Mallinckrodt to acquire Cadence Pharmaceuticals
DUBLIN — Mallinckrodt and Cadence Pharmaceuticals on Tuesday announced that they have entered into a definitive agreement under which a subsidiary of Mallinckrodt will commence a tender offer to acquire all outstanding shares of Cadence Pharmaceuticals for $14.00 per share in cash or approximately $1.3 billion on a fully diluted basis, which represents a 32% premium to the trailing 30-trading-day volume weighted average price of $10.62 per share for Cadence Pharmaceuticals.
Subject to customary terms and conditions, the parties expect the transaction to close in mid- to late-March.
Cadence Pharmaceuticals is a biopharmaceutical company focused on commercializing products principally for use in the hospital setting. The company’s product Ofirmev (acetaminophen injection) is a proprietary intravenous formulation of acetaminophen for the management of mild to moderate pain, the management of moderate to severe pain with adjunctive opioid analgesics and the reduction of fever. Since its introduction, Ofirmev has experienced strong growth. In a press release issued Jan. 13, Cadence reported that it expects net revenues of $110.5 million for Ofirmev in calendar year 2013, compared with 2012 reported net-product revenues of $50.1 million.
Ofirmev currently is on formulary in more than 2,350 U.S. hospitals and has been used to treat an estimated 6 million to 7 million patients since its launch in January 2011. A New Drug Submission for the product has been approved by Health Canada.
This transaction accelerates growth in Mallinckrodt’s Specialty Pharmaceuticals segment in key ways. First, the company adds another powerful growth product, Ofirmev, to the segment’s portfolio of core controlled substance generics and its growing roster of such brands as Exalgo, Gablofen, Pennsaid 2% and, if approved, Xartemis XR and longer term MNK-155. Additionally, with the strong presence Cadence has established in the adjacent hospital market, the acquisition adds another potential growth dimension for the segment, providing Mallinckrodt an opportunity to expand the company’s reach and penetration in this channel.
“The acquisition of Cadence Pharmaceuticals is consistent with our goal of becoming a leading global specialty pharmaceuticals company,” said Mark Trudeau, CEO and president of Mallinckrodt. “Ofirmev’s growth is driven by an expanding base of physicians who are prescribing the product for an increasing number of surgical patients, and we believe the product will be an outstanding addition to the brands component of Mallinckrodt’s Specialty Pharmaceutical segment. 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. We believe Mallinckrodt is well-positioned to further accelerate the trajectory of Ofirmev and realize the full value of this product in the marketplace.”
Avalere Health: Medicare proposed rule change could require 39% of all PDPs to be eliminated in 2016
WASHINGTON — A Medicare proposed rule change limiting the number of prescription drug plans that insurers may offer in the Part D market could require 39% of all enhanced plans to be eliminated in 2016, according to an analysis from Avalere Health that was released Wednesday. The change, which limits standalone PDP sponsors to one basic and one enhanced plan per region, was proposed by the Centers for Medicare and Medicaid Services in a January proposed regulation.
Avalere estimates that the change would require 214 of the current 552 enhanced PDPs to be terminated or consolidated with an existing plan. Those 214 plans represent products sold by nine carriers that currently offer two enhanced PDPs in the same region.
“Many health plans have designed low-premium, enhanced PDPs to attract cost-conscious enrollees and more comprehensive options for higher-need beneficiaries,” said Matt Eyles, EVP at Avalere Heath. “Plans are likely to respond to this change by rolling the more comprehensive PDP into the lower-cost plan, which could increase premiums for beneficiaries.”
The anticipated change in policy would impact 7.4 million of the 7.9 million (94%) Medicare beneficiaries who are currently enrolled in an enhanced plan — including both beneficiaries whose plan will be terminated or consolidated and those whose plan will remain but may see changes in benefits or premiums as plan options and enrollees are consolidated.
PhRMA: 180 diabetes medicines in development
WASHINGTON — America’s biopharmaceutical research companies currently are developing 180 new medicines to help the nearly 400 million people who have diabetes worldwide, the Pharmaceutical Research and Manufacturers of America announced Tuesday. These medicines in development — all either in clinical trials or under review by the Food and Drug Administration — include 30 for type 1 diabetes, 100 for type 2 and 52 for diabetes-related conditions.
“Dedicated researchers in the biopharmaceutical sector, working hand-in-hand with others in the medical innovation ecosystem, are striving to meet the global challenge of diabetes by developing new innovative treatment options,” stated PhRMA president and CEO John Castellani. “The nearly 200 medicines in development today offer great hope that together we can ease the tremendous burden of diabetes on patients, public health and economies around the world.”
PhRMA released a report that conveys the range of innovative approaches being pursued to tackle this challenging chronic disease. Examples include:
- A medicine that improves glucose-dependent insulin secretion for type 2 diabetes;
- A medicine designed to inhibit an enzyme linked to diabetic neuropathy; and
- A treatment designed to stimulate and enhance the regeneration of insulin-producing cells for type 1 diabetes.
One of the biggest hurdles in discovering and developing new medicines for diabetes is the identification and validation of promising biological targets of the disease. A new public-private partnership involving the National Institutes of Health, 10 biopharmaceutical companies, PhRMA and several non-profit disease foundations aims to transform the current model for developing new diagnostics and treatments for certain diseases. The Accelerating Medicines Partnership will begin with three- to five-year pilot projects focused on three disease areas, including diabetes.