Like its much bigger counterpart Abbott Laboratories ($ABT), device-and-drug maker Covidien ($COV) is plotting a spinoff of its pharma unit, Mallinckrodt. And it's beefing up that division in advance of the sale, set to be completed next year.
Now valued at about $2 billion, Mallinckrodt has agreed to buy the privately held drugmaker CNS Therapeutics for $100 million. CNS has one marketed product--Gablofen, used to treat severe spasticity--and a pipeline of pain and spasticity treatments. The deal is expected to close later this year.
"CNS Therapeutics' marketed product line complements our branded portfolio," Mallinckrodt President Mark Trudeau said in a statement. "Their central nervous system and pain management products in development complement our pipeline and address an important need for patients."
The CNS deal followed some other recent investments in the Mallinckrodt unit, the St. Louis Post-Dispatch points out. Last month, for instance, the pharma unit bought the pain drug Roxicodone from Xanodyne Pharmaceuticals. "I think Covidien realized some investment is attractive for investors at the time of Mallinckrodt's spin-off," Morningstar analyst Alex Morozov told the newspaper.
- see the Mallinckrodt release
- read the Post-Dispatch story