Mallinckrodt Grabs Questcor for $5.6B, Sends Shares Surging

NEW YORK (TheStreet) -- Shares of Questcor Pharmaceuticals (QCOR) surged more than 30% before market open on Monday after it announced a $5.6 billion deal to be acquired by Mallinckrodt Pharmaceuticals (MNK).

Questcor shares, which have gained 115.46% over the last 12 months, climbed 30.71% to $88.71 in premarket trading. Shares of Dublin-based Mallinckrodt were also rising, gaining 7.49% to $67.20.

Under the terms of the deal, Questcor shareholders will receive $30 in cash and 0.897 a Mallinckrodt share for each share of Questcor common stock they own.

Based on the company's closing prices on April 4, the deal represents a price of approximately $27 per share and a premium of approximately 33% over Questcor's trailing 20-trading-day volume-weighted average price.

In a joint statement by the companies released early on Monday, Mallinckrodt said that the combined company will benefit from increased scale, revenue, profitability and cash flow.

The deal comes hot on the heels of Mallinckrodt's $4.1 billion acquisition of Cadence Pharmaceuticals, which it completed last month.

"With Questcor, combined with our recently completed acquisition of Cadence Pharmaceuticals, the new Mallinckrodt will have a significant, established presence with prescribers, payers and hospitals," said Mallinckrodt CEO Mark Trudeau, in the statement. "We will also have an increasingly diversified specialty pharmaceuticals portfolio, which will include novel therapeutics for pain management, as well as central nervous system, renal, rheumatologic and other autoimmune and inflammatory disorders."

Mallinckrodt highlighted, in particular, Questcor's H.P. Acthar Gel, which it said will be a strong complement to its own OFIRMEV, EXALGO and XARTEMIS XR offerings. Sales of Acthar, which is used to treat multiple sclerosis relapses, were $761.3 million in calendar 2013, a 49.6% hike on the prior year.

If you liked this article you might like

The 6 Medications Being Used to Tackle the Opioid Epidemic

The Stock Market Gets Smashed -- Here Are Some Terrible Performers

Top Ranking Democrat McCaskill Expands Probe into Opioid Crisis

Earnings Are Back With a Vengeance: Cramer's 'Mad Money' Recap (Monday 7/24/17)