Mallinckrodt PLC (MNK) Looks Appealing To This Billionaire Despite Its Slump

If one needs to highlight the rapid pace of M&A happening in the healthcare space, Mallinckrodt PLC (NYSE:MNK) can act as a perfect example.  In the year 2000, Tyco International PLC (NYSE:TYC) acquired a pharmaceutical maker that was then known as Mallinckrodt. In 2007 it spun off Tyco Healthcare into a separate company, which was named Covidien plc. After Covidien plc spun off Mallinckrodt PLC (NYSE:MNK) in 2013, it was itself acquired by Medtronic PLC (NYSE:MDT) in a $42.9 billion deal that was completed in January og this year. Mallinckrodt PLC (NYSE:MNK) has also done completed acquisitions since going public, which includes of Cadence Pharmaceuticals, Questcore, and Ikaria. On August 10, Mallinckrodt PLC (NYSE:MNK) announced that it will be acquiring immunotherapy maker Therakos in a $1.33 billion deal. Therakos’ flagship system is used by treatment centers and hospitals in more than 25 countries across the globe to treat blood cancer patients who have been unresponsive to other treatments, for symptoms that are associated with a common form of the disease. Therakos is the only company  in the world that has the technology to make devices which are approved, fully integrated systems for extracorporeal photopheresis, or ECP. In the U.S., Therakos’ devices are approved for only one form of blood cancer and with this acquisition Mallinckrodt wants to concentrate on increasing the sales of Therakos’ devices in the U.S.

For the fiscal third quarter off 2015, Mallinckrodt PLC (NYSE:MNK) reported EPS of $2.05, which was a 70.8% year-over-over increase and also significantly above analysts’ expectations of $1.82. However, on the revenue front, even though the company reported a 47.8% year-over-year increase to $965 million, it was still below the $983.81 million number analysts had expected. The revenue increase for the quarter was primarily driven by H.P. Acthar Gel (repository corticotropin injection) and INOMAX (nitric oxide), for inhalation, which the company had acquired in August 2014 and April 2015 respectively. Gross profit for the quarter came in at $533.5 million, compared to the $284.3 million it had reported for the same quarter of last year. Additionally, the selling, general and administrative (SG&A) expenses of the company also increased to $332.7 million from $221.3 million a year ago.

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