Mallinckrodt to Acquire Sucampo Pharmaceuticals for $1.2 Billion

Rare Daily Staff

Specialty pharmaceutical company Mallinckrodt said it agreed to acquire rare disease drug developer Sucampo Pharmaceuticals for approximately $1.2 billion in cash.

“Mallinckrodt’s acquisition of Sucampo is the latest milestone towards our vision of becoming an innovation-driven specialty pharmaceutical growth company focused on improving outcomes for patients with severe and critical conditions,” said Mark Trudeau, president and CEO of Mallinckrodt.

The acquisition brings near-term net sales and earnings accretion through Sucampo’s Amitiza, a treatment for various forms of constipation, and bolsters Mallinckrodt’s pipeline in rare diseases with drugs in development for the rare neurodegenerative condition Niemann Pick Type C, and second drug in development for Familial Adenomatous Polyposis, a rare condition that causes uncontrolled growth of hundreds to thousands of polyps in the lower digestive tract, which if left untreated, eventually leads to colorectal cancer.

“Together we have made extraordinary progress in our mission to provide options for patients affected by diseases with few or no current treatment options, and to their caregivers and physicians. We believe that this transaction with Mallinckrodt represents significant value for shareholders,” said Peter Greenleaf, Chairman and Chief Executive Officer of Sucampo. “With the addition of its significant resources and expertise, we believe Mallinckrodt is a natural partner to accelerate the development of our rare disease assets in NPC and FAP, and to continue to provide Amitiza for patients suffering from constipation-related disorders.”

Under the terms of the agreement, Sun Acquisition, a subsidiary of Mallinckrodt, will commence a cash tender offer to purchase all of the outstanding shares of Sucampo Pharmaceuticals’ common stock for $18.00 per share. Mallinckrodt is expected to fund the acquisition by using its existing revolving credit facility, a new secured term loan facility, and/or cash on hand. Sucampo stockholders holding approximately 32 percent of the outstanding Sucampo shares have entered into a tender and support agreement for this transaction.

The transaction is subject to customary closing conditions, including expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and the tender of a majority of the outstanding Sucampo shares.

Mallinckrodt expects accretion from the acquisition to adjusted diluted earnings per share of at least $0.30 in 2018 and at least double that amount in 2019, assuming a first quarter 2018 close. Mallinckrodt has not provided guidance on the impact of the acquisition on the company’s GAAP diluted earnings per share.

December 27, 2017