Drugmakers Mallinckrodt Pharmaceuticals and Endo Inc announced they have entered into a merger agreement to create a larger, diversified pharmaceuticals company valued at about $6.7 billion.
Both Mallinckrodt and Endo have faced significant financial challenges in recent years driven by opioid-related lawsuits, leading to multiple bankruptcy filings.
The new entity is expected to generate $3.6 billion in revenue and $1.2 billion in adjusted EBITDA by 2025, with anticipated cost synergies of $150 million by the third year.
The combined business will feature a portfolio of branded drugs, sterile injectables, and generics. Following the merger, the companies plan to spin off the sterile injectables and generics segment.
US-listed shares of Endo were down around 5.8% on Thursday.
'Highly complementary'
“Our businesses are highly complementary, with durable, on-market products in our branded portfolios and extensive capabilities across the value chain in our generics businesses,” Mallinckrodt CEO Siggi Olafsson said in a statement.
“This exciting combination will create a larger and more diversified entity with the scale and resources needed to unlock the full potential of both companies.”
Scott Hirsch, Endo interim CEO, added: "We believe this combination with Mallinckrodt, along with the subsequent separation of the combined sterile injectables and generics business, presents a unique opportunity to deliver significant shareholder value.”
Mallinckrodt will remain the holding company, listed on the New York Stock Exchange.
Endo shareholders will receive $80 million in cash and own 49.9% of the combined business.
The deal is set to close in the second half of 2025.