Corporate News Blog - Mallinckrodt to Acquire InfaCare Pharmaceutical and its Developmental Product Stannsoporfin
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LONDON, UK / ACCESSWIRE / August 7, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Mallinckrodt PLC (NYSE: MNK), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=MNK. The Company announced on August 04, 2017, that it entered into an agreement with InfaCare Pharmaceutical Corp. ("InfaCare"), wherein Mallinckrodt, the leading global specialty pharmaceutical Company will acquire InfaCare, a privately held specialty pharmaceutical Company focused on development and commercialization of proprietary pharmaceuticals for neonatal and pediatric patient populations. For immediate access to our complimentary reports, including today's coverage, register for free now at:
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Currently, the developmental product of InfaCare, Stannsoporfin, which is a heme oxygenase inhibitor, is under investigation for its potential to lessen the production of bilirubin. The unprecedented increase of bilirubin can cause serious consequences in infants.
US Food and Drug Administration Approvals for Stannsoporfin
InfaCare and the US Food and Drug Administration (FDA) reached an agreement in July 2016 that a New Drug Application (NDA) could be filed for Stannsoporfin using the totality of the drug's data package, which includes a positive Phase-2(b) trial as its pivotal study; data from a second positive Phase-2(b) trial; and no additional studies required pre-approval.
The existing medical need: This allowance signifies the medical need in infants who are at risk of developing severe jaundice. In fact, there are significant challenges in even conducting controlled trials in this fragile population.
A fast track status: The FDA granted Stannsoporfin its Fast Track designation in December 2016. The Fast Track status will facilitate the development of Stannsoporfin and expedite its review to treat serious conditions and fill an unmet medical need. The status also allows for a "rolling" NDA data submission that has recently begun, and its approval is expected in H1 2018. The post-approval commitments required by the FDA include conducting trials in preterm infants less than 35 weeks gestational age as part of the pediatric requirements. If the drug is approved, it will have substantial durability both as a new chemical entity and through its intellectual property, which is valid until 2032.
Infantile Hyperbilirubinemia (or jaundice)
Jaundice, or hyperbilirubinemia, is a common clinical condition witnessed in both term and preterm newborns. If a baby develops severe jaundice, there is a risk of bilirubin passing into the brain, a syndrome called acute bilirubin encephalopathy. In this case, lasting damage may be prevented by prompt treatment. But persistent high levels of bilirubin in the brain can lead to kernicterus, which is a serious condition with severe and permanent brain damage. Poor feeding, shrill cry, muscle rigidity, markedly arched back with a backwards hyperextension of the neck, seizures, and stupor or coma are symptoms of this grave condition. Moreover, complications could also include hearing loss and death. With regard to this, the American Academy of Pediatrics guidelines recommends all newborns be assessed for the risk of hyperbilirubinemia before discharge from the hospital.
Stannsoporfin to become the First and Only Option for Treating Hyperbilirubinemia
The current therapies for treating infant jaundice focus on removing excess bilirubin from the infant's system. Preliminary data from controlled clinical studies indicate that Stannsoporfin's novel method of action shows a vigorous effect in constraining bilirubin production. It seems the drug has a good safety profile compared to placebo, and has convenient administration through a single intramuscular injection. If approved, it will be the first and only pharmacologic treatment for treatment of newborns at risk for developing severe infantile jaundice in the US.
The existing Jaundice Market and Treatment Options
Currently, the total number of births in the US is estimated at 3.7 million per year and, out of those, nearly 750,000 infants are treated for jaundice. Out of those who are treated, a big number may be unresponsive to phototherapy, which is the current standard of care. As of now, physicians resort to invasive treatment options in severe recurrent cases, which mostly include blood exchange transfusion and less frequently intravenous immunoglobululin infusions (IVIG), both of which have a more complex and lengthy administration than stannsoporfin's single injection.
The combined potential patient treatments required annually in the US for severe jaundice is approximately 70,000 to 125,000. Severe jaundice requires extended or recurrent treatment, and the current US treatment costs around $5,000 per patient which implies an annual cost of roughly half a billion dollars to the US healthcare system.
Commercialization of Stannsoporfin
If approved, Mallinckrodt expects Stannsoporfin to be commercialized by the Company's existing sales organization, which currently supports INOMAX® (nitric oxide) gas, for inhalation, therapy in neonatal centers across the US. In fact, patient access to this treatment option would be enhanced by the Company's strong relationships with hospital networks, insurance companies, and group purchasing organizations. Mallinckrodt's existing infrastructure of clinical and medical affairs experts will also boost the approval and launch of the product. Mallinckrodt will be working with existing InfaCare talent on a smooth integration of the development process and regulatory filings.
Acquisition expands Mallinckrodt's pediatric offerings and diversifies hospital portfolio
Mark Trudeau, Chief Executive Officer and President of Mallinckrodt reaffirmed that Stannsoporfin has the potential to alter the treatment paradigm for infants with Hyperbilirubinemia. He mentioned that the addition of this unique developmental drug to Mallinckrodt's growing hospital business is an excellent example of the Company's diversification and investment strategy. Mallinckrodt estimates the market for severe jaundice patient treatments for term babies in key international countries to be in the range of 150,000 to 275,000 annually.
Financial Implications of the Acquisition
As per the agreement, Mallinckrodt will make an upfront payment of $80 million, with additional payments of up to $345 million dependent on regulatory and sales milestones.
The Company expects the transaction to be dilutive to adjusted diluted earnings per share by $0.15 to $0.20 for 2017 and modestly higher in 2018.
The transaction is subject to customary closing conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.
It is estimated that the transaction will close in H2 2017.
Last Close Stock Review
At the close of trading session on Friday, August 04, 2017, Mallinckrodt's stock price declined 1.44% to end the day at $41.02. A total volume of 2.29 million shares were exchanged during the session. The Company's shares are trading at a PE ratio of 44.44. At Friday's closing price, the stock's net capitalization stands at $4.13 billion.
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