Mallinckrodt buys drugmaker Therakos for $1.33bn

Dublin-based drugmaker Mallinckrodt said Monday it would buy immunotherapy company Therakos in a deal valued at about $1.33 billion, its second major acquisition this year aimed at strengthening its hospital offerings.

Therakos’s flagship device delivers extracorporeal photopheresis (ECP), a form of therapy typically used to treat symptoms associated with a common form of skin cancer in patients who have been unresponsive to other treatments.

The therapeutic platform is the world’s only approved, fully integrated systems for administering autologous immune cell therapy through ECP, the companies said.

Mallinckrodt's purchase of Therakos from investment firm the Gores Group comes after it agreed in early March to buy privately held Ikaria, a maker of a respiratory drug and its delivery system, for $2.3 billion.

The deal allowed Mallinckrodt access to Inomax, which Ikeria says is the only approved product to treat hypoxic respiratory failure in infants.

Shares were little changed at $100.56 in early trading on Monday. Mallinkrodt was spun out of Irish-headquartered medical devices group Covidien in 2013 ion a $2 billion IPO. Covidien was itself previously spun out of Tyco in 2007.

The Therakos acquisition fits “hand-in-glove” with the Inomax buy, Mallinckrodt executives noted on a conference call with analysts. They said Mallinckrodt intends to tap medical establishments already using Inomax to spur demand for Therakos’ devices, which they estimated could potentially lead to sales of $500 million or more annually.

Therakos’s device is used in more than 25 countries but Mallinckrodt said it would first focus on selling more devices in the United States, where it is only approved for the skin cancer indication.

Outside the United States, the device is also used to treat patients with Graft Versus Host disease and Crohn’s disease among others, and for solid organ transplants.

Mallinckrodt reported a slower-than-expected rise in third-quarter sales, hurt by a stronger dollar and low sales in its specialty generics and medical imaging businesses.

The Gores Group had bought Therakos from Ortho-Clinical Diagnostics, a former subsidiary of Johnson & Johnson in 2012.

Mallinckrodt entered into a debt financing for the acquisition, which it expects will add at least 10 US cents per share to adjusted profit in 2016, assuming the deal closes in late fiscal 2015. – Reuters