Wired News – Mallinckrodt to Acquire Sucampo Pharmaceuticals

Stock Monitor: Sucampo Pharma Post Earnings Reporting

LONDON, UK / ACCESSWIRE / December 28, 2017 / Active-Investors.com has just released a free research report on Mallinckrodt PLC (NYSE: MNK). If you want access to this report all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=MNK as the Company’s latest news hit the wire. On December 26, 2017, the Company, a leading global specialty pharmaceutical organization, entered into an agreement with another global biopharmaceutical Company, Sucampo Pharmaceuticals Inc. (NASDAQ: SCMP) (“Sucampo”), wherein Mallinckrodt agreed to acquire Sucampo, including its commercial and development assets. Register today and get access to over 1000 Free Research Reports by joining our site below:

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Active-Investors.com is focused on giving you timely information and the inside line on companies that matter to you. This morning, Mallinckrodt and Sucampo Pharma most recent news is on our radar and our team decided to put out a fantastic report on the company that is now available for free below:

www.active-investors.com/registration-sg/?symbol=MNK

www.active-investors.com/registration-sg/?symbol=SCMP

Acquisition to Bring Mallinckrodt Closer to its Vision

Mallinckrodt’s acquisition of Sucampo will take it one step closer towards its vision of becoming an innovation-driven specialty pharmaceutical growth Company focused on improving outcomes for patients with severe and critical conditions. The transaction will be accretive to near-term net sales and earnings through AMITIZA® (lubiprostone) and will also boost Mallinckrodt’s pipeline in rare diseases with VTS-270 and CPP-1X/sulindac.

Mallinckrodt to Access Sucampo’s Assets

Commercial Assets

AMITIZA® (lubiprostone) is a leading global product in the branded constipation market. It is meant for the treatment of chronic idiopathic constipation (CIC) in adults; irritable bowel syndrome with constipation (IBS-C) in women 18 years of age and older; and opioid-induced constipation (OIC) in adult patients with chronic, non-cancer pain, including patients with chronic pain related to previous cancer, or its treatment which does not require frequent opioid dosage escalation. At present, the US Food and Drug Administration (FDA) is reviewing a supplemental New Drug Application (sNDA) for AMITIZA® in children 6 to 17 years of age with pediatric functional constipation (PFC). The approval is expected in the first quarter of 2018, which would make AMITIZA® the first and only approved prescription therapy available to treat children with PFC, a condition that affects about 18% of the pediatric population. Mallinckrodt will acquire global rights to the product, with reported a 2016 global net sales of $456 million.

RESCULA (unoprostone isopropyl ophthalmic solution) 0.15% is indicated for ocular hypertension and open-angle glaucoma, and is marketed in Japan. The acquisition will provide Mallinckrodt global rights to the product, with annual net sales of approximately $9 million.

Development Assets

VTS-270 is indicated for the treatment of Niemann-Pick Type C (NPC), which is a rare, neurodegenerative, and ultimately fatal disease that can occur at any age. This rare disease affects around 2,000 to 3,000 patients globally, with about 500 cases in the US alone. At present, VTS-270 is amidst its Phase-3 trial, with the NDA filing currently expected in 2018, and approval anticipated in 2019. Mallinckrodt will acquire global rights to the therapy, whose peak net sales, if approved, are estimated to be more than $150 million.

CPP-1X/sulindac is in Phase-3 development for Familial Adenomatous Polyposis (FAP) under a collaborative agreement between Cancer Prevention Pharmaceuticals (CPP) and Sucampo. If this condition is left untreated, it could result into colorectal cancer. FAP is a rare disease that affects 1 in 10,000 people with about 30,000 cases estimated in the US. The therapy is amidst its Phase-3 trial, whose completion is expected by the end of 2018. Mallinckrodt would acquire the exclusive option to obtain North American commercial rights for a nominal fee, with CPP retaining rights to the rest of the world. Peak US potential net sales for the product are estimated to be more than $300 million.

Commercialization

Mallinckrodt looks forward to bringing VTS-270 and CPP-1X/sulindac to patients with critical unmet medical needs through its sales organizations that are focused on rare diseases. Mallinckrodt’s strong relationships with insurance companies and group purchasing organizations would enhance patient access to these unique treatment options. Besides, Mallinckrodt’s existing infrastructure of clinical and medical affairs experts will also facilitate the approval and launch of both products.

Acquisition Implies Value Creation for Sucampo’s Shareholders

Sucampo is a biopharmaceutical Company that works towards the development and commercialization of highly specialized medicines. The Company aims to offer solutions for patients affected by diseases with few or no current treatment options, and to their caregivers and physicians. Peter Greenleaf, Chairman and Chief Executive Officer (CEO) of Sucampo, believes that this transaction is proof of the hard work and dedication of Sucampo’s employees, who have worked very hard for the Company to reach this stage. He also believes that this transaction with Mallinckrodt would create significant value for shareholders. It would help accelerate the development of its rare disease assets in NPC and FAP, and enhance reach of AMITIZA® to patients suffering from constipation-related disorders, through the addition of significant resources and expertise.

Total Compensation for the Transaction

As per the agreement, Sun Acquisition Co., a subsidiary of Mallinckrodt, will initiate a cash tender offer to purchase all of the outstanding shares of Sucampo’s common stock for $18.00 per share. This implies a total transaction value of approximately $1.2 billion. This amount includes anticipated payments in respect of Sucampo’s debt.

Transaction Financing

Mallinckrodt intends to fund the transaction through borrowings under its existing revolving credit facility, a new secured term loan facility, and/or cash on hand. However, it plans to utilize its significant cash generation to ease outstanding debt over time.

Financial Implications

Mallinckrodt anticipates the transaction to be accretive to adjusted diluted earnings per share of at least $0.30 in 2018, and at least double that amount in 2019, based on the assumption of a first quarter 2018 close.

However, no guidance on the impact of the acquisition on Mallinckrodt’s GAAP35 diluted earnings per share has been shared yet, due to the inherent difficulty of forecasting the timing or amount of items that would be included in calculating such an impact.

Transaction Approvals

So far, the Boards of Directors of both Companies have approved the transaction. Sucampo’s stockholders holding about 32% of the outstanding Sucampo shares have entered into a tender and support agreement for this transaction, which is subject to customary closing conditions, including expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and the tender of a majority of the outstanding Sucampo shares.

Stock Performance Snapshot

December 27, 2017 – At Wednesday’s closing bell, Mallinckrodt’s stock slightly fell 0.85%, ending the trading session at $23.28.

Volume traded for the day: 2.56 million shares.

Stock performance in the last month – up 6.99%

After yesterday’s close, Mallinckrodt’s market cap was at $2.24 billion.

The stock is part of the Healthcare sector, categorized under the Drugs – Generic industry. This sector was up 0.3% at the end of the session.

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