Mallinckrodt Considers Sale Of Opioid Business

Mallinckrodt Considers Sale Of Opioid Business

Introduction

Bankrupt pharmaceutical company Mallinckrodt is reportedly in discussions with major investors regarding the potential sale of some or all of its business divisions, which may result in its withdrawal from the opioid industry.

Investors who are positioned to gain control through the company's ongoing bankruptcy proceedings are proposing that Mallinckrodt consider splitting up its business segments, as indicated in the report.

Mallinckrodt has not yet provided a response to requests for comment. The Ireland-based company filed for bankruptcy in the United States for the second time just last month, as part of a restructuring plan aimed at reducing its obligations by $1 billion to victims of the U.S. opioid crisis.

Mallinckrodt, a manufacturer of both branded and generic drugs, initially filed for bankruptcy in 2020 to address its substantial debt burden, legal disputes related to its marketing of highly addictive generic opioids, and controversies surrounding its drug pricing.

In its efforts to emerge from bankruptcy in June 2022, the company, while denying any wrongdoing, agreed to a $1.7 billion settlement to resolve approximately 3,000 lawsuits alleging deceptive marketing practices to boost opioid sales.

Additionally, Mallinckrodt disclosed last month in filings with the Securities and Exchange Commission that it had received a grand jury subpoena from the U.S. Attorney's Office for the Western District of Virginia, which sought information about the company's reporting of suspicious opioid orders to the U.S. Drug Enforcement Administration.

Mallinckrodt filed for bankruptcy protection over three years ago, and it successfully exited Chapter 11 last year after reaching a nationwide settlement of $1.7 billion as part of its bankruptcy reorganization plan.

Due to concerns from its lenders regarding a $200 million payment associated with opioid-related lawsuits, the company announced in June that it was exploring the possibility of a second bankruptcy filing, along with other potential alternatives.

Numerous cities and counties are poised to receive substantial funds from Mallinckrodt as part of settlements related to the opioid crisis. Notable examples include Kansas, Washington, and New York, which are awaiting payments of $6 million, $18 million, and $58.5 million, respectively.