Mallinckrodt said that it will use the proceeds from the latest deal to reduce net debt by more than 50%. Credit: Ljupco Smokovski via Shutterstock.

Speciality pharmaceutical company Mallinckrodt is selling its Therakos business to CVC Capital Partners for $925m.

Mallinckrodt, a manufacturer of branded and generic drugs, purchased Therakos back in 2015 for $1.33bn. In the 5 August announcement, Mallinckrodt said that it will use the proceeds from the latest deal to reduce net debt by more than 50%. The transaction is expected to close in Q4 2024.

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Ireland-based Mallinckrodt filed for bankruptcy to address the financial impact of several lawsuits concerning its role in the opioid epidemic in 2020. The company faced allegations that it contributed to the crisis by misrepresenting the risks of opioid products. That same year, it entered a tentative agreement with 47 states, territories, and lawyers in the US to pay $1.6bn to settle these lawsuits.

Following this settlement, the company had to file for bankruptcy again in August 2023 after facing declining sales of key products. Net sales of the company’s top-selling drug, Acthar, dropped by $90.7m in 2023 from the previous year, as per the company financials. Acthar is a gel used to treat certain autoimmune and skin diseases.

In November 2023, the company emerged from bankruptcy, saying it had reduced its total funded debt by $1.9bn.

This strategic move to sell Therakos advances Mallinckrodt’s priorities to optimise capital structure and focus on core areas of expertise, said the company.

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CVC Capital Partners will now further develop Therakos and its flagship product, the Therakos Cellex System. The solution is used for extracorporeal photopheresis (ECP), which involves removing a patient’s blood, treating it outside the body with ultraviolet light, and then returning it to the patient. ECP can treat certain cancers, including cutaneous T-cell lymphoma (CTCL).

In the announcement accompanying the agreement, Mallinckrodt’s CEO Siggi Olafsson said: “Today’s announcement underscores our commitment to executing our strategic priorities and creating value for our stakeholders.

“This transaction provides the Therakos business with an ideal partner to invest in its continued growth, and we look forward to closely working with CVC to transition Therakos for the benefit of patients, healthcare providers, partners, and employees.”