Irish specialty pharmaceutical company Mallinckrodt PLC (NYSE:MNK) said Tuesday that it has plans to buy Cadence Pharmaceuticals Inc. (NASDAQ:CDAX), based out of San Diego, California, for $1.3 billion. Mallinckrodt will pay $14 per share at 32 percent premium to Cadence’s 30-day volume-weighted average trading price, the New York Times reports.
Cadence, a biopharmaceutical company, specializes in commercializing drugs for use in hospitals; Mallinckrodt hopes that the acquisition of Cadence will help the company expand both its specialty drug offerings and its reach in the hospital market. ”The acquisition of Cadence Pharmaceuticals is consistent with our goal of becoming a leading global specialty pharmaceuticals company,” said Mark Trudeau, Mallinckrodt’s president and CEO, in a press release.
Cadence’s product is Ofirmev, an intravenous painkiller and fever reducer first released onto the market in 2010 and which is expected to have generated $110.5 million in sales for the year 2013, compared with $50.1 million in product revenues in 2012. Cadence has reported strong growth for the drug since it initially appeared on the market four years ago.
“Ofirmev’s growth is driven by an expanding base of physicians who are prescribing the product for an increasing number of surgical patients,” Trudeau said. ”The product will be an outstanding addition to the brands component of Mallinckrodt’s specialty pharmaceutical segment.”
Trudeau added that he believes Mallinckrodt can help continue to advance the drug’s growth: “We believe Mallinckrodt is well-positioned to further accelerate the trajectory of Ofirmev and realize the full value of this product in the marketplace.”
Mallinckrodt spun off Covidien PLC in July. The company currently makes drugs primarily for pain management, as well as cerebral or spinal spasticity, inflammatory diseases, and depression. The company also makes generic drugs and active pharmaceutical ingredients, according to Reuters.
The deal is expected to close in mid- to late-March according to a Mallinckrodt press release. The company says it expects the acquisition immediately add to its fiscal 2014 adjusted earnings per share and as well as add significantly to its fiscal 2015 adjusted earnings per share.