Mallinckrodt made a series of multibillion dollar deals over 18 months as it moved to become a specialty pharma player but ended up with hundreds of new employees spread over a dozen sites. Now the Dublin-based company has decided it needs a U.S. campus to consolidate all of those workers, as well as more manufacturing, so will invest about $90 million more on what it is calling its specialty brands business.
Mallinckrodt ($MNK) will spend $80 million to build out facilities in Bedminster, NJ, where it expects to have 400 employees working by Q1 of next year. On top of that, it is spending $8 million on its St. Louis manufacturing operations, which is part of $140 million it has invested in the area on manufacturing and operations. Last year, it opened a $12 million expansion of the plant.
"As we began to transform Mallinckrodt into a specialty pharmaceutical organization, we acquired a base of established operations on the East Coast," CEO Mark Trudeau said in a statement. "Bedminster is an excellent setting for Mallinckrodt, allowing us to design a workspace that will meet the needs of our dynamic, fast-growing business, while providing an exceptional working environment to support collaboration among our employees."
The drugmaker made four deals in quick order to build out its specialty pharma biz. Those included last year’s $1.33 billion spend for immunotherapy maker Therakos and $2.3 billion purchase of Ikaria that brought it access to a respiratory med for babies in neonatal ICUs. Those came after a 2014 spree in which it laid out $1.6 billion for Cadence Pharmaceuticals, following that up a couple of months later with the biggest buy of the four, $5.8 billion for Questcor Pharmaceuticals.
With Questcor, it got not only controversial multiple sclerosis med H.P. Acthar Gel, but a host of potential problems. Before the buyout, Questcor had already been probed and criticized for steadily raising the price of Acthar Gel to more than $28,000 a vial from just $40 a vial a decade earlier.
Last year, Mallinckrodt acknowledged that the Federal Trade Commission had demanded documents and info about Questcor's 2013 deal for the rights to Synacthen Depot, a Novartis ($NVS) drug that might have been a head-to-head competitor to Acthar. It said at the time the FTC inquiry was just one of several new investigations including by states looking into whether the deal violated their antitrust laws.
On top of that, some of the short sellers that were constant critics of Questcor are now hassling Mallinckrodt. In May, short seller Andrew Left taunted the company on a segment of CNBC, offering to give a $1 million check to the National Multiple Sclerosis Society if Mallinckrodt would conduct clinical trials to prove Acthar’s efficacy for treating the disease, something that has been questioned before.
- here’s the release
Mallinckrodt amps up hospital business with $1.3B Therakos buy
Questcor's Acthar maneuvers land Mallinckrodt in hot water with FTC, state AGs
Short-seller Andrew Left puts Mallinckrodt and its Acthar pricing on the spot--again