Radiopharmacy vendor IBA Molecular has signed an agreement to acquire Mallinckrodt's nuclear imaging business in a deal valued at $690 million.
Mallinckrodt's business produces the radioisotope molybdenum-99, from which technetium-99m is derived. Technetium-99m is used in approximately 80% of all nuclear medicine procedures worldwide, and approximately two-thirds of revenues from Mallinckrodt's nuclear imaging business originate in the U.S.
Mallinckrodt has a long history in nuclear medicine, dating back some 50 years. But the business has been squeezed in recent years, caught between higher prices for molybdenum-99 and changing practice patterns in cardiac nuclear medicine. Mallinckrodt said it chose to divest the business to focus on its high-growth specialty pharmaceuticals unit.
Indeed, Mallinckrodt reported lackluster results for the nuclear imaging segment in its 2016 fiscal third quarter (end-June 24). For the quarter, the business recorded sales of $104 million, down 4.4% on a nominal basis and down 4.7% on a constant-currency basis from $108.8 million in the third quarter of 2015.
In 2015, Mallinckrodt sold its contrast media division to Guerbet, divesting products in x-ray, CT, and MRI.
There are some 800 Mallinckrodt employees in the U.S. and Europe who will move to IBA Molecular as part of the deal. Mallinckrodt has two manufacturing facilities focused on nuclear medicine products and sterile-fill pharmaceutical manufacturing, one in Maryland Heights, MO, and the other in Petten, the Netherlands.
The deal with IBA Molecular includes upfront and contingent considerations and the assumption of long-term obligations. Renaud Dehareng, CEO at IBA Molecular, said the acquisition will broaden the company's ability to serve patients globally.
The deal is subject to regulatory approval and is expected to close in the first half of 2017.
