Mallinckrodt’s mystery mega meeting — an analyst’s take
(St. Louis Business Journal)
Harrison said some progress has been made on Mallinckrodt’s product pipeline since spinning off (again) as an independent company, so investors are going to want to see more movement on the pipeline within the next year. Management probably called the meeting to get everyone on the same page, Harrison sat Crawford doesn’t think that price reflects the company’s prospects and believes they can gain another 50% over the next few years. “Good performance will come from continued pricing power,” he says.
August 30, 2013 (Samantha Liss)
Employees convened this week at Mallinckrodt’s Hazelwood headquarters for a leadership meeting, company officials confirmed.
Sources said employees from all over the globe flew into St. Louis for the large company meeting. But Mallinckrodt officials would not disclose any more details, so we asked Scott Harrison, senior research analyst at Argent Capital Management in Clayton, to weigh in.
Harrison said some progress has been made on Mallinckrodt’s product pipeline since spinning off (again) as an independent company, so investors are going to want to see more movement on the pipeline within the next year. Management probably called the meeting to get everyone on the same page, Harrison said.
He said the company is focusing heavily on “beefing up” its branded pain products, a “sweet spot” for the pharmaceutical company.
But a huge component of that is adding abuse deterrents to the pain products, which the U.S. Food and Drug Administration continues to seek in order to curb addiction.
There are signs that the FDA already likes Mallinckrodt’s MNK-795 pain medication that was developed with these characteristics, Harrison said, because it’s already been fast-tracked to receive approval through the priority review process.
Harrison said few drug companies make abuse-deterrent pain medications well, so if Mallinckrodt can deliver on a product the FDA likes, it will make it more difficult for generics to enter the market and siphon off Mallinckrodt revenue.
If the barrier to entry is higher, Harrison said that could mean more revenue over a longer period of time for Mallinckrodt in an already high-margin sector.
Mallinckrodt will focus next on getting MNK-155, another branded pain medication, through the pipeline, all of which is going to “give investors confidence” in the company’s ability to advance as an independent company, Harrison said.
Mallinckrodt reported sales of $2 billion in 2012 and expects up to 11 percent sales growth in its first year as a standalone company. Mallinckrodt was spun off from its parent company, Covidien, this summer.
Mallinckrodt is led by CEO and President Mark Trudeau.
