Blog Coverage Mallinckrodt Acquires Privately Held Regenerative Skin Technology Firm

LONDON, UK / ACCESSWIRE / August 12, 2016 / Active Wall St. blog coverage looks at the headline from Mallinckrodt PLC (NYSE: MNK) as the company announced on August 10, 2016, that it has entered into an agreement with Stratatech Corp. to acquire the company which specializes in the manufacture of regenerative skin and skin substitute products. The financial details were not disclosed at the time of announcement and the deal is expected to close in the second half of 2016. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.

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Madison, Wisconsin-based Stratatech was founded in 2000 and it is a privately held regenerative medical company that specializes in production of proprietary skin substitute products for therapeutic and research uses. The products of the company are used for the treatment of severe burns, non-healing ulcers, and other complex skin defects. Having no other company manufacturing a similar quality and substitute products, Stratatech has complete dominant and leadership position in the markets it serves.

The lure for the deal

Stratatech’s second generation flagship product – StrataGraft® skin substitute is on the verge of becoming the standard for burn patients with severe burns. The uniqueness of this product is that it designed to mimic natural human skin and patients can avoid painful skin transplants as it helps regenerate the patients’ own skin.

Phase Two development of StrataGraft® is currently active and is being used for the treatment of severe and fill thickness burns. It is now entering Phase Three of clinical development and has applied for Biologic License Application (BLA) from the U.S. Food and Drug Administration (FDA) and the decision is expected by 2020. If StrataGraft® manages to get FDA approval, it would carry regulatory exclusivity through 2032.

Mallinckrodt is known for the manufacturing of specialty pharmaceuticals and biopharmaceutical products and therapies as well as nuclear imaging products. Mallinckrodt’s acquisition of Stratatech would help it diversify its business on an innovative biologic platform and expand its portfolio of hospital business. The attraction lies in the fact that this product if combined with genetic modifications and applications opens up a whole new world of exciting possibilities.

Mark Trudeau, Chief Executive Officer and President of Mallinckrodt said:

“We believe Stratatech’s technology has the potential to transform the standard of treatment for wound care. Additionally, the acquisition will bring world-class Stratatech researchers with deep expertise in cell-based, differentiated regenerative medicine to Mallinckrodt’s research team.”

Lynn Allen-Hoffmann, Chief Executive Officer of Stratatech said:

“Stratatech brings dedicated scientific and development know-how to Mallinckrodt, along with a broad, innovative progenitor keratinocyte2 technology platform. In our next phase of development, the unique cell line used to produce living tissue in StrataGraft can also be genetically modified to potentially increase production of a variety of factors to support and promote wound healing, such as antimicrobial and vascular endothelial growth factors. This could offer utility in a number of skin injury settings beyond burns.”

Financial gains

Stratatech has already entered into agreements with various federal agencies and department for manufacture and supply such as US Department of Health and Human Services, Office of Assistant Secretary for Preparedness and Response, and the Biomedical Advanced Research and Development Authority (BARDA) as well as US Department of Defense.

The market for skin graft products in the US is estimated to be around $300 million. Annually, in the US alone over 10,000 people are admitted to hospitals for treatment of severe burns. Given the unique nature of the product and its potential for commercialization within the US and abroad, Mallinckrodt is virtually sitting on a gold mine.

Stock Performance

At the close of trading session on August 11, 2016, Mallinckrodt’s shares were up 0.27%, finishing the day at $78.98. A total volume of 1.2 million shares were traded by the end of the session. The company’s stock price has surged 37.55% in the past three months and is up 5.83% on YTD basis.

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