Mallinckrodt postpones split-up plan as opioid lawsuits cloud spinoffs future

Mallinckrodt thought it had a plan to rehabilitate its image, rid itself of low-performing products and banish at least some of its legal problems. But now its put that plan on hold. The Irish drugmaker said Tuesday it had postponed plans to spin off its specialty generics business as potential settlements in numerous opioid lawsuits against the company have created uncertainty about the to-be-independent units future cash flow. Mallinckrodts spinoff plan, announced in December, would create a new company under the Mallinckrodt name consisting of its specialty generics products, including oxycodone; active pharmaceutical ingredients; and the constipation drug Amitiza. What's left over—the company's specialty brands, including H.P. Acthar Gel—would operate under a new, as-yet-undetermined name and without the burden of potentially hefty opioid liabilities. The idea isn't dead, but now isn't the time, the company said Tuesday. “Mallinckrodt continues to actively consider a range of options intended to lead to the ultimate separation of the Specialty Generics business, consistent with its previously stated strategy,” the drugmaker said in a second-quarter earnings release Tuesday. Mallinckrodt is one a group of opioid makers that have been targeted in hundreds of lawsuits for their aggressive marketing as the nation’s addiction epidemic raged. In April 2018, the drugmaker was subpoenaed by a U.S. Attorney’s Office in Florida; it already faced civil investigative demands from officials in Missouri, Washington and Kentucky and subpoenas from New Hampshire, Kentucky and Alaska.