Mallinckrodt/Questcor

Mallinckrodt/Questcor
Deal value: $5.6 billion
Deal status: Closed

After Mallinckrodt ($MNK) was spun off from devicemaker Covidien ($COV), CEO Mark Trudeau went on the hunt for M&A targets that could help it diversify a portfolio that leaned heavily on medical imaging products. With specialty pharmaceuticals in mind, he first snapped up Cadence Pharmaceuticals for $1.3 billion to get hold of its specialty pain drug Ofirmev. A month later it bagged Questcor, essentially another one-drug move, for $5.6 billion, a deal big enough to rank in the top 10 for the year.

What it got for its $5.6 billion is H.P. Acthar Gel, an autoimmune treatment that is also one of the priciest drugs in the world. The drug got to that vaulted status through a series of price moves by Questcor which have raised questions among some medical experts. When Questcor bought the rights to the drug, a hormone-based drug derived from pig pituitary glands, from Sanofi-Aventis in 2001, it ran about $40 per vial. In 2007, Questcor had raised that to $23,000 per vial. By 2013 it was up 9% to $205,681 for a year's treatment course. It was the fifth most expensive drug in the world in 2013 and had recorded sales of $760 million, up 50%.

The escalation in price finally drew some attention, including a probe into its marketing in 2012. The company also found itself fending off short sellers, a situation that became moot when Mallinckrodt made its move. But during the battle with the shorts, the company ended up acknowledging that H.P. Acthar Gel had been linked to 3,100 adverse-events reports in about three years, including 20 deaths.

For more:
Special Report:
The top 10 most expensive drugs of 2013 - H.P. Acthar Gel
Mallinckrodt bets $5.6B on Questcor and its controversial Acthar drug
Questcor, short sellers trade attacks
Mallinckrodt expands pain portfolio with Cadence acquisition
With $135M rights deal, Questcor locks up rival to its pricey Acthar drug

--Eric Palmer (email | Twitter)

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Mallinckrodt/Questcor