Divestiture Advances Mallinckrodt's Strategic
Priorities to Optimize Capital Structure and Focus on Core Areas of
Expertise
Mallinckrodt to
Use Net Proceeds to Reduce Net Debt by More Than 50%
CVC Brings Resources and Expertise to Further
Develop and Commercialize Therakos
DUBLIN and LUXEMBOURG, Aug. 5,
2024 /PRNewswire/ -- Mallinckrodt plc ("Mallinckrodt" or the "Company"), a global specialty
pharmaceutical company, and CVC Capital Partners ("CVC"), one of
the world's leading investment firms, today announced that they
have entered into a definitive agreement1 under
which CVC Capital Partners Fund IX will acquire the Company's
Therakos business for a purchase price of $925 million, subject to customary
adjustments.
Therakos is a fully integrated extracorporeal photopheresis
(ECP) delivery system for autologous immunomodulatory therapy. With
approvals for use in the U.S., Canada, Europe, Japan, Australia and Latin
America, it is the platform-of-choice among healthcare
providers and patients to treat a range of immune-related diseases.
CVC has deep expertise in healthcare and a global portfolio of life
sciences businesses spanning pharma, med-tech and healthcare
services. The firm intends to make additional investments in the
continued research, development, indication expansion and
geographic expansion of Therakos.
Under the terms of the agreement, key employees who work on
Therakos will transition with the business and continue supporting
the product and its stakeholders.
On behalf of CVC's Healthcare team, Cathrin Petty and Phil
Robinson said, "We see significant opportunities ahead to
expand Therakos' indications, enter new geographies and bring this
innovative treatment to more patients around the world. We look
forward to working closely with the talented Therakos team and
adding this best-in-class ECP system with an unparalleled efficacy,
safety and tolerability profile to our portfolio of healthcare
businesses."
"Today's announcement underscores our commitment to executing on
our strategic priorities and creating value for our stakeholders,"
said Siggi Olafsson, President and
Chief Executive Officer of Mallinckrodt. "This transaction provides the
Therakos business with an ideal partner to invest in its continued
growth, and we look forward to closely working with CVC to
transition Therakos for the benefit of patients, healthcare
providers, partners and employees. I thank the Therakos team for
their ongoing commitment and dedication to improving the lives of
patients."
Mallinckrodt intends to use net
proceeds from the transaction to reduce its net debt by more than
50%. The transaction is expected to close in the fourth quarter of
2024, subject to regulatory approvals and other customary closing
conditions.
Advisors
Lazard is serving as Mallinckrodt's
financial advisor, and Wachtell, Lipton, Rosen & Katz is
serving as primary legal counsel, with Arthur Cox serving as counsel in Ireland and A&O Shearman serving as
counsel in other international geographies.
UBS is serving as CVC's financial advisor, together with
Freshfields Bruckhaus Deringer (legal counsel), PWC (financial) and
Candesic (commercial).
About Mallinckrodt
Mallinckrodt is a global business
consisting of multiple wholly owned subsidiaries that develop,
manufacture, market and distribute specialty pharmaceutical
products and therapies. The Company's Specialty Brands reportable
segment's areas of focus include autoimmune and rare diseases in
specialty areas like neurology, rheumatology, hepatology,
nephrology, pulmonology, ophthalmology and oncology; immunotherapy
and neonatal respiratory critical care therapies; analgesics; and
gastrointestinal products. Its Specialty Generics reportable
segment includes specialty generic drugs and active pharmaceutical
ingredients. To learn more about Mallinckrodt, visit www.mallinckrodt.com.
Mallinckrodt uses its website as a
channel of distribution of important company information, such as
press releases, investor presentations and other financial
information. It also uses its website to expedite public access to
time-critical information regarding the Company in advance of or in
lieu of distributing a press release or a filing with the U.S.
Securities and Exchange Commission ("SEC") disclosing the same
information. Therefore, investors should look to the Investor
Relations page of the website for important and time-critical
information. Visitors to the website can also register to receive
automatic e-mail and other notifications alerting them when new
information is made available on the Investor Relations page of the
website.
About CVC Capital Partners
CVC is a leading global private markets manager with a
network of 29 office locations throughout EMEA, the Americas, and
Asia, with approximately €193
billion of assets under management. CVC has seven
complementary strategies across private equity, secondaries, credit
and infrastructure, for which CVC funds have secured
commitments of approximately €235 billion from some of the world's
leading pension funds and other institutional investors. Funds
managed or advised by CVC's private equity strategy are
invested in approximately 130 companies worldwide, which have
combined annual sales of over €155 billion and employ more than
600,000 people. For further information about CVC please
visit: www.cvc.com. Follow us on LinkedIn.
CAUTIONARY STATEMENTS RELATED TO FORWARD-LOOKING
STATEMENTS
Statements in this press release that are not strictly
historical, including statements regarding future financial
condition and operating results, expected product launches, legal,
economic, business, competitive and/or regulatory factors affecting
Mallinckrodt's businesses, the ongoing
strategic review, and any other statements regarding events or
developments Mallinckrodt believes or
anticipates will or may occur in the future, may be
"forward-looking" statements within the meaning of the Private
Securities Litigation Reform Act of 1995, and involve a number of
risks and uncertainties.
There are a number of important factors that could cause actual
events to differ materially from those suggested or indicated by
such forward-looking statements and you should not place undue
reliance on any such forward-looking statements. These factors
include risks and uncertainties related to, among other things: the
parties' ability to satisfy the conditions to the divestiture of
the Therakos business, including required regulatory approvals, and
the ability to complete the divestiture on the anticipated timeline
or at all; the potential impact of the divestiture on our
businesses and the risk that consummating the divestiture may be
more difficult, time-consuming and costly than expected; changes in
Mallinckrodt's board of directors,
business strategy and performance; Mallinckrodt's evaluation of the assets across its
portfolio, and its related pursuit of any divestiture opportunities
including completion of the sale of Therakos; the exercise of
contingent value rights by the Opioid Master Disbursement Trust II
(the "Trust"); Mallinckrodt's
repurchases of debt securities; the liquidity, results of
operations and businesses of Mallinckrodt and its subsidiaries; governmental
investigations and inquiries, regulatory actions, and lawsuits, in
each case related to Mallinckrodt or
its officers; Mallinckrodt's
contractual and court-ordered compliance obligations that, if
violated, could result in penalties; historical commercialization
of opioids, including compliance with and restrictions under the
global settlement to resolve all opioid-related claims; matters
related to Acthar Gel, including the settlement with governmental
parties to resolve certain disputes and compliance with and
restrictions under the related corporate integrity agreement; the
ability to maintain relationships with Mallinckrodt's suppliers, customers, employees and
other third parties following the emergence from the 2023
bankruptcy proceedings, as well as perceptions of the Company's
increased performance and credit risks associated with its
constrained liquidity position and capital structure; the
possibility that Mallinckrodt may be unable to achieve its
business and strategic goals even now that the emergence from the
2023 bankruptcy proceedings was successfully consummated; the
non-dischargeability of certain claims against Mallinckrodt as part of the bankruptcy process;
developing, funding and executing Mallinckrodt's business plan; Mallinckrodt's capital structure since its
emergence from the 2023 bankruptcy proceedings; scrutiny from
governments, legislative bodies and enforcement agencies related to
sales, marketing and pricing practices; pricing pressure on certain
of Mallinckrodt's products due to legal
changes or changes in insurers' or other payers' reimbursement
practices resulting from recent increased public scrutiny of
healthcare and pharmaceutical costs; the reimbursement practices of
governmental health administration authorities, private health
coverage insurers and other third-party payers; complex reporting
and payment obligations under the Medicare and Medicaid rebate
programs and other governmental purchasing and rebate programs;
cost containment efforts of customers, purchasing groups,
third-party payers and governmental organizations; changes in or
failure to comply with relevant laws and regulations; any
undesirable side effects caused by Mallinckrodt's approved and investigational
products, which could limit their commercial profile or result in
other negative consequences; Mallinckrodt's and its partners' ability to
successfully develop, commercialize or launch new products or
expand commercial opportunities of existing products, including
Acthar Gel (repository corticotropin injection) Single-Dose
Pre-filled SelfJect™ Injector and the INOmax Evolve platform;
Mallinckrodt's ability to successfully
identify or discover additional products or product candidates;
Mallinckrodt's ability to navigate
price fluctuations; competition; Mallinckrodt's and its partners' ability to protect
intellectual property rights, including in relation to ongoing and
future litigation; limited clinical trial data for Acthar Gel; the
timing, expense and uncertainty associated with clinical studies
and related regulatory processes; product liability losses and
other litigation liability; material health, safety and
environmental liabilities; business development activities or other
strategic transactions; attraction and retention of key personnel;
the effectiveness of information technology infrastructure,
including risks of external attacks or failures; customer
concentration; Mallinckrodt's reliance
on certain individual products that are material to its financial
performance; Mallinckrodt's ability to
receive sufficient procurement and production quotas granted by the
U.S. Drug Enforcement Administration; complex manufacturing
processes; reliance on third-party manufacturers and supply chain
providers and related market disruptions; conducting business
internationally; Mallinckrodt's ability
to achieve expected benefits from prior or future restructuring
activities; Mallinckrodt's significant
levels of intangible assets and related impairment testing; natural
disasters or other catastrophic events; Mallinckrodt's substantial indebtedness and
settlement obligation, its ability to generate sufficient cash to
reduce its indebtedness and its potential need and ability to incur
further indebtedness; restrictions contained in the agreements
governing Mallinckrodt's indebtedness
and settlement obligation on Mallinckrodt's operations, future financings and
use of proceeds; actions taken by third parties, including the
Company's creditors, the Trust and other stakeholders; Mallinckrodt's variable rate indebtedness;
Mallinckrodt's tax treatment by the
Internal Revenue Service under Section 7874 and Section 382 of the
Internal Revenue Code of 1986, as amended; future changes to
applicable tax laws or the impact of disputes with governmental tax
authorities; the impact of Irish laws; the impact on the holders of
Mallinckrodt's ordinary shares if
Mallinckrodt's were to cease to be a
reporting company in the United
States; the comparability of Mallinckrodt's post-emergence financial results and
the projections filed with the Bankruptcy Court; and the lack of
comparability of Mallinckrodt's
historical financial statements and information contained in its
financial statements after the adoption of fresh-start accounting
following emergence from the 2023 bankruptcy proceedings.
The "Risk Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" sections of
Mallinckrodt's Annual Report on Form
10-K for the fiscal year ended December 29, 2023, Quarterly
Report on Form 10-Q for the quarterly period ended March 29, 2024, Quarterly Report on Form 10-Q for
the quarterly period ended June 28, 2024, to be filed with the
SEC, and other filings with the SEC, which are available from the
SEC's website (www.sec.gov) and Mallinckrodt's (www.mallinckrodt.com), identify and
describe in more detail the risks and uncertainties to which
Mallinckrodt's businesses are subject.
There may be other risks and uncertainties that we are unable to
predict at this time or that we currently do not expect to have a
material adverse effect on our business. The forward-looking
statements made herein speak only as of the date hereof and
Mallinckrodt does not assume any
obligation to update or revise any forward-looking statement,
whether as a result of new information, future events and
developments or otherwise, except as required by law. Given these
uncertainties, one should not put undue reliance on any
forward-looking statements.
Mallinckrodt Contacts
Investor Relations
Derek
Belz
Vice President, Investor Relations
314-654-3950
derek.belz@mnk.com
Patient Advocacy
Derek
Naten
Vice President, Government Affairs
202-459-4143
derek.naten@mnk.com
Media
Michael Freitag /
Aaron Palash / Aura Reinhard
Joele Frank, Wilkinson Brimmer
Katcher
212-355-4449
CVC Contacts
Nick Board
CVC, Director Communications
nboard@cvc.com
Mallinckrodt, the "M" brand mark and
the Mallinckrodt Pharmaceuticals logo are trademarks of a
Mallinckrodt company. Other brands are
trademarks of a Mallinckrodt company or
their respective owners. © 2024.
1CVC also made an irrevocable commitment to acquire
the shares of the French company operating the Therakos business,
Therakos (France) SAS. The
definitive agreement with CVC in relation to the shares of Therakos
(France) SAS will become effective
after satisfaction of local information requirements.
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