Baxter acquires surgical products

Baxter International Inc., a global medical products company, said Monday that it will acquire two hemostat and sealant products from Mallinckrodt.

It will acquire Recothrom Thrombin topical, the first and only stand-alone recombinant thrombin, and Preveleak Surgical Sealant, which is used in vascular reconstruction.

"Uncontrolled intraoperative bleeding can lead to a wide variety of clinical and economic complications for patients and hospitals. As a leading provider of advanced hemostats and sealants, Deerfield-based Baxter is focused on continually identifying solutions to help meet surgeons' varying needs," said Wil Boren, president of Baxter's Advanced Surgery business. "We are excited about the addition of Recothrom to help surgeons address less severe intraoperative bleeding and Preveleak to complement Baxter's existing portfolio of sealants for cardiovascular and other surgical specialties."

Thrombin is a proven blood coagulation agent -- used on its own or in combination with other hemostats -- that has been estimated to be used in more than one million patients per year in the United States to help surgeons address intraoperative bleeding.

Recothrom is a thrombin-based product indicated as an aid to hemostasis whenever oozing blood and minor bleeding from capillaries and small venules is accessible and control of bleeding by standard surgical techniques is ineffective or impractical in adults and pediatric populations greater than or equal to one month of age. As the only topical hemostat from recombinant DNA origin approved in the United States and Canada, Recothrom can be used in pediatric and adult patients with or without antibodies to bovine-derived thrombin.

The acquisition also includes Preveleak, a surgical sealant designed to seal suture holes formed during surgical repair of the circulatory system and to reinforce sutured connections between blood vessels. Preveleak augments Baxter's portfolio of complementary hemostats, sealants and tissue products used in cardiovascular and other surgeries, offering surgeons additional clinically differentiated products to address patients' varying needs. Preveleak is approved in the United States and European Union.

Sales of the proposed acquired products totaled approximately $56 million in the twelve months preceding Sept. 29. Upon closing, the deal is expected to be modestly accretive to Baxter's 2018 adjusted earnings and increasingly accretive thereafter. Under the terms of the agreement, Baxter will acquire Recothrom and Preveleak for an upfront payment of approximately $153 million and potential contingent payments in the future.

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

Mallinckrodt Diversifies Hospital Growth Portfolio, Acquiring Three Commercial-Stage, Global Specialty Hemostasis Brands From The Medicines Company

CHESTERFIELD, United Kingdom, Dec. 18, 2015 /PRNewswire/ -- Mallinckrodt plc (NYSE: MNK), a leading global specialty biopharmaceutical company, today announced that it has entered into a purchase agreement with The Medicines Company (NASDAQ: MDCO) under which subsidiaries of Mallinckrodt plc will acquire a global portfolio of three commercial-stage topical hemostasis drugs – RECOTHROM® Thrombin topical (Recombinant), PreveLeak™ Surgical Sealant, and RAPLIXA™ (Fibrin Sealant) – for an initial payment of approximately $175 million, inclusive of existing inventory. The transaction also includes potential added future considerations in the form of payments for achieving certain milestones, and is expected to be financed from cash on hand.

"Addition of this innovative portfolio of branded hemostats to our hospital platform is another demonstration of Mallinckrodt's 'acquire to invest' business strategy. Products that help control bleeding are essential to the vast majority of surgical practices. Yet this category – a market that has been estimated at $750 million in the U.S. and at least $1 billion globally – is an area in hospital products that has seen relatively little innovation and investment in recent years," said Mark Trudeau, Chief Executive Officer and President of Mallinckrodt.

Trudeau continued, "Acquiring and promoting leading hemostasis brand RECOTHROM alongside OFIRMEV® (acetaminophen) injection broadens Mallinckrodt's impact in the surgical suite for patients and physicians, and creates a strong framework to broadly commercialize innovative, highly durable new agents PreveLeak and RAPLIXA, which carry intellectual property protection to 2028 and 2031, respectively. As we continue to further diversify our portfolio, we're excited about the volume growth opportunity these products will add to our hospital offering for years to come."

On a reported U.S. GAAP1 basis, Mallinckrodt expects the transaction to be dilutive to its fiscal 2016 earnings per share (EPS); however, on an adjusted basis, the company expects the transaction to be neutral to EPS in fiscal 2016. On both a U.S. GAAP and adjusted basis, the company expects the transaction to be accretive to EPS beginning in fiscal 2017. Assuming a closing in the second quarter of fiscal 2016, the company expects the new products will add between $40 million and $45 million in incremental revenue in fiscal 2016, and provide low double-digit organic growth starting in fiscal 2017.

Through this acquisition, the company is expected to capitalize on synergies with Mallinckrodt's current U.S. commercial team focused on pain management in hospital surgical practice with OFIRMEV, the company's intravenous acetaminophen product indicated for the management of mild to moderate pain, and management of moderate to severe pain with adjunctive opioid analgesics. With expanded product offerings including OFIRMEV, RECOTHROM, PreveLeak and RAPLIXA, and with focused promotion, the company's commercial organization – supported by Mallinckrodt's strong sales, market access, national accounts and medical affairs teams – is expected to broaden access for patients who would benefit from these analgesic and hemostasis drugs.

Hemostasis Products

Each of the three drugs being acquired is approved by the U.S. Food and Drug Administration (FDA) and also in a number of other countries.

Introduced in 2009, RECOTHROM is widely used in the U.S., and is the first and only recombinant topical thrombin approved for use in adult and pediatric patients. It is FDA-approved as 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. RECOTHROM is also marketed internationally through distributors.

Upon closing, Mallinckrodt will invest in the commercial launch and ongoing market development of both PreveLeak and RAPLIXA in fiscal year 2016. Both have shorter preparation times and are easier to use and store than similar products in their categories. PreveLeak is more flexible than hemostasis glue products, is a surgical sealant and is indicated for use in vascular reconstructions to achieve adjunctive hemostasis by mechanically sealing areas of leakage. PreveLeak is currently marketed in Europe through distributors. 

RAPLIXA is the first and only powder fibrin sealant in ready-to-use room temperature form, with the RAPLIXASpray™ device allowing for even application over a diffuse bleeding site and greater versatility. RAPLIXA is comprised of human-plasma derived fibrinogen and thrombin and FDA-approved 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) and is applied directly or by using the RAPLIXASpray device.