Mallinckrodt revises plans for generic business spin-off
In a previous announcement on the formation of two separate branded and generics businesses, the company had stated that Amitiza (lubiprostone) would join the portfolio of the latter company to “add manufacturing facilities and employees,” as well as diversifying revenues.
In its most recent update, the company noted that because its specialty generics business had returned to growth, there was no longer the need to add the product to the generics portfolio.
The specialty generics business was able to report net sales of $190m (€169m), an increase of 3.5% against the previous year, which allowed the company to raise guidance for full-year 2019 results to a projected net increase of sales of between 2-5%.
In addition, the company announced that the specialty branded company would be known as Sonorant Therapeutics, whilst the generics business would be known as Mallinckrodt, as had previously been stated.
Mark Trudeau, CEO of Mallinckrodt and soon-to-be CEO of Sonorant, explained, “When we announced our intent to separate the specialty generics business through a spin-off in December 2018, we noted the final allocation of assets between the two companies could change.”
“Our goal from the outset has been to establish two new, appropriately capitalised, independent companies well-positioned to unlock and increase value over the long term,” he continued.
Updates were also provided on the board members of the generics business, notably seeing Eric Slusser become CFO and James Sulat become the chairman of the generics company.
Both companies will carry debt through into inception, with the specialty generic company anticipated to raise a debt of approximately $300m and the specialty brand carrying debt of $2.5bn – though Bryan Reasons, CFO of the company, stated that it aims to reduce net debt by $1bn through free cash flow and spin-off proceeds.
The target for the separation of the two business is for the process to be completed in the second half of 2019.
