Drugmaker Mallinckrodt files for second bankruptcy in the US

Drugmaker Mallinckrodt said the company and some of its units have filed for a second bankruptcy in three years in the US, with the newest restructuring plan set to reduce its debt by about $1.9 billion.

The Ireland-based company initiated Chapter 11 proceedings after reaching a debt reduction deal that would cut $1 billion from the amount it owes to victims of the opioid crisis.

The company is one of the largest manufacturers of opioids. It also makes generic and branded drugs such as Acthar Gel, which is used to treat multiple sclerosis and infantile spasms.

Mallinckrodt, which had also filed for bankruptcy in 2020, was a defendant in more than 3,000 lawsuits alleging that it used deceptive and misleading marketing tactics to boost its sales of highly addictive opioid drugs.

After court approval, the company will have excess of $450 million of liquidity comprising cash, commitments received for $250 million in new financing from certain of its creditors, it said in a statement.

Mallinckrodt has listed both estimated assets and liabilities in the range of $1 billion to $10 billion, the drugmaker said in a court filing with the US Bankruptcy Court for the District of Delaware.

The company expects to complete the court-supervised process in the fourth quarter of 2023 with support of its key stakeholders. -Reuters