(Reuters) – Mallinckrodt Plc (MNK.N) said on Thursday it planned to spin off its specialty generics business to shareholders by the second half of 2019, capping a two-year long effort to look for strategic options for the unit.
The business, which accounted for 26.5 percent of net sales in fiscal 2017, markets specialty generic drugs that include a variety of opioid-based products.
The new company will also include constipation drug Amitiza, which Mallinckrodt added through its acquisition of Sucampo Pharmaceuticals last year.
The other publicly traded company will hold the remaining business of specialty branded products such as infantile spasms and multiple sclerosis treatment Acthar.
The spun-off company will assume the Mallinckrodt name and will be led by current Chief Financial Officer Matthew Harbaugh, while the specialty branded business will be renamed later and will be headed by Chief Executive Officer Mark Trudeau.
The planned separation is expected through a pro-rata distribution of common stock to shareholders and will be tax-free, Mallinckrodt said.
India’s Aurobindo Pharma Ltd (ARBN.NS) earlier this year had looked to buy Mallinckrodt’s specialty generics business for about $800 million to $900 million but dropped the plan, according to media reports.
Reporting by Tamara Mathias and Saumya Sibi Joseph in Bengaluru; Editing by Sriraj Kalluvila