The specialty pharmaceutical company has twice filed for bankruptcy in recent years, driven by opioid-related litigation. Mallinckrodt’s deal with CVC will allow it to pay off more than half of its net debt.
Mallinckrodt on Monday announced that it has inked an agreement with CVC Capital Partners to sell off its Therakos photopheresis business to help chip away at its debt.
CVC Capital Partners, a private equity and investment advisory firm based in Luxemburg, is paying $925 million for Mallinckrodt’s therapy platform that extracts patients’ white blood cells and subjects them to external treatment before being returned to the patient. Therakos is approved for the palliative care of patients with cutaneous T-cell lymphoma though its exact mechanism of action is not completely known, according to Mallinckrodt’s website for the therapy.
Monday’s deal with CVC Capital Partners will allow Mallinckrodt to pay off more than half of its net debt. CVC will keep “key employees who work on Therakos” and will continue to support both the photopheresis product and its customers. The companies expect to close the transaction in the fourth quarter of 2024, pending regulatory clearances and other closing conditions.
“This transaction provides the Therakos business with an ideal partner to invest in its continued growth,” Siggi Olafsson, CEO of Mallinckrodt, said in a statement, adding that the CVC deal “underscores our commitment to executing on our strategic priorities and creating value for our stakeholders.”
Mallinckrodt’s financial advisor for the deal is Lazard, while Watchell, Lipton, Rosen & Katz will serve as primary legal counsel. For CVC, UBS will act as its financial advisor, alongside legal counsel Freshfields Bruckhaus Deringer.
In October 2020, Mallinckrodt agreed to a $1.6 billion settlement—which it would deposit into a separate trust—in relation to opioid lawsuits, several media outlets reported at the time. Shortly after, the company filed for Chapter 11 bankruptcy, through which it sought to restructure its debt and “resolve several billion dollars of otherwise unmanageable potential legal liabilities.”
The Chapter 11 filing was also meant to help Mallinckrodt resolve Medicaid rebate disputes related to its Acathar Gel.
However, despite the initial bankruptcy bid, Mallinckrodt still had trouble staying afloat and forcing the company in August 2023 to enter a major restructuring support agreement with its major debtholders and the opioid-related trust. The company at the time also revealed plans to file for another Chapter 11, which the District Court of Delaware approved a few months later.
