Mallinckrodt to sell BioVectra

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A week after Mallinckrodt downplayed bankruptcy concerns amid opioid litigation uncertainties, the drugmaker announced that it is to sell BioVectra Inc to private equity firm H.I.G. Capital for up to US$250m.

The company’s shares rose around 13% to US$2.37 in trading after it said it intends to use proceeds from the sale to pay off debt. As of 28 June, Mallinckrodt had net debt of over US$5bn, and last week agreed to pay cash of US$24m to resolve certain opioid-related lawsuits.

According to media reports, the company last week hired restructuring firms, raising concerns that it may seek bankruptcy protection. The drugmaker dismissed the worries, saying it hires advisers “all the time.”

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