Mallinckrodt ponies up $2.3B for Ikaria and its neonatal respiratory med

Mallinckrodt ($MNK) will slap down $2.3 billion to buy Ikaria, a privately held drug company, and its respiratory med for babies in neonatal ICUs. The deal will help Mallinckrodt grow its hospital drugs business, with a $150 million boost to revenue this year.

It's just the latest deal inked by Mallinckrodt, which is working to expand in the high-margin specialty drugs world. Last April, the Dublin-based drugmaker plunked down $5.8 billion for Questcor Pharmaceuticals and its controversial multiple sclerosis med H.P. Acthar Gel, one of the most expensive drugs in the world. Two months before that, it agreed to pay $1.6 billion for Cadence Pharmaceuticals.

Like Questcor, which came with one pricey marketed product, Ikaria brings along its lead med INOmax, an inhaled nitric oxide designed to help critically ill babies breathe. The drug works in tandem with ICU ventilators. The company had been working on expanding INOmax into other indications, and sports some in-development meds, including terlipressin, which treats a rare disease affecting the liver and kidneys.

Mark Trudeau

The Ikaria deal should "significantly strengthen" Mallinckrodt's footprint in hospitals, the company said. Mallinckrodt's hospital business now focuses on drugs used during diagnostic scans and treatments for surgical pain. And it fits right into the company's plan to build up a diverse portfolio of specialty meds, CEO Mark Trudeau said in a statement. The company was spun off by Covidien in 2013.

"With this expansion into respiratory neonatal critical care we expect to further broaden our touch points in the hospital market, and at the same time diversify our portfolio with durable assets that play vital roles in the treatment of vulnerable patient populations," Trudeau said.

Ikaria is currently owned by an investor group led by Madison Dearborn Partners. Mallinckrodt says it will finance the deal with cash and debt, aiming to close early next quarter. In addition to a $150 million sales boost for its current fiscal year, the deal is expected to boost earnings by at least $0.25 per share, the company said.

- read the release from Mallinckrodt

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