Pharma BD Deal Intelligence

Mallinckrodt plc / InfaCare Pharmaceutical Corporation

2017 · Acquisition/Merger · $425M · Complete

A total loss: Mallinckrodt's $80M-upfront ($425M potential) buy of InfaCare's stannsoporfin for neonatal jaundice collapsed after an FDA advisory committee rejected it in 2018 and a Complete Response Letter followed, forcing a full $113.5M impairment with zero revenue ever generated.

CALLED IT — OFF BY 1

Total loss: stannsoporfin was rejected by FDA and fully written off within two years of closing, with zero product revenue ever generated

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The coverage arc

Aug 23, 2017 BioPharma Dive Neutral

Mallinckrodt agreed to acquire InfaCare and stannsoporfin to expand its hospital and specialty franchise; the heavily milestone-weighted $425M structure…

Aug 22, 2018 FierceBiotech Bearish

FDA issued a Complete Response Letter for stannsoporfin following a 21-3 advisory committee vote against approval, citing insufficient evidence of…

Aug 23, 2018 PharmaTimes Bearish

Stannsoporfin's FDA rejection following the unfavorable AdComm vote effectively closed the path to a near-term first-in-class neonatal jaundice drug, leaving…

Source summaries from our enrichment pipeline; follow links for originals.

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Mallinckrodt agreed to acquire InfaCare Pharmaceutical, gaining stannsoporfin, a Phase 3 heme oxygenase inhibitor in development for severe neonatal hyperbilirubinemia. Deal structure: $80M upfront plus up to $345M in development, regulatory and sales-based milestones (~$425M aggregate). The deal expanded Mallinckrodt's hospital/specialty franchise. Stannsoporfin later faced an FDA refuse-to-file letter.

Did it work? Outcome assessment

Total loss: stannsoporfin was rejected by FDA and fully written off within two years of closing, with zero product revenue ever generated

Strategic verdict
Failed to Achieve
Financial impact
Impaired/Written Down
Mallinckrodt paid ~$80M upfront with up to ~$345M in contingent milestones (most never triggered). Its FY2018 Form 10-K reflects fourth-quarter impairment charges for goodwill and an IPR&D asset following the stannsoporfin Complete Response Letter; the program-specific dollar amount within the $214.3M of FY2018 non-restructuring impairments was not independently confirmed this session.
Pipeline outcome
Assets Terminated
Sole asset stannsoporfin (heme oxygenase inhibitor for severe neonatal jaundice) was rejected 21-3 by an FDA joint advisory committee in May 2018 on risk-benefit grounds, received a Complete Response Letter on August 22, 2018, was never resubmitted, and its development status is recorded as discontinued.

Key facts

Disease & market context

Severe Neonatal Hyperbilirubinemia

Disease Overview

Severe neonatal hyperbilirubinemia is a sharp rise in bilirubin in newborns, especially in infants with hemolysis (e.g., ABO/Rh incompatibility, G6PD deficiency), that, untreated, can cross the blood-brain barrier and cause kernicterus, an irreversible neurologic injury. The standard of care is phototherapy, with exchange transfusion and IVIG reserved for severe cases. Universal pre-discharge bilirubin screening and intensive phototherapy have made kernicterus rare in high-income countries.

Competitive Landscape

At deal close (September 2017), severe neonatal hyperbilirubinemia management was almost entirely device- and procedure-based: intensive phototherapy (LED and fiberoptic blanket systems from GE Healthcare, Natus, Drager and others), exchange transfusion in extreme cases, and IVIG for hemolytic disease per AAP guidelines. There was no FDA-approved pharmacologic agent to prevent the rise of bilirubin. Stannsoporfin's heme oxygenase inhibition mechanism would have been the first drug to reduce bilirubin production at its enzymatic source, positioning Mallinckrodt to define a new pharmacologic category in the NICU/well-newborn-nursery setting. The clinical and commercial rationale was compromised by the FDA Joint Advisory Committee's 21-3 vote in May 2018 against approval, citing insufficient effectiveness evidence, followed by a Complete Response Letter in August 2018. The deal's heavily milestone-weighted structure (only $80M of the $425M paid upfront) limited Mallinckrodt's downside, but the program never reached commercialization. With universal screening already containing severe hyperbilirubinemia incidence, the addressable population was always narrow, and no comparable competing pharmacologic candidate has since advanced.

Related deals — scored

DealYearValueOutcome
Mallinckrodt plc / InfaCare Pharmaceutical Corporation (this deal)2017$425M12
Mallinckrodt plc / Cadence Pharmaceuticals, Inc.2014$1.4B50
Mallinckrodt plc / Therakos, Inc.2015$1.3B48
Mallinckrodt plc / Ikaria, Inc.2015$2.3B37
Mallinckrodt plc / Sucampo Pharmaceuticals, Inc.2017$1.2B19
Mallinckrodt plc / Questcor Pharmaceuticals, Inc.2014$5.6B18
Watson Pharmaceuticals (Actavis Inc.) / Actavis plc2012$5.9B97

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