Mallinckrodt Pharmaceuticals and Endo Inc. have agreed to merge in a transaction valued at approximately $6.7 billion. This strategic move aims to create a more robust and diversified entity, enhancing their positions in the global market.
Company Profiles
Mallinckrodt Pharmaceuticals, headquartered in Dublin, Ireland, is a specialty biopharmaceutical company known for its diverse portfolio of branded and generic medicines. The company’s products address a variety of therapeutic areas, including autoimmune and rare diseases. Notably, Mallinckrodt markets Acthar Gel, used for treating several autoimmune and inflammatory disorders, and Terlivaz, a therapy for kidney disease.
Endo Inc., based in Malvern, Pennsylvania, is a specialty pharmaceutical company with a focus on branded and generic pharmaceuticals, as well as sterile injectables. Endo’s portfolio includes Xiaflex, approved for conditions such as Dupuytren’s contracture and Peyronie’s disease, and Aveed, a testosterone injection.
Merger Details
The merger is structured as a cash and stock transaction. Endo shareholders will receive $80 million in cash and will own 49.9% of the combined company, while Mallinckrodt shareholders will hold a 50.1% stake. The combined entity is projected to generate approximately $3.6 billion in revenue by 2025.
The new company will be headquartered in Dublin, Ireland, maintaining a significant operational presence in the United States. It will encompass 17 manufacturing sites, 30 distribution centers, and employ around 5,700 individuals globally.
Strategic Rationale
Both companies have recently emerged from bankruptcy proceedings linked to opioid litigation. Mallinckrodt filed for Chapter 11 bankruptcy protection twice, first in 2020 and again in 2023, primarily due to litigation over its marketing of opioid drugs. Endo filed for bankruptcy in 2022, following lawsuits related to its marketing of opioid medications.
The merger is expected to yield annual pre-tax operating synergies of at least $150 million within three years, achieved through business function integration and economies of scale in research and development. This financial flexibility is anticipated to facilitate investments in innovation and growth opportunities.
Future Outlook
Post-merger, the combined company plans to integrate their generic pharmaceuticals and Endo’s sterile injectables businesses, with intentions to separate this segment in the future. This strategy aims to streamline operations and focus on core competencies.
The boards of both companies have approved the merger, which now awaits shareholder and regulatory approvals. The transaction is anticipated to close in the second half of 2025.
This merger signifies a pivotal step for Mallinckrodt and Endo as they aim to strengthen their market positions and enhance value for shareholders, customers, and patients globally.