This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Mallinckrodt Inks $1.3B Deal for Cadence

NEW YORK (The Deal) -- Dublin-based Mallinckrodt on Tuesday agreed to buy pain-fighting rival Cadence Pharmaceuticals  (CADX) for $1.3 billion to tap growing interest in the target's acetaminophen treatment to relieve pain.

Mallinckrodt, which operates out of Hazelwood, Mo., said it would pay $14 per Cadence share, a 26% premium to the target's Monday close.

"We have been impressed with the strong relationships that Cadence's commercial organizations have established with customers in the hospital channel and are excited by the opportunity to build on these relationships to expand our platform in this area," said Mallinckrodt CEO and president Mark Trudeau in a statement.

The buyer is working to beef up its specialty pharmaceutical portfolio after being spun off last June by Dublin medical devices manufacturer Covidien. Mallinckrodt hopes it got in early on the development of Cadence's Ofirmev injectable acetaminophen, its only product.

San Diego-based Cadence said the drug had estimated sales $110.5 million in 2013, more than double the $50.1 million in 2012. That number is expected to grow further since the drug only recently won approval for use in Canada.

Mallinckrodt also hopes the drug's position on the list of approved medications in 2,350 U.S. hospitals will give it leverage to sell its other treatments. The deal will immediately add to earnings, Mallinckrodt said.

Cadence had been seen as a potential acquisition target since it only offers a single product - most drug companies offer complete portfolios.

The deal is expected to close in March and Mallinckrodt said it would use loans from Deutsche Bank Securities and available cash for the purchase. Both boards are recommending the offer to shareholders and Mallinckrodt said it already has commitments from investors holding 13% of the target's stock.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
CADX $0.00 0.00%
AAPL $128.54 -0.63%
FB $80.90 1.63%
GOOG $573.37 -0.05%
TSLA $202.44 1.44%

Markets

DOW 18,096.90 -106.47 -0.58%
S&P 500 2,098.53 -9.25 -0.44%
NASDAQ 4,967.1410 -12.76 -0.26%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs