Mallinckrodt acquires Ocera Therapeutics

With Ocera comes OCR-002, a proprietary therapy in development for treatment of hepatic encephalopathy

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STAINES-UPON-THAMES, U.K.—Global specialty pharmaceutical company Mallinckrodt plc on Dec. 11 announced it had closed the acquisition of Ocera Therapeutics, a clinical-stage biopharmaceutical company focused on the development and commercialization of novel therapeutics for orphan and other serious liver diseases with high unmet medical need. The acquisition deal between the two companies was first announced officially in early November. The total price tag to Mallinckrodt: $42 million.
If certain development and sales milestones are met, Mallinckrodt could end up paying as much as $75 million in addition, for a total potential price of $117 million.
Ocera’s developmental product OCR-002 is an ammonia scavenger that is being studied for treatment of hepatic encephalopathy, a neuropsychiatric syndrome associated with hyperammonemia, a complication of acute or chronic liver disease.
As Mallinckrodt noted when it first announced the deal in November, OCR-002 is a Phase 2 asset with both intravenous (IV) and oral formulations, adding that, “Despite inability to meet statistical significance in its primary endpoint, Ocera’s Phase 2 STOP-HE trial achieved secondary endpoints that revealed differentiated clinical impact, including demonstrated effect on lowering serum ammonia levels.”
Mallinckrodt believes that trial design elements, in part, drove the primary outcome. Now that it owns Ocera, it plans to invest to establish the optimal dosing regimen prior to initiating a Phase 3 program, and the company plans to have continued engagement with the U.S. Food and Drug Administration (FDA)—which has already granted Orphan Drug designation to OCR-002—to confirm the regulatory pathway to gain FDA approval and subsequently launch the IV formulation (expected by 2022) and the oral formulation (expected by 2024).
“The OCR-002 ammonia scavenger has the potential to provide tremendous benefit to patients suffering from this serious condition,” said Mark Trudeau, CEO and president of Mallinckrodt. “The addition of this highly durable, unique developmental asset to our portfolio further diversifies and expands our Specialty Brands pipeline.”
Roughly 30 to 35 million people in the United States have chronic liver disease. At times, this can develop further to become liver cirrhosis, wherein the liver becomes damaged and irreversibly scarred. Cirrhosis can be brought on by a wide range of underlying causes such as nonalcoholic steatohepatitis, or fatty liver disease; alcohol use; hepatitis; autoimmune diseases; diabetes; and obesity. Approximately 5.5 million patients in the U.S. have liver cirrhosis.
Given the liver’s job is to help remove toxins from the body, cirrhosis makes this job more difficult, and among the toxins that can accumulate is ammonia. Hepatic encephalopathy (HE) is a critical neuropsychiatric condition resulting from hyperammonemia (excess ammonia in the blood).While many patients who develop HE will have cirrhosis, incidents of HE are also reported in patients with other types of liver disease, such as acute liver failure or bypass shunts. HE can lead to personality changes, disorientation, stupor and, in severe cases, coma or death.
As a result of the completed merger, Ocera has become an indirect, wholly owned subsidiary of Mallinckrodt. Mallinckrodt expects dilution from the acquisition to adjusted diluted earnings per share of $0.25 to $0.35 annually beginning in 2018. Guidance on the impact of the acquisition to the company’s GAAP diluted earnings per share has not been provided due, the company says, “to the inherent difficulty of forecasting the timing or amount of items that would be included in calculating such impact.”
Mallinckrodt is a global business that develops, manufactures, markets and distributes specialty pharmaceutical products and therapies. Areas of focus include autoimmune and rare diseases in specialty areas like neurology, rheumatology, nephrology, pulmonology and ophthalmology; immunotherapy and neonatal respiratory critical care therapies; and analgesics and hemostasis products. The company's core strengths include the acquisition and management of highly regulated raw materials and specialized chemistry, formulation and manufacturing capabilities. The company's Specialty Brands segment includes branded medicines and its Specialty Generics segment includes specialty generic drugs, active pharmaceutical ingredients and external manufacturing.

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