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Mallinckrodt: All strategic options on table

June 14, 2017

Mallinckrodt plc (NYSE: MNK) continues to look at a range of strategic options to deliver shareholder value, and all options including going private are on the table, said its CEO Mark Trudeau, according to a note from Wells Fargo. Wells Fargo hosted Mallinckrodt for a Q&A session on Friday.

Mallinckrodt also said its relationship with Express Scripts (NASDAQ: ESRX) is not strained.

“In explaining why Dr. Steve Miller, ESRX’s chief medical officer, may have said negative things about MNK’s ACTHAR in a conference call a week or two earlier, Mr. Trudeau was quick to say that he would not begin to speak for someone else, but in Mr. Trudeau’s experience, he has found medical officers of PBM’s generally do not like the price of many drugs. Trudeau added that MNK agrees with Dr. Miller’s comment that ACTHAR has limited application and it is a drug for those with few alternatives left and that is how MNK positions it with doctors and payors,” said analyst David Maris.

The analyst added, “MNK explained in detail its relationship with ESRX and despite some assertions by a short-seller recently that it is a “murky relationship” with ESRX driving demand it does not appear that way from the description MNK provided. To us, we can see how some investors might be easily confused by a complicated system but MNK’s description to us sounds exactly what other PBM/wholesalers do for other leading brands from Merck, Pfizer, and others.”

Wells Fargo has an Outperform rating on Mallinckrodt.

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