Mallinckrodt invests $100M in its BioVectra CDMO

The Canadian operations plant where Mallinckrodt makes the API for its controversial—and pricey—H.P. Acthar Gel is expanding and getting some Canadian tax dollars to help with the expense.

Mallinckrodt has $144 million Canadian ($107 million U.S.) in projects underway to expand production at four BioVectra plants in Charlottetown, Prince Edward Island, and Windsor, Nova Scotia. The projects, which are expected to add about 150 workers to the 300 already employed, will get $37.5 million ($28 million U.S.) from the government of Justin Trudeau.

Dublin-based Mallinckrodt picked up CDMO BioVectra in 2014 with its $5.6 billion buyout of Questcor, maker of Acthar. The drug is approved for multiple inflammatory and autoimmune disorders but has been at the center of controversies over its price and effectiveness, both of which Mallinckrodt has vigorously defended. BioVectra makes the API for the drug.

Questor and Mallinckrodt have been sued by payers for allegedly blocking competition to Acthar at the same time that Questcor raised the price 85,000% over about six years. It now bears a list price of about $38,000 per vial, up from $32,000 when Mallinckrodt bought it.

Mallinckrodt believes the drug still has legs but claims growth now will come more from volume than from price hikes. The company is testing the drug in amyotrophic lateral sclerosis (ALS), which would be a new indication, and it has ongoing trials in six diseases it's already approved to treat, including lupus and multiple sclerosis. Acthar sales hit $283 million in the final quarter of 2018, down 4%, and $1.1 billion for the year, down 7%.

CEO Mark Trudeau told investors last month that "despite ongoing challenges in the payer environment affecting ... Acthar in particular," the company expects to again exceed $1 billion in net sales this year as data is released from new trials.

Acthar and the BioVectra facilities will be among the assets that a newly named brand will keep after Mallinckrodt spins off its Specialty Generics business, which will keep the Mallinckrodt name and its oxycodone-based drug operations that have also spawned problems for the company.

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