty span­ning mi­cro­bial fer­men­ta­tion, chem­i­cal syn­the­sis, IV/IM for­mu­la­tions and more.

The trans­ac­tion is ex­pect­ed to close in the fourth quar­ter of 2019, when Mallinck­rodt would have gone to tri­al with two Ohio coun­ties ac­cus­ing it of help­ing fu­el the opi­oid cri­sis. The com­pa­ny said a few days ago it’s reached a ten­ta­tive set­tle­ment for $24 mil­lion in cash and $6 mil­lion worth of gener­ic prod­ucts.

But with hun­dreds of oth­er law­suits to fend off — all pin­ning the blame of pro­duc­ing and dis­trib­ut­ing vast amounts of opi­oids on the SpecGx sub­sidiary it was hop­ing to sep­a­rate from — Mallinck­rodt has re­port­ed­ly hired lawyers and re­struc­tur­ing pros to ex­plore a bank­rupt­cy.

The prospect of a po­ten­tial bank­rupt­cy sent the stock $MNK down 44% last week. But in­vestors seem to be em­brac­ing to­day’s news about the sale of BioVec­tra, with shares up 12% to $2.10

A fa­vorite in Alex­ion’s C-suite is leav­ing, and some mighty sur­prised an­a­lysts aren’t the least bit hap­py about it

Analysts hate to lose a biotech CFO they’ve come to trust and admire — especially if they’re being blindsided by a surprise exit.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 59,900+ biopharma pros reading Endpoints daily — and it's free.

While No­var­tis ban­ish­es Zol­gens­ma scan­dal scars — Bio­gen goes on a Spin­raza 'of­fen­sive'

While Novartis painstakingly works to mop up the stench of the data manipulation scandal associated with its expensive gene therapy for spinal muscular atrophy (SMA) Zolgensma— rival Biogen is attempting to expand the use of its SMA therapy, Spinraza. 

The US drugmaker $BIIB secured US approval for Spinraza for use in the often fatal genetic disease in 2016. The approval covered a broad range of patients with infantile-onset (most likely to develop Type 1) SMA. 

Jason Kelly. Mike Blake/Reuters via Adobe

Eye­ing big ther­a­peu­tic push, Gink­go bags $290M to build a cell pro­gram­ming em­pire

Ginkgo Bioworks is on a roll. Days after publicizing a plan to nurture new startups via partnerships with accelerators Y Combinator and Petri, the Boston biotech says it has raised another $290 million for its cell programming platform to reach further and wider.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 59,900+ biopharma pros reading Endpoints daily — and it's free.

UP­DAT­ED: Speak­er Nan­cy Pelosi to un­veil bill for fed­er­al­ly ne­go­ti­at­ed drug prices

After months of buzz from both sides of the aisle, Speaker Nancy Pelosi will today introduce her plan to allow the federal government to negotiate prices for 250 prescription drugs, setting up a showdown with a pharmaceutical industry working overtime to prevent it.

The need to limit drug prices is a rare point of agreement between President Trump and Democrats, although the president has yet to comment on the proposal and will likely face pressure to back a more conservative option or no bill at all. Republican Senator Chuck Grassley is reportedly lobbying his fellow party members on a more modest proposal he negotiated with Democratic Senator Ron Wyden in July.

Jeff Kindler's Cen­trex­ion re­news bid to make pub­lic de­but

Jeffrey Kindler’s plan to take his biotech — which is developing a slate of non-opioid painkillers — public, is back on.

The Boston based company, led by former Pfizer $PFE chief Kindler, originally contemplated a $70 million to $80 million IPO last year— but eventually postponed that strategy. On Wednesday, the company revived its bid to make a public debut in a filing with the SEC — although no pricing details were disclosed.

David Grainger [file photo]

'Dis­con­nect the bas­tard­s' — one biotech's plan to break can­cer cell­s' uni­fied de­fens­es

Chemotherapy and radiotherapy are the current gladiators of cancer treatment, but they come with well-known limitations and side-effects. The emergence of immunotherapy — a ferocious new titan in oncologist’s toolbox — takes the brakes off the immune system to kill cancer cells with remarkable success in some cases, but the approach is not always effective. What makes certain forms of cancer so resilient? Scientists may have finally pieced together a tantalizing piece of the puzzle, and a new biotech is banking on a new approach to fill the gap.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 59,900+ biopharma pros reading Endpoints daily — and it's free.

Zachary Hornby. Boundless

'A fourth rev­o­lu­tion in can­cer ther­a­pies': ARCH-backed Bound­less Bio flash­es big check, makes big­ger promis­es in de­but

It was the cellular equivalent of opening your car door and finding an active, roaring engine in the driver seat.

Scientists learned strands of DNA could occasionally appear outside of its traditional home in the nucleus in the 1970s, when they appeared as little, innocuous circles on microscopes; inexplicable but apparently innate. But not until UC San Diego’s Paul Mischel published his first study in Science in 2014 did researchers realize these circles were not only active but potentially overactive and driving some cancer tumors’ superhuman growth.

It’s fi­nal­ly over: Bio­gen, Ei­sai scrap big Alzheimer’s PhI­I­Is af­ter a pre­dictable BACE cat­a­stro­phe rais­es safe­ty fears

Months after analysts and investors called on Biogen and Eisai to scrap their BACE drug for Alzheimer’s and move on in the wake of a string of late-stage failures and rising safety fears, the partners have called it quits. And they said they were dropping the drug — elenbecestat — after the independent monitoring board raised concerns about…safety.

We don’t know exactly what researchers found in this latest catastrophe, but the companies noted in their release that investigators had determined that the drug was flunking the risk/benefit analysis.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 59,900+ biopharma pros reading Endpoints daily — and it's free.

Mer­ck helps bankroll new part­ner Themis' game plan to fin­ish the chikun­gun­ya race and be­gin on­colyt­ic virus quest

As Themis gears up for a Phase III trial of its chikungunya vaccine, the Vienna-based biotech has closed out €40 million ($44 million) to foot the clinical and manufacturing bills.

Its heavyweight partners at Merck — which signed a pact around a mysterious “blockbuster indication” last month — jumped into the Series D, led by new investors Farallon Capital and Hadean Ventures. Adjuvant Capital also joined, as did current investors Global Health Investment Fund, aws Gruenderfonds, Omnes Capital, Ventech and Wellington Partners Life Sciences.