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Mallinckrodt Will Sell RECOTHROM® And PREVELEAK® To Baxter

-- Sale of hemostasis products reflects further refinement of MNK portfolio and strategy --
-- Total consideration of $185 million, with $153 million upfront, including existing inventory, and the remainder in potential milestone payments --
-- Transaction supports Mallinckrodt's transformation to an innovation-driven specialty pharmaceutical growth company focused on improving outcomes for patients with severe and critical conditions --

STAINES-UPON-THAMES, United Kingdom, Jan. 8, 2018 /PRNewswire/ -- Mallinckrodt plc (NYSE: MNK), a leading specialty pharmaceutical company, announced today it has entered into an agreement under which it will sell certain hemostasis products to Baxter International Inc. (NYSE: BAX) for approximately $185 million, with upfront payment of $153 million, inclusive of existing inventory, and the remainder in potential future milestones. Baxter will assume other expenses, including contingent liabilities associated with PREVELEAK®. Baxter is a global medical products company that is committed to advancing surgical innovation with a variety of products and delivery devices used in the surgical suite.

RECOTHROM® Thrombin topical (Recombinant) and PREVELEAK® Surgical Sealant, both products for use in the control of bleeding in the surgical suite, are included in the transaction, as well as the manufacturing operation for PREVELEAK. The products will complement and broaden Baxter's current portfolio of hemostats and sealants, offering surgeons additional products to address patients' varying needs.

"Mallinckrodt is transforming itself to become a top-performing specialty pharmaceutical company," said Mark Trudeau, President and Chief Executive Officer of Mallinckrodt. "We're increasing our focus on innovative medicines and therapies like terlipressin and StrataGraft®, and recently acquired products stannsoporfin, xenon gas and OCR-002 – as well as, at the potential close of the Sucampo acquisition, VTS-270 and CPP-1X – that can make a real difference in patient populations with very high unmet medical needs. With this evolving emphasis on a development portfolio of treatments for seriously ill infants and adults, these hemostasis products are now less strategic for us."

In the twelve months preceding September 29, 2017, Mallinckrodt's net sales of hemostasis products were $56.2 million, substantially all of which related to RECOTHROM and PREVELEAK. The sale of the two products to Baxter does not qualify for GAAP1 treatment as a discontinued operation, and therefore historical sales and earnings results will not be recast to reflect the divestiture. The sale is anticipated to dilute Mallinckrodt's adjusted diluted earnings per share by $0.10 to $0.15 in 2018, which will be offset by shares repurchased during the fourth quarter 2017. Proceeds from the sale will be used by the company toward paying down debt.

Mallinckrodt will retain RAPLIXA® (Fibrin sealant (human)) for topical use and is evaluating strategic options for this product. Due to its shift in focus to the critical care, autoimmune and rare disease spaces, the company will discontinue marketing of the product upon close of the Baxter transaction. As a result, a write-off for this product will be reported for the fourth quarter 2017.

Mr. Trudeau concluded, "Mallinckrodt will continue to proactively shape and refine its Specialty Brands segment. Our long-term objective is to build a diversified specialty pharmaceuticals business focused on both commercialized and pipeline products for patients with severe and critical conditions. We are creating a rich development portfolio of innovative, cutting-edge new treatments and plan to bring them successfully to market. When products become non-core or can potentially better flourish in the hands of others, we will divest them – freeing us to acquire and focus on products more closely aligned with our long-range strategic growth goals."

The closing of the transaction is subject to the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions. Mallinckrodt expects to complete the transaction in the first half of 2018.

ABOUT RECOTHROM
RECOTHROM, Thrombin topical (Recombinant), is a topical thrombin indicated to aid hemostasis whenever oozing blood and minor bleeding from capillaries and small venules is accessible and control of bleeding by standard surgical techniques (such as suture, ligature, or cautery) is ineffective or impractical in adults and pediatric populations greater than or equal to one month of age.

Important Risk Information
Contraindications: Do not inject directly into the circulatory system. Do not use for the treatment of massive or brisk arterial bleeding. Do not administer to patients with a history of hypersensitivity to RECOTHROM, any components of RECOTHROM or hamster proteins.

Warnings and precautions: RECOTHROM may cause thrombosis if it enters the circulatory system. Apply topically. DO NOT INJECT. Hypersensitivity reactions, including anaphylaxis, may occur.

The most common adverse reaction (incidence 6%) was thromboembolic events. Antibody formation to RECOTHROM occurred in < 1% of patients. None of the antibodies detected neutralized native human thrombin.

Full prescribing information is available here.

ABOUT PREVELEAK
PREVELEAK Surgical Sealant is indicated for use in vascular reconstructions to achieve adjunctive hemostasis by mechanically sealing areas of leakage.

Important Risk Information
Contraindications: PREVELEAK is not for use in patients with known allergies to materials of bovine or shellfish origin. PREVELEAK is not for intravascular use. PREVELEAK is not for cerebrovascular repair or cerebrospinal leak repair.

Warnings: Do not use PREVELEAK as a substitute for sutures or staples. Avoid exposure of PREVELEAK to nerves. Do not use PREVELEAK in the presence of obvious infection and use it with caution in contaminated areas of the body. Do not allow either the uncured or polymerized form of PREVELEAK to contact circulating blood. PREVELEAK contains a material of animal origin that may be capable of transmitting infectious agents. Repeated use of PREVELEAK in subsequent surgeries has not been studied. Hypersensitivity reactions were not seen using PREVELEAK, but hypersensitivity of bovine serum albumin has been reported.

Full instructions for use are available here.

ABOUT RAPLIXA
RAPLIXA is a fibrin sealant (human) indicated as an adjunct to hemostasis for mild to moderate bleeding in adults undergoing surgery when control of bleeding by standard surgical techniques (such as suture, ligature, and cautery) is ineffective or impractical. RAPLIXA is used in conjunction with an absorbable gelatin sponge (USP).

Important Risk Information
Contraindications: Do not use intravascularly. Do not use for the treatment of severe or brisk arterial bleeding. Do not use in patients known to have anaphylactic or severe systemic reactions to human blood products.

Warnings and precautions: Thromboembolic events may result from intravascular application of RAPLIXA. Air or gas embolism can occur using air- or gas-pressurized sprayers to administer fibrin sealants. Operate the device according to the manufacturer's instructions. RAPLIXA may carry a risk of transmitting infectious agents, such as viruses, and theoretically, the Creutzfeldt-Jakob disease (CJD) agents, despite manufacturing steps designed to reduce the risk of viral transmission. Allergic type hypersensitivity reactions may occur. If allergic type hypersensitivity symptoms occur, discontinue administration immediately.

The most commonly reported adverse reactions (> 5% subjects) were procedural pain, nausea, constipation, pyrexia, and hypotension.

Full prescribing information is available here.

About Mallinckrodt
Mallinckrodt is a global business that develops, manufactures, markets and distributes specialty pharmaceutical products and therapies. Areas of focus include autoimmune and rare diseases in specialty areas like neurology, rheumatology, nephrology, pulmonology and ophthalmology; immunotherapy and neonatal respiratory critical care therapies; and analgesics. The company's core strengths include the acquisition and management of highly regulated raw materials and specialized chemistry, formulation and manufacturing capabilities. The company's Specialty Brands segment includes branded medicines and its Specialty Generics segment includes specialty generic drugs, active pharmaceutical ingredients and external manufacturing. To learn more about Mallinckrodt, visit www.mallinckrodt.com.

Mallinckrodt uses its website as a channel of distribution of important company information, such as press releases, investor presentations and other financial information. It also uses its website to expedite public access to time-critical information regarding the company in advance of or in lieu of distributing a press release or a filing with the U.S. Securities and Exchange Commission disclosing the same information. Therefore, investors should look to the Investor Relations page of the website for important and time-critical information. Visitors to the website can also register to receive automatic e-mail and other notifications alerting them when new information is made available on the Investor Relations page of the website.

Cautionary Statements Related to Forward-Looking Statements
Statements in this document that are not strictly historical, including statements regarding the proposed divestiture, the expected timetable for completion of the divestiture, future financial condition and operating results, economic, business, competitive and/or regulatory factors affecting Mallinckrodt's businesses and any other statements regarding events or developments that the company believes or anticipates will or may occur in the future, may be "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, and involve a number of risks and uncertainties.

There are a number of important factors that could cause actual events to differ materially from those suggested or indicated by such forward-looking statements and you should not place undue reliance on any such forward-looking statements. These factors include risks and uncertainties related to, among other things: the parties' ability to satisfy the conditions to the divestiture, including the expiration of the waiting period (and any extensions thereof) under the Hart-Scott-Rodino Antitrust Improvements Act, and complete the divestiture on the anticipated timeline or at all; general economic conditions and conditions affecting the industries in which Mallinckrodt operates; Mallinckrodt's ability to obtain regulatory approval to market its products or the timing of such approval process; the commercial success of Mallinckrodt's products; Mallinckrodt's ability to realize anticipated growth, synergies and cost savings from acquisitions; conditions that could necessitate an evaluation of Mallinckrodt's goodwill and/or intangible assets for possible impairment; changes in laws and regulations; Mallinckrodt's ability to successfully integrate acquisitions of operations, technology, products and businesses generally and to realize anticipated growth, synergies and cost savings; Mallinckrodt's and Mallinckrodt's licensers' ability to successfully develop or commercialize new products; Mallinckrodt's and Mallinckrodt's licensers' ability to protect intellectual property rights; Mallinckrodt's ability to receive procurement and production quotas granted by the U.S. Drug Enforcement Administration; customer concentration; Mallinckrodt's reliance on certain individual products that are material to its financial performance; cost containment efforts of customers, purchasing groups, third-party payers and governmental organizations; the reimbursement practices of a small number of public or private insurers; pricing pressure on certain of Mallinckrodt's products due to legal changes or changes in insurers' reimbursement practices resulting from recent increased public scrutiny of healthcare and pharmaceutical costs; limited clinical trial data for H.P. Acthar Gel; complex reporting and payment obligations under healthcare rebate programs; Mallinckrodt's ability to navigate price fluctuations; future changes to U.S. and foreign tax laws; Mallinckrodt's ability to achieve expected benefits from restructuring activities; complex manufacturing processes; competition; product liability losses and other litigation liability; ongoing governmental investigations; material health, safety and environmental liabilities; retention of key personnel; conducting business internationally; the effectiveness of information technology infrastructure; and cybersecurity and data leakage risks.

These and other factors are identified and described in more detail in the "Risk Factors" section of Mallinckrodt's Annual Report on Form 10-K for the fiscal year ended September 30, 2016, as well as such section of Ocera Therapeutics' Annual Report on Form 10-K for the fiscal year ended December 31, 2016. The forward-looking statements made herein speak only as of the date hereof and Mallinckrodt does not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise, except as required by law.

CONTACTS
Investor Relations      
Coleman N. Lannum, CFA
Senior Vice President, Investor Strategy and IRO
314-654-6649
cole.lannum@mallinckrodt.com

Daniel J. Speciale, CPA
Director, Investor Relations
314-654-3638
daniel.speciale@mallinckrodt.com

Media
Rhonda Sciarra
Senior Communications Manager
314-654-8618
rhonda.sciarra@mallinckrodt.com

Meredith Fischer
Chief Public Affairs Officer
314-654-3318
meredith.fischer@mallinckrodt.com

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1
Generally accepted accounting principles in the U.S.

 

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SOURCE Mallinckrodt plc