Who remembers Mallinckrodt? Anyone who has followed MSB since...

Who remembers Mallinckrodt? Anyone who has followed MSB since 2017 would remember Mallinckrodt (MNK:NYQ).

MNK, which appears to be on the cusp of bankruptcy, has been embroiled in generic drug price fixing litigation, as well as opioid litigation in the US. In December 2016 it entered into an agreement with MSB giving MNK 9 months of exclusive negotiation for the right to partner with MSB for CLBP and/or aGvHD. In return for this period of exclusivity MNK acquired about 20m shares at A$1.48, at a time when MSB was stretched for capital. The agreement was a fizzer in that the 9 months passed without any agreement being reached. Since December 2016 MNK’s share price has crashed from around US$53.00 to US1.41. Management have just accepted large payments to stay on in the event the company goes bankrupt. The company is on its knees.

So MSB dodged a bullet. It’s crazy to think that it might have given away a chunk of the CLBP and aGvHD profit to a company that is now barely standing --- I expect SI figured early in 2017 that MNK was not going to be a suitable partner. Here we now are, with MSB on the cusp of FDA approval for aGvHD for which it is set to go it alone in the US, with estimated annual sales of US$267m.*

Ironically, MNK is counting on FDA approval for Terilpressin to treat HRS-1, a condition involving kidney failure in people with cirrhosis, with estimated annual sales of US$154m.* It had an Adcomm meeting on 15 July which recommended approval (8 in favour, 7 against) even though the safety profile is extremely poor (respiratory failure & sepsis events). From the remarks of one of the experts (Dr Assis) following the vote:

“I voted ‘yes’ albeit with some reservation. Currently there is nothing else available or close to effective to give these patients. The benefit vs. risk is a critical issue today and a better definition of predictors of complications such as respiratory failure is really absolutely key and that needs to be better studied by the FDA prior to approval.”

Terilpressen has a PDUFA date of 12 September – yes, this Saturday, so watch it with interest. I expect the PDUFA date will be extended. But with a poor safety profile and an AdComm vote of 8-7, if there was ever an application that the FDA would be likely to reject in spite of a favourable AdComm vote you would think that this would be it. If it doesn’t get up, I’d say it’s curtains for MNK.

As for the naysayers suggesting that Ryoncil may not get approved – yes, anything is possible, but given the clear unmet need, the seriousness of the treated condition, the age of the patient population, and the exemplary safety profile (all of which is acknowledged by the FDA) combined with an 8 to 1 AdComm vote in favour of approval, I’d say the odds of the Ryoncil application being rejected are in the order of 100 to 1.

(*These figures from Evaluate Pharma.)

GLTAH & DYOR