In a Wednesday update to an earlier report, Probes Reporter dug into the potential impact of the ongoing multi-agency investigation of Mallinckrodt PLC MNK 7.95%’s Questcor Pharmaceuticals. The potential impact of the investigations is at the forefront of investors’ minds following the massive 51.4 percent sell-off in Valeant Pharmaceuticals Intl Inc VRX 7.41% on Tuesday. Valeant is currently under investigation by the SEC over drug pricing.
Mallinckrodt acquired Acthar, a drug used to treat seizures in babies, via a buyout of Questcor in 2014. Back in 2007, the price of Acthar jumped from $1,650/vial to $23,000/vial. Today a vial costs more than $30,000.
Looking At The Actual 10-Q
According to Mallinckrodt’s 10-Q filed in February of this year, the investigations have to do with Questcor’s “promotional practices and related matters.”
In the company’s own words, “The ultimate resolution, after taking into account amounts already accrued, could have a material adverse effect on [the company’s] financial condition, results of operations and cash flows.”
In a statement to Benzinga, a spokesperson for Mallinckrodt said, “These are historical matters, previously disclosed in our filings. Mallinckrodt continues to cooperate with the government investigations.”
What It Could Mean For Investors
According to Probes Reporter, if a company’s management says that there’s a material risk, investors should believe…
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