FDA Approves Mallinckrodt's Xartemis XR

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Mallinckrodt plc’s (MNK) extended-release oral formulation, Xartemis XR (oxycodone HCI and acetaminophen) gained U.S. Food and Drug Administration (:FDA) approval for the management of acute pain in patients requiring opioid treatment and for whom alternative therapies are inadequate, ineffective or are not tolerated.

Meanwhile, Mallinckrodt is conducting additional studies and working closely with the FDA to generate more data on Xartemis XR. Although the label does not contain abuse-deterrent language, Mallinckrodt is looking to provide more data on Xartemis XR’s abuse-deterrence features.

Xartemis XR is the first and only approved extended-release oral combination of oxycodone HCI and acetaminophen. The company intends to launch Xartemis XR in the second quarter of fiscal 2014. We remind investors that Mallinckrodt recently launched another pain drug, Pennsaid 2%, for the treatment of osteoarthritis pain of the knees.

Mallinckrodt is actively focusing on strengthening its pipeline and promoting new products in the pain market. The company expects to file for approval of another pain candidate, MNK-155, in the second half of fiscal 2014.

Meanwhile, Mallinckrodt announced its intention to acquire Cadence Pharmaceuticals, Inc. (CADX) for about $1.3 billion. With this acquisition, Mallinckrodt is looking to strengthen its specialty pharma segment. Given Cadence Pharma's strong presence in the hospital market, this acquisition will add another potential growth area for Mallinckrodt.

Currently, Mallinckrodt carries a Zacks Rank #1 (Strong Buy). Other stocks looking equally good in the health care sector are Dr. Reddy's Laboratories Ltd. (RDY) and Actavis plc (ACT). While Dr. Reddy's Lab holds a Zacks Rank #1 (Strong Buy), Actavis carries a Zacks Rank #2 (Buy).

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