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

UP­DAT­ED: Akcea’s top 3 C-suite ex­ecs are chopped out as Io­n­is sends in an in­ter­im quar­ter­back from their bench

The top 3 execs running Ionis’ majority-owned spinoff Akcea are hitting the exit in a surprise twist Monday morning.

Akcea $AKCA reported this morning that CEO Paula Soteropoulos, President Sarah Boyce and COO Jeffrey Goldberg are out in a clean sweep. The board has placed Damien McDevitt — the chief business officer on the mother ship — in the interim chief executive spot as they hunt for some permanent replacements. Michael J. Yang and Joseph ‘Skip’ Klein III, meanwhile have joined the company’s board of directors,

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Irene Frachon at the courthouse. (Michel Euler via AP Images)

Servi­er be­gins manslaugh­ter tri­al over weight loss drug

French pharma Servier begins trial today, as the company stands accused of manslaughter and deceit over a diabetes weight loss drug linked to as many as 2,000 deaths.

The drug, Mediator (benfluorex), was pulled out of French pharmacies in 2009 after 33 years on the market. A year later, the French medicine safety agency announced the drug was suspected of causing multiple deaths, sparking outrage, a criminal investigation and a series of reforms to the country’s system of regulating the pharmaceutical industry.

As­traZeneca vet heads to UK biotech as the new CSO; Mallinck­rodt touts pos­i­tive PhI­II da­ta

→ UK-based early cancer detection company Oncimmune Holdings has welcomed Tariq Sethi as CSO, Matthew Luttrell as CMO and Cléa Rosenfeld as head of investor relations. Sethi is a professor of respiratory medicine at King’s College London. Before jumping on board at Oncimmune, Sethi was chief physician-scientist, vice president in the clinical discovery unit at AstraZeneca. He is also the founder of Galecto Biotech. Luttrell joins the company after a stint as head of hematology, growth and emerging markets at Shire (now Takeda). He’s served in other roles at Eli Lilly, Novo Nordisk, Gilead, and GSK. Rosenfeld brings experience to her new role from her time as head of investor relations at Shire, where she helped bring the company from a FTSE 250 Company to a top 50 FTSE company.

FDA puts the brakes on a rare dis­ease biotech’s PhI­II as reg­u­la­tors wait for an up­date — shares crum­ble

Little Abeona Therapeutics $ABEO is back in trouble this morning.

The biotech reported that the FDA is slamming the brakes on their Phase III study of EB-101 for rare cases of recessive dystrophic epidermolysis bullosa, which is characterized by fragile skin that blisters quickly.

The drug uses gene transfer to deliver COL7A1 genes into a patient’s own skin cells, which are then put back into the patient’s skin for improved wound healing. It has RMAT and breakthrough status at the FDA but doesn’t have approval for the Phase III.

A long-suf­fer­ing Clo­vis makes a leap in­to ra­dio­phar­ma­ceu­ti­cals, pay­ing $12M in cash to beef up the pipeline

In the 17 months since Clovis won an approval for their PARP drug Rubraca, the reality of anemic sales revenue against a backdrop of major league competition has crushed its shares and raised doubts about its future. So now it’s going about the business of adding new candidates to the pipeline that might help inspire some renewed enthusiasm for the company.

Monday morning Clovis reported that it is handing over $12 million in upfront payments to Berlin-based 3B Pharmaceuticals to nab rights to preclinical radiopharmaceuticals. And the Boulder, CO-based biotech says it plans to steer the first drug to the clinic in the second half of next year.

UP­DAT­ED: Here comes the oral GLP-1 drug for di­a­betes — and No­vo Nordisk wants to price Ry­bel­sus 'at a sim­i­lar lev­el as Ozem­pic'

Novo Nordisk’s priority review voucher on oral semaglutide has paid off. The FDA approval for the GLP-1 drug hit late Friday morning, around six months after the NDA filing.

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As Nas­daq en­rolls the fi­nal batch of 2019 IPOs, how have the num­bers com­pared to past years?

IGM Biosciences’ upsized IPO haul, coming after SpringWorks’ sizable public debut, has revved up some momentum for the last rush of biotech IPOs in 2019.

With 39 new listings on the books and roughly two more months to go before winding down, Nasdaq’s head of healthcare listings Jordan Saxe sees the exchange marking 50 to 60 biopharma IPOs for the year.

“December 15 is usually the last possible day that companies will price,” he said, as companies get ready for business talks at the annual JP Morgan Healthcare Conference in January.

That won’t come close to the record-setting numbers last year — the government shutdown at the beginning of the year was partly to blame — but it’s good enough to be at least on par with the few years before.

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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.

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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.

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