Mallinckrodt adds pain drug with .3 billion Cadence deal

(Reuters) - Specialty pharmaceuticals company Mallinckrodt Plc said it would buy pain drug maker Cadence Pharmaceuticals Inc for about $1.3 billion to expand in the hospital market, where Cadence’s products are wide

ly used. The deal will add Cadence’s Ofirmev - an intravenous acetaminophen formulation for use in pain and fever - to Mallinckrodt’s portfolio of pain product

s. The drug, which was approved in November 2010, is expected to have generated sales of $110.5 million in 2013. Ofirmev, used in more than 2,350 U.S. hospitals, has been used to treat an estimated 6-7 million patients since its launch in January 2011, the two companies said in a statement. Mallinckrodt said on Tuesday it would pay $14 in cash per Cadence share, representing a pre

mium of about 27 percent to Cadence&rs

quo;s Monday close. Cadence shares were trading slightly above the offer price at $14.03 before the bell, while Mallinckrodt was up 8 percent. “Ofirmev’s growth is driven by an expanding base of physicians who are prescribing the product for an increasing number of surgical

patients,” Mallinckrodt CEO Mark Trudeau said in a statement. “The product will be an outstanding addition to the brands component of Mallinckrodt’s specialty pharmaceutical segment.” Dublin-based Mallinckrodt, spun off from Covidien Plc last July, makes drugs fo

r pain management, cerebral or spinal spasticity, inflammatory diseases and depression. It also makes generic drugs and active pharmaceutical ingredients. Mallinckrodt said it received debt financing com

mitments from affiliates of Deutsche Bank Securities. The commitments, along with cash on hand, are expected to fund the deal, it said. Mallinckrodt was advised by Deutsche Bank Securities and its legal advisers were Wachtell, Lipton, Rosen & Katz in the United States and Arthur Cox in Ireland. San Diego, California-based Cadence was advised by Lazard and Centerview Partners, and its legal advisor was Latham & Watkins LLP.