Mallinckrodt plc, a prominent global specialty pharmaceutical firm, has announced a major deal with CVC Capital Partners, one of the world’s leading investment firms. Under the newly signed definitive agreement, CVC Capital Partners Fund IX will acquire Mallinckrodt’s Therakos business for approximately $925 million, subject to customary adjustments. The sale marks a significant move for both companies, as CVC aims to enhance the development and global reach of Therakos’ extracorporeal photopheresis (ECP) system.

Strategic Acquisition to Boost Therakos’ Growth

The Therakos business, renowned for its fully integrated ECP delivery system, is widely recognized for its efficacy in treating immune-related diseases. Approved for use in key markets including the United States, Canada, Europe, Japan, Australia, and Latin America, the Therakos platform is a preferred choice among healthcare providers and patients alike. The acquisition by CVC Capital Partners is expected to propel the continued research, development, and geographic expansion of Therakos, capitalizing on CVC’s extensive experience in the healthcare sector.

Cathrin Petty and Phil Robinson, part of CVC’s Healthcare team, expressed their enthusiasm about the deal. They noted the significant opportunities to expand Therakos’ indications and enter new markets, aiming to extend the reach of this innovative treatment to more patients globally. The acquisition will also see key Therakos employees transitioning with the business, ensuring continuity and ongoing support for the product.

Mallinckrodt’s Strategic Focus and Financial Impact

Siggi Olafsson, President and Chief Executive Officer of Mallinckrodt, highlighted the strategic importance of the transaction. He stated that the sale underscores Mallinckrodt’s commitment to its strategic priorities and value creation for stakeholders. The proceeds from the sale will be used to reduce Mallinckrodt’s net debt by over 50%, a move expected to strengthen the company’s financial position.

The transaction is anticipated to be completed in the fourth quarter of 2024, pending regulatory approvals and other standard closing conditions. Advisors for the deal include Lazard, serving as financial advisor to Mallinckrodt, with Wachtell, Lipton, Rosen & Katz, Arthur Cox, and A&O Shearman providing legal counsel. CVC Capital Partners is advised by UBS, Freshfields Bruckhaus Deringer, PWC, and Candesic.

Market Trends and Future Outlook

Global ECP Market Dynamics: The global market for ECP systems is witnessing significant growth, driven by increasing awareness and adoption of advanced therapies for immune-related conditions. The Therakos acquisition positions CVC Capital Partners well within this expanding market, providing them with a platform that is already established and highly respected.

Strategic Positioning in Specialty Pharma: This transaction highlights Mallinckrodt’s strategic shift towards focusing more on its core areas and lessening financial burdens. By divesting non-core assets, Mallinckrodt can focus resources on areas with the highest growth potential and strategic importance.

Investment and Expansion Strategy: For CVC Capital Partners, the acquisition aligns with their strategy to invest in healthcare sectors with strong growth prospects and innovative technologies. CVC’s extensive network and financial resources will likely accelerate Therakos’ expansion into new markets and further development of its technology.

The acquisition of Therakos by CVC Capital Partners represents a strategic alignment with CVC’s robust portfolio in life sciences and healthcare. The deal not only reflects CVC’s commitment to expanding its healthcare investments but also provides Therakos with a partner capable of accelerating its growth trajectory. With a focus on enhancing Therakos’ research and geographic reach, CVC is poised to leverage its industry expertise to maximize the potential of this leading ECP system.

Experts predict that the move will result in enhanced product offerings and a stronger market presence for Therakos, making advanced therapeutic solutions more accessible to a broader patient population globally. The strategic resources and investment from CVC are expected to drive significant advancements in Therakos’ capabilities and market reach.

The sale of Therakos by Mallinckrodt to CVC Capital Partners for $925 million is a landmark transaction in the specialty pharmaceutical industry, marking a significant step in both companies’ strategic development. As the transaction moves towards completion, the healthcare industry will be watching closely to see how this partnership transforms Therakos’ market position and influences the broader landscape of specialty pharmaceuticals and treatment of immune-related diseases.

  CVC Capital Partners, ECP Systems, Healthcare M&A, Mallinckrodt, market expansion, specialty pharmaceuticals, Therakos