) shares inched up 1.1% after the company announced the completion
of its acquisition of Questcor Pharmaceuticals, Inc. in a deal
valued at approximately $5.8 billion. Meanwhile, Mallinckrodt is
also set to join the S&P 500 after market closes on Aug 18.
The Mallinckrodt-Questcor transaction was completed post strong
approval by shareholders of both the companies. As per the terms of
the deal, shareholders of Questcor received $30.00 per share in
cash and 0.897 Mallinckrodt shares for each share of Questcor
The transaction is expected to be immediately accretive to
Mallinckrodt's bottom line in fiscal 2014 and significantly
accretive in fiscal 2015.
Mallinckrodt's EPS guidance (provided earlier this month along with
third quarter fiscal 2014 results) of $4.00 to $4.30 excludes the
impact of the Questcor acquisition. Mallinckrodt plans to provide
guidance for fiscal 2015 which will include the Questcor deal in
Questcor's lead product H.P. Acthar Gel (approved for 19
indications including acute exacerbations of multiple sclerosis and
infantile spasms) is expected to be a strong complement to
Mallinckrodt's portfolio of specialty brands, which include
Ofirmev, Exalgo and Xartemis XR. H.P. Acthar Gel generated revenues
of $761.3 million in 2013, up 49.6%.
Mallinckrodt carries a Zacks Rank #1 (Strong Buy). Investors
looking for other well-ranked stocks in the health care sector can
consider Akorn, Inc. (
), Acura Pharmaceuticals, Inc. (
) and AstraZeneca (
). While Akorn carries a Zacks Rank #1 (Strong Buy), AstraZeneca
and Acura are Zacks Rank #2 (Buy) stocks.
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