Mallinckrodt to acquire biopharmaceutical firm Cadence Pharmaceuticals for $1.3 bn

British specialty pharmaceuticals company Mallinckrodt Plc today struck a deal to acquire US-based biopharmaceutical firm Cadence Pharmaceuticals Inc, for $1.3 billion.

Dublin, Ireland-based Mallinckrodt will pay $14 per share in cash, a 32-per cent premium to Cadence's trailing 30-trading-day volume weighted average price of $10.62 per share.

Mallinckrodt expects to fund the deal through cash at hand and debt financing commitments from affiliates of Deutsche Bank Securities.

California-based Cadence is a biopharmaceutical company focused on commercialising products used in hospital settings.

The company's main product is acetaminophen injection called Ofirmev, which is a proprietary intravenous formulation of acetaminophen used to treat mild to moderate pain and moderate to severe pain with adjunctive opioid analgesics.

Ofirmev is used for patients with severe hepatic impairment, severe active liver disease or with known hypersensitivity.

Ofirmev is currently being used in more than 2,350 US hospitals and has been used to treat an estimated 6 to 7 million patients since its launch in January 2011.

Cadence reported that it expects net revenues of $110.5 million for Ofirmev in 2013 compared to $50.1 million in 2012.

Mallinckrodt said that the acquisition adds another powerful growth product to its portfolio of core controlled substance generics and its growing roster of brands like Exalgor, Gablofen, Pennsaid and, if approved, Xartemis XR and MNK-155.

"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,'' he added.

Mallinckrodt is a global specialty pharmaceutical and medical imaging business that develops, manufactures, markets and distributes specialty pharmaceutical products and medical imaging agents.

The company's Specialty Pharmaceuticals segment includes branded and specialty generic drugs and active pharmaceutical ingredients, and the Global Medical Imaging segment includes contrast media and nuclear imaging agents.

Mallinckrodt has around 5,500 employees worldwide and a commercial presence in around 70 countries. The company's had revenues of $2.2 billion in 2012.