Mallinckrodt plc

Mallinckrodt reported first-quarter 2023 total net sales of $425 million versus $491 million in the prior-year quarter, a 13% decrease on a constant currency basis. Specialty Brands net sales were $252 million, down 26%, and Specialty Generics net sales were $173 million, up 14%. The company reported a GAAP net loss of $249 million, diluted loss per share of $18.93, adjusted diluted EPS of $1.68, and adjusted EBITDA of $124 million versus $177 million last year. Adjusted gross profit was 59.9% of net sales, adjusted SG&A was 27.5%, and R&D was 6.7% of net sales. Management reaffirmed full-year 2023 net sales and adjusted EBITDA guidance, and said Acthar sales are now expected to decline 15% to 20% for the full year.

Siggi Olafsson said the company had a solid start to 2023 and emphasized three priorities: strengthening the balance sheet, stabilizing the portfolio, and investing in the pipeline. He highlighted improved cash on hand, Specialty Generics growth, and strong early momentum for Terlivaz, while also noting that INOmax Evolve remains on track for a late-year launch. On Acthar, he was candid about continued pressure from competition and affordability but said the company is working with prescribers and payers to improve access and believes the long-term outlook remains intact.

Bryan Reasons walked through the quarter’s results, noting $425 million in total net sales, a GAAP net loss of $249 million, adjusted diluted EPS of $1.68, and adjusted EBITDA of $124 million. He said the EBITDA decline versus last year reflected lower sales and launch investments in Terlivaz and StrataGraft, partially offset by lower SG&A and R&D from cost actions. He also cited liquidity of roughly $680 million, including $480 million in cash and cash equivalents and an undrawn receivables facility of up to $200 million, with total debt of $3.523 billion and net debt of $3.043 billion. He said the company entered into an interest rate cap agreement to reduce floating-rate exposure and expects SG&A to rise as launch support and long-term incentive compensation plans resume.

Analysts focused heavily on Acthar, asking whether the updated 15% to 20% sales decline guide was for the full year and what was driving weakness. Management said it is a full-year guide and pointed to seasonality, a salesforce restructuring that affected returning patients, competition added in 2022, and especially affordability and reimbursement hurdles. Siggi said naive patient volumes have stabilized and improved, returning patients began improving in April, and the company is working with payers to identify the patients most likely to benefit from Acthar. On the next-generation delivery device, management said there is “no stone left unturned” to get it to market as quickly as possible, but did not provide a timeline for partner changes.