- 10 октября 2017, 23:50
- Zacks Investment Research
Mallinckrodt plc MNK announced that it will initiate a new phase IV study on H.P. Acthar Gel.
This multi-center, randomized, double blind, placebo-controlled study will further assess the efficacy of Acthar as a therapy option in patients with symptomatic sarcoidosis. The study will evaluate Acthar as a later-line treatment option for sarcoidosis patients with persistent disease.
The drug is already approved in the United States for this indication. The company is conducting the study to determine which class of patients will benefit the most from an alternative treatment like Acthar.
Acthar became part of the company’s portfolio following the Questcor acquisition and is currently approved for 19 indications. Mallinckrodt is working on boosting Acthar sales in the approved indications including rheumatology and pulmonology as well as underserved patient populations. The company intends to invest in research and development activities for developing Acthar for indications like lupus, proteinuria in nephrotic syndrome, amyotrophic lateral sclerosis and diabetic nephropathy.
Performance of the drug has been impressive so far, propelled by solid demand for rheumatology, pulmonology, ophthalmology and nephrology, and expanded access in more recently promoted indications such as lupus and sarcoidosis, as well as mature indications such as infantile spasms and nephrotic syndrome.
Mallinckrodt’s stock price has declined 28.0% year to date, compared with the industry’s fall of 20.7%.
We note that Mallinckrodt is currently focused on reshaping its product portfolio through strategic acquisitions and non-core asset divestitures to transform the portfolio and become a high-performing specialty pharmaceutical company. The company recently acquired privately-held InfaCare Pharmaceutical Corp. This specialty pharmaceutical company focuses on the development and commercialization of proprietary pharmaceuticals for neo-natal and pediatric patients.
The company’s generic segment continues to face weakness as various product categories are witnessing stiff competition, which is hurting both volumes and prices. The company expects double-digit declines in revenues from this segment. In addition, continued expected weakness in this segment will adversely impact gross profit margins also.
The company sold its Nuclear Imaging business due to persistent challenges. The company also sold its Intrathecal Therapy business to focus on key areas. While Acthar Gel sales continue to be strong on the back of increased formulary positions and access for appropriate patients in both the commercial and public environments, sales of Therakos are expected to decline.
Zacks Rank & Stocks to Consider
Mallinckrodt currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the health care sector are ACADIA Pharmaceuticals Inc. ACAD, Celgene Corp. CELG and Aduro Biotech, Inc. ADRO. All three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ACADIA’s loss per share estimates have narrowed from $2.82 to $2.57 for 2017 and from $2.07 to $1.90 for 2018 over the last 60 days. The company delivered positive earnings surprises in two of the trailing four quarters with an average beat of 7.97%.
Celgene’s earnings estimates for both 2017 and 2018 have inched up by 0.7% over the past 90 days. The stock has rallied 20.7% year to date, outperforming the industry.
Aduro Biotech’s loss per share estimates narrowed from $1.36 to $1.29 for 2017 over the last 30 days. The company delivered positive earnings surprises in two of the four trailing quarters with an average of 2.53%.
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