Mallinckrodt Hires Bankruptcy Advisor, Stocks Tank To Record Low
Pharmaceutical company Mallinckrodt’s stocks plunged to a record low after it was reported that the troubled opioid maker had hired bankruptcy advisors. The stock tumbled 39% and closed at $1.59. Mallinckrodt’s shares were at a peak in 2015 at $132.51 a share. Since then, they have lost a staggering 95% of their value. Mallinckrodt chief Mark Trudeau told the investors that it was unfortunate that such rumors and speculations were being made.
The drug-maker has several lawsuits filed against them and is reeling under a $5 billion debt. It was reported that the company agreed to pay $15.4 million for the settlement of a bribery probe in a company which Mallinckrodt acquired in 2014.Law firm Latham & Wilkins was hired to settle the bribery case. The company also hired Alix Partners to help turnaround the company.
CEO Trudeau said that while they couldn’t comment on rumors, he also clarified that companies hire advisors from different domains all the time. He noted that it was unfortunate the people were putting things together and making assumptions that were completely different from what the company was trying to achieve. Trudeau said Mallinckrodt’s focus would be to try and transform the company into a drug developer. Mallinckrodt is not only known for opioids. H.P. Acthar Gel is a 67-year old drug that’s fetching the company $1 billion in annual revenue.
As per a federal database, Mallinckrodt was the largest manufacturer of opioid painkillers between 2006 and 2012. Ohio has about 2,000 lawsuits against opioid manufacturers and suppliers. The trial for these consolidate lawsuits will begin next month. Trudeau commented that opioid makers like Mallinckrodt are stuck in uncertainties they have never seen before.
The U.S. is witnessing an unprecedented opioid crisis. Opioid prescriptions issued in the U.S have increased significantly in the last decade. While these medications are effective for severe pain, they have huge addiction potential. In 2017, about 47,000 people lost their lives due to opioid overdose.
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