Mallinckrodt buys cancer cell therapy for $1.3bn


Four billion-dollar acquisitions in 18 months: Mallinckrodt is seriously interested in growth via M&A. Its most recent move – spending $1.3bn on Therakos – allows it into an area similar to the hugely hyped immuno-oncology sector, but from more of a medtech rather than biotech perspective.

Unlike the cell-based cancer therapy deals in the biotech space, which tend to revolve around therapies in mid-stage trials at best, Mallinckrodt has at least chosen a company whose technology is already approved. But, to make the purchase work, Mallinckrodt will have to grow the market for Therakos’s products by seeking additional approvals as well as using its sales power to reach more hospitals.

Therakos, a private company, specialises in a technique called extracorporeal photopheresis, whereby leukocytes are separated from a patient’s blood, mixed with a photosensitive compound that binds to their DNA, and exposed to ultraviolet-A light, programming them for self-destruction. They are then reinfused into the patient in a continuous process using Therakos’s Cellex system.

The system is approved in Europe and the US as a therapy for treatment-resistant cutaneous T-cell lymphoma as well as for graft-versus-host disease in Europe. Sales were $174m worldwide last year according to Leerink analysts, with  60% of this figure coming from the US.


Therakos is conducting trials aimed at gaining US approval for graft-versus-host disease, with data due in the next couple of years. The photopheresis system has shown promise in phase II as a therapy for patients who do not respond to or cannot tolerate first-line acute or chronic graft versus host disease therapies, Leerink analysts wrote.

Further approvals ought to spur uptake, but Mallinckrodt may have another way of growing sales. In the spring it bought Ikaria for $2.3bn and with it the inhalable nitric oxide system INOmax, used in hospital intensive care units to treat newborns suffering from respiratory failure (Mallinckrodt M&A strategy not yet flying too close to the sun, March 6, 2015).

Mallinckrodt believes that the hospital-focused INOmax sales team can offer Cellex and the consumables that go with it to their contacts at the same time; as a result the company believes, Therakos’s technology could bring in as much as $500m per year.

Since its spinout from Covidien two years ago, Mallinckrodt has been on a buying spree. 2014 saw it acquire Cadence Pharmaceuticals for $1.3bn, gaining an Irish tax domicile, and Questcor Pharmaceuticals for a huge $5.8bn.

The Questcor deal has not been all the company hoped, with sales of its biggest product, HP Acthar Gel, disappointing. Last week Mallinckrodt lowered sales expectations for it.

The purpose of Mallinckrodt’s split from Covidien was to spin off the pharma operations, leaving Covidien a pure-play medtech group and hence enabling its acquisition by Medtronic. Since then Mallinckrodt has been enthusiastically moving towards branded drugs, so the Therakos deal is perhaps slightly leftfield – a move back towards medtech. It is to be hoped that Cellex meets expectations better than Acthar did.

To contact the writer of this story email Elizabeth Cairns in London at or follow @LizEPVantage on Twitter

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