Mallinckrodt Pharmaceuticals and Endo have agreed to merge in a $6.7bn deal, combining two pharmaceutical companies that recently emerged from bankruptcy proceedings tied to opioid litigation.
According to the 13 March announcement, the merger will create a “larger, more diversified entity”, with Mallinckrodt shareholders holding a 50.1% stake and Endo shareholders receiving 49.9%, along with $80m in cash.
Under the terms of the agreement, Mallinckrodt CEO Siggi Olafsson will serve as the president and chief executive of the combined company, while Endo director Paul Efron will take on the role of chairman of the board. Endo will continue to operate as a wholly owned subsidiary of Mallinckrodt, as per the 13 March announcement.
This merger comes after both companies faced significant financial and legal challenges due to their involvement in the sale of opioid painkillers. The opioid crisis in the US has led to extensive litigation against pharmaceutical companies accused of fuelling widespread addiction and overdose deaths. Mallinckrodt and Endo were among those sued over allegations that they contributed to the crisis by misrepresenting the risks of opioid products.
Mallinckrodt first filed for bankruptcy in 2020 after reaching a tentative $1.6bn settlement with 47 states, territories, and other claimants in the US over its opioid-related liabilities. The company filed for bankruptcy again in 2023 following declining sales of key products. Net sales of the company’s top-selling drug, Acthar – a gel used to treat certain autoimmune and skin diseases – dropped by $90.7m in 2023 from the previous year, as per the company financials. The Dublin-headquartered company emerged from bankruptcy in November 2023, having reduced its total funded debt by $1.9bn. In 2023, it also paid out $700m to victims of the opioid crisis to settle thousands of lawsuits for manufacturing a generic version of Oxycodone.
Endo, headquartered in Pennsylvania, US, similarly filed for bankruptcy in 2022 due to opioid-related liabilities. The company agreed to pay $465m to the US government and $450m to state and municipal trusts to support opioid recovery programmes. The company also pleaded guilty to a misdemeanour related to its opioid marketing practices.
Both companies have worked to reposition themselves as specialty pharmaceutical firms, divesting non-core businesses. Earlier this week, Endo sold its international pharma unit Paladin to Knight Therapeutics for up to $99m, while Mallinckrodt sold its Therakos division to private equity firm CVC Capital Partners for $925m in August 2024.
Mallinckrodt now focuses on generics and specialty medicines, including Acthar Gel and Terlivaz (terlipressin) for hepatorenal syndrome. Endo’s portfolio includes Xiaflex (collagenase clostridium histolyticum) for Dupuytren’s contracture and Peyronie’s disease, as well as a range of generics and sterile injectables.
As part of the merger – which is expected to close in H2 2025 – the generics and sterile injectables businesses of both companies will be spun off into a separate standalone entity upon deal completion. The new company will be listed on the New York Stock Exchange and is expected to generate approximately $3.6bn in revenue in 2025.
