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Mallinckrodt to Pay $100M Fine to FTC for Questcor Matter
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Mallinckrodt plc , will have to pay a fine of $100 million to the U.S. Federal Trade Commission (FTC) to resolve the latter’s investigation into the acquisition of Synacthen Depot by its Questcor division. Synacthen Depot, is a synthetic adrenocorticotropic hormone (ACTH) drug.
Mallinckrodt's acquired Questcor in August 2014 and added Acthar Gel to its portfolio, a specialty drug used as a treatment for infantile spasms. The FTC alleged that Questcor illegally acquired the U.S. rights to develop Synacthen Depot, a competing drug to its Acthar gel, the approved ACTH drug in the U.S. as it threatened FTC’s monopoly in the U.S.
The acquisition led to a competition by not allowing any other company from using the Synacthen assets to develop a synthetic ACTH drug, thereby preserving Questcor’s monopoly and allowing it to maintain extremely high prices for Acthar.
Mallinckrodt’s share price has declined 27.8% in the past one year, compared with the Zacks classified Medical-Generics Drugs industry’s fall of 33%.
Per the agreement, Mallinckrodt will license Synacthen Depot to a licensee- Marathon Pharmaceuticals, LLC , who is identified by the FTC for the development and has got the FDA approval for the drug with two indications – infantile spasms (IS) and nephrotic syndrome (NS).
The licensee will also acquire exclusive rights to the Synacthen trademark in the U.S. However, Mallinckrodt was not in agreement with the allegations outlined in the FTC's complaint.
Mallinckrodt currently derives no U.S. revenue from Synacthen Depot, and therefore the net sales of Mallinckrodt will not be affected on the resolution for this matter.
Zacks Rank & Key Picks
Mallinckrodt currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the health care sector include Anika Therapeutics Inc. (ANIK - Free Report) , Enzo Biochem, Inc. (ENZ - Free Report) and Sunesis Pharmaceuticals, Inc. . All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Anika’s earnings estimates for 2016 and 2017 were up 3.9% and 0.5%, respectively, over the last 60 days. The company recorded a positive earnings surprise in each of the last four quarters, the average being 33.14%. Its share price was up 35.6% in the past one year.
Enzo Biochem’s loss estimates for 2017 narrowed 5.88% over the past 60 days. The company recorded a positive earnings surprise in three of the last four quarters, the average being 22.50%. Its share price was up 49% in the past one year.
Sunesis’ loss estimates narrowed 5.06% and 8.80% for 2017 and 2018, respectively, over the past 60 days. The company recorded a positive earnings surprise in three of the last four quarters, the average being 0.54%. Its share price was down 19% in the past one year.
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Mallinckrodt to Pay $100M Fine to FTC for Questcor Matter
Mallinckrodt plc , will have to pay a fine of $100 million to the U.S. Federal Trade Commission (FTC) to resolve the latter’s investigation into the acquisition of Synacthen Depot by its Questcor division. Synacthen Depot, is a synthetic adrenocorticotropic hormone (ACTH) drug.
Mallinckrodt's acquired Questcor in August 2014 and added Acthar Gel to its portfolio, a specialty drug used as a treatment for infantile spasms.
The FTC alleged that Questcor illegally acquired the U.S. rights to develop Synacthen Depot, a competing drug to its Acthar gel, the approved ACTH drug in the U.S. as it threatened FTC’s monopoly in the U.S.
The acquisition led to a competition by not allowing any other company from using the Synacthen assets to develop a synthetic ACTH drug, thereby preserving Questcor’s monopoly and allowing it to maintain extremely high prices for Acthar.
Mallinckrodt’s share price has declined 27.8% in the past one year, compared with the Zacks classified Medical-Generics Drugs industry’s fall of 33%.
Per the agreement, Mallinckrodt will license Synacthen Depot to a licensee- Marathon Pharmaceuticals, LLC , who is identified by the FTC for the development and has got the FDA approval for the drug with two indications – infantile spasms (IS) and nephrotic syndrome (NS).
The licensee will also acquire exclusive rights to the Synacthen trademark in the U.S. However, Mallinckrodt was not in agreement with the allegations outlined in the FTC's complaint.
Mallinckrodt currently derives no U.S. revenue from Synacthen Depot, and therefore the net sales of Mallinckrodt will not be affected on the resolution for this matter.
Zacks Rank & Key Picks
Mallinckrodt currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the health care sector include Anika Therapeutics Inc. (ANIK - Free Report) , Enzo Biochem, Inc. (ENZ - Free Report) and Sunesis Pharmaceuticals, Inc. . All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Anika’s earnings estimates for 2016 and 2017 were up 3.9% and 0.5%, respectively, over the last 60 days. The company recorded a positive earnings surprise in each of the last four quarters, the average being 33.14%. Its share price was up 35.6% in the past one year.
Enzo Biochem’s loss estimates for 2017 narrowed 5.88% over the past 60 days. The company recorded a positive earnings surprise in three of the last four quarters, the average being 22.50%. Its share price was up 49% in the past one year.
Sunesis’ loss estimates narrowed 5.06% and 8.80% for 2017 and 2018, respectively, over the past 60 days. The company recorded a positive earnings surprise in three of the last four quarters, the average being 0.54%. Its share price was down 19% in the past one year.
Mallinckrodt PLC Price
Mallinckrodt PLC Price | Mallinckrodt PLC Quote
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Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>