Mallinckrodt Pharmaceuticals to buy Questcor for US$5.6bn

Adds autoimmune drug H. P. Acthar Gel to its range of branded and generic medicines

Mallinckrodt, a global speciality pharmaceuticals company headquartered in Dublin, Ireland, is to make its second acquisition in as many months with the purchase of Questcor Pharmaceuticals, a biopharmaceutical company based in California, for around US$5.6bn.

The deal has been approved by the Boards of Directors of both companies and is expected to be completed in the third quarter of 2014.

Last month Mallinckrodt completed the purchase of Cadence Pharmaceuticals for $1.3bn.

After completion, Mallinckrodt shareholders will own approximately 50.5% and former Questcor shareholders approximately 49.5% of the combined company.

The purchase adds Questcor's autoimmune drug H.P. Acthar Gel to Mallinckrodt's range of branded and generic speciality medicines, which include pain management treatment Ofirmev, formerly owned by Cadence, Exalgo and Xartemis XR. Last year Acthar generated net sales of $761.3m, an increase of 50%.

Questcor's commercial operations will continue as a separate business unit within Mallinckrodt's Specialty Pharmaceuticals segment.

Mark Trudeau, President and Chief Executive of Mallinckrodt, said the transaction would 'provide a strong and sustainable platform for future revenue and earnings growth' while substantially increasing the 'scale, diversification, cash flow and profitability of the business'.

Trudeau added that the addition of Questcor and Cadence Pharmaceuticals, would also give Mallinckrodt a 'significant, established presence with prescribers, payers and hospitals'.

Don Bailey, President and Chief Executive of Questcor, added: 'I strongly believe Mallinckrodt is the right partner to support the continued growth of Acthar in the highly specialised markets that we serve. The increased cash flow and scale of operations of a combined Questcor/Mallinckrodt organisation will provide an even stronger platform to support the expansion of Acthar into new therapeutic areas.'

Questcor also provides speciality contract manufacturing services to the global pharmaceutical industry through its wholly-owned subsidiary BioVectra.

Additionally, in June 2013, Questcor acquired rights from Novartis to develop and commercialise Synacthen and Synacthen Depot in the US and certain other countries. Questcor is currently in the early stages of evaluating Synacthen in several potential indications being considered for possible US clinical development.

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