Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Mallinckrodt, the Pharmaceuticals business of Covidien plc (COV - Analyst Report), has won the U.S. Food and Drug Administration (FDA) approval to manufacture and sell a generic version of CONCERTA (methylphenidate HCl) Extended-Release (ER) Tablets USP (CII) in 27 mg, 36 mg and 54 mg dosage strengths.

The tablets are used to treat patients, aged between 6 and 65, suffering from Attention Deficit Hyperactivity Disorder (ADHD). ADHD is a neurobehavioral disorder, usually diagnosed in childhood. Children with ADHD are inattentive, hyperactive and impulsive. Despite being a long-term chronic condition, it can be successfully treated with proper therapy and medication.

According to The American Psychiatric Association, roughly 3%–7% of school children have ADHD. The FDA approval is likely to boost Covidien’s Pharmaceutical business, as the company prepares to convert it into a stand-alone company by mid-2013. Covidien intends to divest Mallinckrodt in an effort to focus on its high-margin surgical product portfolio.

Mallinckrodt is a leading manufacturer of bulk acetaminophen in the world and the largest supplier of opioid pain management drugs in the U.S. It also features in the top 10 list of prescription-based generic pharmaceuticals manufacturers in the U.S.

The company plans to launch the Methylphenidate HCl ER Tablets in the 27 mg dosage strength immediately, followed by the 36 mg and 54 mg dosage strengths by the first quarter of 2013. Furthermore, Mallinckrodt will be submitting a supplement to its approved abbreviated new drug application for the 18 mg dosage strength in the same period. Management believes that it holds a six-month exclusivity period for each of the respective dosage strengths following its commercial launch.

In August last year, FDA had also approved Mallinckrodt’s EXALGO (hydromorphone HCl) Extended-Release Tablets 32 mg (CII) for Opioid-Tolerant Patients. Based on the latest FDA clearance and consistent operational efficiency, Covidien raised its fiscal 2013 sales growth guidance for the Pharmaceuticals business to 3%—6% from its earlier guidance of 1%—4%.

Covidien’s stock price increased 2.54% to close at $57.74 on December 31, 2012. The company’s pharmaceuticals product line faces stiff competition from companies such as Johnson & Johnson (JNJ - Analyst Report) and Pfizer Inc. (PFE - Analyst Report).

Currently, we have a long-term Neutral recommendation on the stock, which carries a short-term Zacks #3 Rank (Hold).
 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GROUP DXYN 15.84 +7.90%
BOFL HOLDING BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%