DUBLIN--(BUSINESS WIRE)--May. 3, 2013--
(NYSE:COV) today announced 2013 full year guidance for Mallinckrodt plc
as Mallinckrodt prepares to spin off from Covidien to become a separate,
publicly traded company in mid-2013.
Mallinckrodt’s fiscal year will end on September 27, 2013, with net
sales growth expected to be in the range of 7% to 11% versus 2012,
assuming foreign exchange rates at current levels. Net sales are
expected to be up 21% to 25% in Mallinckrodt’s Specialty Pharmaceuticals
segment and to decline 3% to 7% in its Global Medical Imaging segment.
For fiscal 2013, Mallinckrodt expects adjusted EBITDA1 as a
percentage of sales,2 to be in the range of 17% to 21%. The
guidance ranges for adjusted EBITDA reflect the financial results for
one quarter of Mallinckrodt operating as a standalone, public company
and three quarters reflecting the business as historically managed part
of Covidien prior to the separation.
The recurring annual operating costs for corporate staff, governance
functions and international infrastructure that were previously managed
on Mallinckrodt’s behalf by Covidien are expected to be $130 million.
This cost is approximately $40 million higher than what Mallinckrodt
incurred in fiscal 2012. These amounts do not reflect any additional
one-time costs related to establishing Mallinckrodt’s international
infrastructure as a standalone public company and/or any potential
savings that Mallinckrodt may achieve over time through organizational
realignment or restructuring.
For fiscal 2013, the effective tax rate, excluding one-time items, is
expected to be between 34% and 38%. The tax rate for the first three
quarters of fiscal 2013 will be calculated based upon the business as
historically managed as part of Covidien; while the effective tax rate,
excluding one-time items, for the fiscal fourth quarter is expected to
be between 28% and 32% and will be based upon the business operating as
a standalone public company. Capital expenditures are expected to be
$140 million to $160 million in fiscal 2013.
“As we approach our anticipated spin off, we are building on a strong
foundation and are well positioned for long-term growth,” said Mark
Trudeau, who will serve as President and CEO of Mallinckrodt. “We
delivered double-digit growth in sales for the second quarter of fiscal
2013, driven in large part by the launch of the 27 mg, 36 mg and 54 mg
tablet strengths of Methylphenidate HCl Extended-Release (ER) Tablets,
continued growth of EXALGO® and the addition of Gablofen®.
We have some challenges to navigate -- such as the loss of marketing
exclusivity for products in both our Brands and Generics portfolios, a
need for investment to successfully deliver on our pipeline
opportunities, and the ongoing challenge of the shutdown of the high
flux reactor in the Netherlands. But overall, we are optimistic that we
are well positioned for the spin and for a positive future as a
Key Products (see Important Risk Information
EXALGO (hydromorphone HCl) Extended-Release Tablets (CII) sales
are expected to be at least $100 million in fiscal 2013. Sales will
largely be driven by the addition of the 32 mg tablet strength approved
by the U.S. Food and Drug Administration (FDA) in August 2012-- which
provided additional flexibility to physicians in treating patients with
a single daily dose. EXALGO was granted marketing exclusivity by the FDA
as a prescription medication until March 2013. Although no generic
product has been launched to date, with the end of this period of
exclusivity, we expect generic competition in the marketplace to
negatively impact sales.
In December 2012, Mallinckrodt received approval from the FDA to
manufacture Methylphenidate HCl ER Tablets USP (CII), a generic version
of CONCERTA® for the treatment of Attention
Deficit Hyperactivity Disorder in tablet strengths of 27 mg, 36 mg and
54 mg. Sales of Methylphenidate HCl Extended-Release (ER) Tablets are
expected to be at least $125 million in fiscal year 2013. We believe we
hold a 180-day exclusivity period for each of the tablet strengths,
which began upon the commercial launch of each individual tablet
strength. The 27 mg tablet strength was launched upon approval, during
the first fiscal quarter of 2013, and the 36 mg and 54 mg tablet
strengths were launched during the second fiscal quarter. In February
2013, we submitted a supplement to our approved Abbreviated New Drug
Application (ANDA) for an 18 mg tablet strength.
The Mallinckrodt pipeline portfolio
contains various products and product candidates resulting from the
reformulation of existing molecules for treatment of pain and for
treatments in closely adjacent therapeutic areas. The following are key
products in our near-term pipeline.
MNK-795 is a reformulation of existing controlled substance
analgesic combination products with the addition of certain
characteristics designed to deter certain types of abuse. Mallinckrodt
has completed its pivotal Phase 3 trial of MNK-795 and is preparing to
submit a New Drug Application (NDA) to the FDA for review in the first
half of calendar 2013. If the product is accepted, reviewed and approved
by the FDA, we expect to incur significant expenses for commercializing
MNK-155 is also a reformulation of existing controlled substance
analgesic combination products, different from those in MNK 795, to
which we have added certain characteristics designed to deter certain
types of abuse. MNK-155 entered Phase 3 clinical development in the
first half of fiscal 2013.
MNK-395 is a 2% formulation of diclofenac topical solution. This
modified formulation, studied in twice-daily administration in patients
with osteoarthritis of the knee, was submitted to the FDA in June 2012.
In March 2013, the FDA requested additional information before this
application could be considered for approval. In compliance with this
request, Mallinckrodt is in the process of repeating a pharmacokinetic
study and we anticipate that we will be able to submit results from this
study to the FDA in the third quarter of calendar 2013.
Intrathecal Product Development – Mallinckrodt has an R&D
pipeline of additional formulations/presentations of Gablofen
(baclofen injection) for the management of severe spasticity.
Those formulations are at various stages of development. In addition to
Gablofen line extensions, we also have opioid products under
investigation for the treatment of pain for intrathecal administration
(i.e., injection into the sheath around the spinal cord), which, if
approved, could provide standardized, manufactured alternatives to
products that are currently only available through compounding
pharmacies. Additionally, this R&D pipeline may present opportunities
for development of certain products that may qualify to receive “orphan”
status from the FDA.
long-range objective is to become a leading specialty pharmaceutical
company. The company’s plan is to expand profitability through operating
leverage and growth in its Specialty Pharmaceutical segment.
Mallinckrodt Fiscal Year 2013 Guidance
Total Net Sales Growth
7% to 11%
Specialty Pharmaceuticals Net Sales Growth
21% to 25%
Global Medical Imaging Net Sales Growth
-7% to -3%
Methylphenidate HCl ER Tablets
Net sales of at least $125 million
Net sales of at least $100 million
Adjusted EBITDA1 as a percentage of sales
17% to 21%
Effective Tax Rate – Fiscal 2013
34% to 38%
Effective Tax Rate –Q4 Fiscal 2013
28% to 32%
$140 million to $160 million
The guidance ranges for adjusted EBITDA and effective tax rate assume a
June 28, 2013, separation date. The ranges reflect one quarter of
Mallinckrodt plc operating as a standalone, public company and three
quarters of financial results reflecting the business managed as part of
Covidien prior to the separation. The financial results for the three
quarters as part of Covidien include expense allocations for certain
functions provided by Covidien. While we believe such allocations are
reasonable, they may not be indicative of the actual expenses
Mallinckrodt plc would have incurred had it been operating as a
separate, publicly traded company. Actual costs that may have been
incurred if Mallinckrodt had been a standalone company would depend on a
number of factors, including the organizational structure, what
functions were outsourced or performed by employees and strategic
decisions made in areas such as information technology and
Supporting materials are now available on the Investor Relations section
of Covidien’s website: http://investor.covidien.com
CONFERENCE CALL AND WEBCAST
Covidien will hold a conference call for investors on Monday, May 6,
beginning at 8:00 a.m. ET to discuss its 2013 outlook. This call can be
accessed three ways:
At Covidien’s website: http://investor.covidien.com
By telephone: For both “listen-only” participants and those
participants who wish to take part in the question-and-answer portion
of the call, the telephone dial-in number in the U.S. is 866-515-2911.
For participants outside the U.S., the dial-in number is 617-399-5125.
The access code for all callers is 10325015.
Through an audio replay: A replay of the conference call will be
available beginning at 10:00 a.m. on May 6, 2013, and ending at 5:00
p.m. on May 13, 2013. The dial-in number for U.S. participants is
888-286-8010. For participants outside the U.S., the replay dial-in
number is 617-801-6888. The replay access code for all callers is
EXALGO IMPORTANT RISK INFORMATION
EXALGO® (hydromorphone HCI) Extended-Release Tablets (CII) is
indicated for the management of moderate to severe pain in opioid
tolerant patients requiring continuous, around- the-clock opioid
analgesia for an extended period of time.
IMPORTANT RISK INFORMATION
WARNING: ABUSE POTENTIAL, LIFE-THREATENING RESPIRATORY DEPRESSION,
and ACCIDENTAL EXPOSURE
EXALGO contains hydromorphone, an opioid agonist and a Schedule II
controlled substance with an abuse liability similar to other opioid
agonists, legal or illicit. Assess each patient’s risk for opioid abuse
or addiction prior to prescribing EXALGO. The risk for opioid abuse is
increased in patients with a personal or family history of substance
abuse (including drug or alcohol abuse or addiction) or mental illness
(e.g., major depressive disorder). Routinely monitor all patients
receiving EXALGO for signs of misuse, abuse, and addiction during
Life-threatening Respiratory Depression
Respiratory depression, including fatal cases, may occur with use of
EXALGO, even when the drug has been used as recommended and not misused
or abused. EXALGO is for use in opioid tolerant patients only. Proper
dosing and titration are essential and EXALGO should be prescribed only
by healthcare professionals who are knowledgeable in the use of potent
opioids for the management of chronic pain. Monitor for respiratory
depression, especially during initiation of EXALGO or following a dose
increase. Crushing, dissolving, or chewing the tablet can cause rapid
release and absorption of a potentially fatal dose of hydromorphone.
Accidental ingestion of EXALGO, especially in children, can result in
a fatal overdose of hydromorphone.
EXALGO is contraindicated in:
Opioid non-tolerant patients. Fatal respiratory depression could
occur in patients who are not opioid tolerant.
Patients with significant respiratory depression
Patients with acute or severe bronchial asthma in an unmonitored
setting or in the absence of resuscitative equipment
Patients with known or suspected paralytic ileus
Patients who have had surgical procedures and/or underlying
disease resulting in narrowing of the gastrointestinal tract, or
have “blind loops” of the gastrointestinal tract or
Patients with hypersensitivity (e.g., anaphylaxis) to
hydromorphone or sulfite-containing medications
EXALGO is indicated for opioid tolerant patients only. Patients
considered opioid tolerant are those who are taking at least 60 mg
oral morphine per day, 25 mcg transdermal fentanyl/hour, 30 mg oral
oxycodone/day, 8 mg oral hydromorphone/day, 25 mg oral oxymorphone/day
or an equianalgesic dose of another opioid, for a week or longer.
EXALGO is not intended for use as an as-needed analgesic and is not
indicated for the management of acute or postoperative pain. It is
contraindicated in patients who need management of mild pain or pain
not expected to persist.
Avoid concurrent use of alcohol and EXALGO. Concurrent use of EXALGO
with CNS depressants, including alcohol, increases risk of respiratory
depression, hypotension, and profound sedation, potentially resulting
in coma or death. EXALGO may impair the ability to drive a car or
Not intended in patients who have received MAO inhibitors within 14
days of starting EXALGO.
Use with caution and in reduced doses in older or debilitated
patients, as well as patients with renal or hepatic insufficiency,
Addison’s disease, delirium tremens, myxedema or hypothyroidism,
prostatic hypertrophy or urethral stricture, toxic psychosis. May
aggravate convulsions in patients with convulsive disorders; may
induce or aggravate seizures in some clinical settings. Consider use
of an alternate analgesic in patients with severe renal impairment.
Respiratory depression, which occurs more frequently in elderly or
debilitated patients, is the chief hazard with EXALGO.
Serious adverse events could also include hypotensive effects, GI
effects, cardiac arrest from overdose and precipitation of withdrawal.
Most common adverse events (>10%) seen in clinical studies (N=2474)
were: constipation (31%), nausea (28%), vomiting, somnolence,
headache, asthenia and dizziness.
Use EXALGO with extreme caution in patients susceptible to
intracranial effects of CO2 retention.
Do not abruptly discontinue EXALGO.
METHYLPENIDATE HCL EXTENDED RELEASE TABLETS
27 mg, 36 mg
and 54 mg
INDICATIONS AND USAGE
Methylphenidate Hydrochloride Extended-Release Tablets, USP (CII) are
indicated for the treatment of Attention Deficit Hyperactivity Disorder
(ADHD) in children 6 years of age and older, adolescents, and adults up
to the age of 65.
IMPORTANT RISK INFORMATION
extended-release tablets should be given cautiously to patients with a
history of drug dependence or alcoholism. Chronic abusive use can lead
to marked tolerance and psychological dependence with varying degrees of
abnormal behavior. Frank psychotic episodes can occur, especially
with parenteral abuse. Careful supervision is required during withdrawal
from abusive use since severe depression may occur. Withdrawal following
chronic therapeutic use may unmask symptoms of the underlying disorder
that may require follow-up.
Methylphenidate extended-release tablets are contraindicated in
with a known hypersensitivity to the product or its components
with marked anxiety, tension, or agitation
with tics or a family history or diagnosis of Tourette’s syndrome
using or within 2 weeks of using an MAO inhibitor
WARNINGS AND PRECAUTIONS
Use of stimulants may cause treatment-emergent psychotic or manic
symptoms in patients with no prior history, or exacerbation of
symptoms in patients with preexisting psychiatric illness. Clinical
evaluation for Bipolar Disorder is recommended prior to stimulant use.
Monitor for aggressive behavior.
Stimulants may lower the convulsive threshold. Discontinue in the
presence of seizures
Difficulties with accommodation and blurring of vision have been
reported with stimulant treatment.
May cause long-term suppression of growth: monitor height and weight
at appropriate intervals in pediatric patients.
May cause gastrointestinal obstruction with preexisting GI narrowing
Hematologic monitoring: Periodic CBC, differential, and platelet
counts are advised during prolonged therapy.
Serious adverse events including sudden death, stroke and myocardial
infarction have been reported in patients even at usual doses.
The most common adverse reaction (>5%) reported in children and
adolescents was upper abdominal pain. The most common adverse
reactions (>10%) reported in adults were dry mouth, nausea, decreased
appetite, headache, and insomnia. Monitor patients for changes in
heart rate and blood pressure and use with caution in patients for
whom an increase in blood pressure or heart rate would be problematic.
Gablofen (baclofen injection)
INDICATIONS AND USAGE
Gablofen (baclofen injection) is a gamma-aminobutyric acid (GABA)
ergic agonist indicated for use in the management of severe spasticity
of cerebral or spinal origin in adult and pediatric patients age 4
years and above.
Gablofen should be reserved for patients unresponsive to oral baclofen
therapy, or those who experience intolerable central nervous system
side effects at effective doses.
Patients should first respond to a screening dose of intrathecal
baclofen prior to consideration for long term infusion via an
Spasticity due to traumatic brain injury: wait at least one year after
injury before considering Gablofen therapy.
IMPORTANT RISK INFORMATION
WARNING: DO NOT DISCONTINUE
Abrupt discontinuation of intrathecal baclofen, regardless of the
cause, has resulted in sequelae that include high fever, altered mental
status, exaggerated rebound spasticity, and muscle rigidity, that in
rare cases has advanced to rhabdomyolysis, multiple organ-system failure
Prevention of abrupt discontinuation of intrathecal baclofen requires
careful attention to programming and monitoring of the infusion system,
refill scheduling and procedures, and pump alarms. Patients and
caregivers should be advised of the importance of keeping scheduled
refill visits and should be educated on the early symptoms of baclofen
withdrawal. Special attention should be given to patients at apparent
risk (e.g. spinal cord injuries at T-6 or above communication
difficulties, history of withdrawal symptoms from oral or intrathecal
baclofen). Consult the technical manual of the implantable infusion
system for additional post-implant clinician and patient information.
Hypersensitivity to baclofen.
Do not use Gablofen for intravenous, intramuscular, subcutaneous or
WARNINGS AND PRECAUTIONS
Risk of life-threatening overdose during pump refills. Use extreme
caution when filling the Medtronic SynchroMed® II Programmable pump
which is equipped with an injection port that allows direct access to
the intrathecal catheter. Direct injection into the catheter through
the catheter access port may cause a life-threatening overdose.
Use only with Medtronic SynchroMed® II Programmable Pump (or other
pumps labeled for intrathecal administration of Gablofen (baclofen
Resuscitative equipment and trained staff must be available during
screening dose, dose titration, and refills due to the potential
life-threatening CNS depression, cardiovascular collapse, and/or
Overdose may cause drowsiness, lightheadedness, dizziness, somnolence,
respiratory depression, seizures, rostral progression of hypotonia and
loss of consciousness progressing to coma.
Use with caution in patients with psychotic disorders, schizophrenia
or confusional state as it may exacerbate condition(s).
Fatalities have been reported with intrathecal baclofen use.
Caution should be used in patients with a history of autonomic
Presence of infection may increase the risk of surgical complication
and complicate dosing of Gablofen.
May cause drowsiness: use caution in operation of automobiles,
dangerous machinery and activity that made hazardous by decreased
alertness. Other CNS depressants and alcohol may add to this effect.
Potential development of intrathecal mass formation. Clinicians should
monitor for signs and symptoms of new neurologic symptoms including
the use of imagining diagnostic modalities.
Oral baclofen use has been associated with a dose related increase in
incidence of ovarian cysts.
Pregnancy Category C. The effect of baclofen in labor and delivery is
Baclofen is excreted into breast milk at oral therapeutic doses.
Pediatric use: Safety and effectiveness in pediatric patients below
the age of 4 years have not been established.
Sudden withdrawal of Gablofen can result in serious complications that
include high fever, confusion, muscle stiffness, multiple organ-system
failure, and death. Inform patients that early symptoms of Gablofen
withdrawal may include increased spasticity, itching, and tingling of
extremities. If Gablofen withdrawal or a pump malfunction is
suspected, patients should be brought immediately to a hospital for
assessment and treatment.
Gablofen overdose may occur suddenly or insidiously, and that symptoms
may include confusion, drowsiness, lightheadedness, dizziness, slow or
shallow breathing, seizures, loss of muscle tone, loss of
consciousness, and coma.
Other serious adverse events may include: potential development of
intrathecal mass formation, drainage, infection, meningitis,
unmanageable trunk control, CSF leakage, coma and death.
The most common adverse reactions in patients with spasticity of
spinal origin were hypotonia (25.3%) somnolence (20.9%), dizziness,
nausea/vomiting, hypotension, headache, and convulsions.
The most common adverse reactions in patients with spasticity of
cerebral origin were hypotonia (34.7%), somnolence (18.7%), headache
(10.7%) agitation, constipation, leukocytosis, chills, and urinary
Other common adverse events may include hypoventilation, hypertonia,
paresthesia, increased salivation, back pain, pruritus, diarrhea,
peripheral edema, asthenia, pain, confusion, speech disorder,
amblyopia, accidental injury and dry mouth.
CONCERTA is a registered trademark of ALZA Corporation
Covidien is a leading global healthcare products company that creates
innovative medical solutions for better patient outcomes and delivers
value through clinical leadership and excellence. Covidien manufactures,
distributes and services a diverse range of industry-leading product
lines in three segments: Medical Devices, Pharmaceuticals and Medical
Supplies. With 2012 revenue of $11.9 billion, Covidien has 43,000
employees worldwide in 70 countries, and its products are sold in over
140 countries. Please visit www.covidien.com
to learn more about our business.
Mallinckrodt, the Pharmaceuticals business of Covidien, is a vertically
integrated leader in providing products used in diagnostic procedures
and in the treatment of pain and related conditions. The company is a
leading supplier of opioid pain medications in the U.S., and a leading
manufacturer of active pharmaceutical ingredients. It is also a major
U.S. supplier of the medical isotope technetium-99m and an industry
leader in radiopharmaceuticals and contrast media and delivery systems.
Sales in 2012 were $2.0 billion. Please visit www.mallinckrodt.com
to learn more about our business.
Any statements contained in this communication that do not describe
historical facts may constitute forward-looking statements as that term
is defined in the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements include, but are not limited to, statements
about future financial condition and operating results, economic,
business, competitive and/or regulatory factors affecting our business
and the terms and the effect of the anticipated spin-off of the
Pharmaceuticals business from Covidien. Any forward-looking
statements contained herein are based on our management's current
beliefs and expectations, but are subject to a number of risks,
uncertainties and changes in circumstances, which may cause actual
results or company actions to differ materially from what is expressed
or implied by these statements. The factors that could cause actual
future results to differ materially from current expectations include,
but are not limited to, our ability to effectively introduce and market
new products or keep pace with advances in technology, the reimbursement
practices of a small number of large public and private insurers,
cost-containment efforts of customers, purchasing groups, third-party
payors and governmental organizations, intellectual property rights
disputes, complex and costly regulation, including healthcare fraud and
abuse regulations and the Foreign Corrupt Practices Act, manufacturing
or supply chain problems or disruptions, rising commodity costs, recalls
or safety alerts and negative publicity relating to Covidien or its
products, product liability losses and other litigation liability,
divestitures of some of our businesses or product lines, our ability to
execute strategic acquisitions of, investments in or alliances with
other companies and businesses, competition, risks associated with doing
business outside of the United States, foreign currency exchange rates,
environmental remediation costs and unanticipated developments that may
prevent, delay, alter the terms of or otherwise negatively affect the
planned spin-off. These and other factors are identified and described
in more detail in our Annual Report on Form 10-K for the fiscal year
ended September 28, 2012, and in subsequent filings with the SEC, as
well as Mallinckrodt’s registration statement on Form 10, which has not
yet been declared effective by the SEC. Further, there can be no
assurance as to the timing of the contemplated spin-off, or whether it
will be completed. We disclaim any obligation to update these
forward-looking statements other than as required by law.
1 Adjusted EBITDA represents earnings before interest, income
taxes, depreciation and amortization, adjusted to exclude certain items.
These items include, if applicable, discontinued operations; other
income, net; separation costs; restructuring charges, net; immediately
expensed up-front and milestone payments; acquisition related costs; and
non-cash impairment charges. We have provided this non-GAAP financial
measure because it is used by management, along with financial measures
in accordance with accounting principles generally accepted in the U.S.
(“GAAP”), to evaluate our operating performance. In addition, we believe
it will be used by certain investors to measure our operating results.
Management believes that presenting adjusted EBITDA to investors
provides useful information about our performance across reporting
periods on a consistent basis by excluding items that we do not believe
are indicative of our core operating performance.
2 On a full year basis; including corporate allocations in
fiscal Q1 to Q3 2013, and fiscal Q4 on a standalone basis.
Lynn Phillips, 314-654-3263
Manager, Media Relations
Senior Vice President, Communications
Vice President, Investor Relations