On November 7, 2023, Mallinckrodt PLC (MNKTQ, Financial), a global specialty pharmaceutical company, reported its financial results for the third quarter ended September 29, 2023. The company's net sales for the third quarter were $497.0 million, reflecting a 6.8% growth compared to the same period in the previous year.
Financial Performance
The company's Specialty Brands segment reported net sales of $286.2 million, a decrease of 5.7% on a reported basis and 6.0% on a constant currency basis. This decline is primarily due to the impact of competition, including the loss of exclusivity for Amitiza® in the U.S., and continued pressure on overall specialty pharmaceutical spending.
However, Mallinckrodt's Specialty Generics segment reported net sales of $210.8 million, reflecting an increase of 30.2% on a reported and constant currency basis. This increase is primarily due to growth in finished-dosage products as the broader market has experienced disruption in product quality and supply, coupled with the successful launch of lisdexamfetamine dimesylate capsules, used to treat attention-deficit/hyperactivity disorder (ADHD).
The company recorded a net loss for the third quarter of $1,724.8 million, primarily driven by the reorganization impacts of the Chapter 11 and liabilities management process and certain non-restructuring intangible asset impairments.
Adjusted EBITDA and Gross Profit
Mallinckrodt's Adjusted EBITDA in the third quarter was $180.6 million, an increase of 8.7% from $166.1 million in the third quarter of 2022. This increase is primarily due to strength in the Specialty Generics segment, growth in Therakos® and the launches of lisdexamfetamine dimesylate capsules and Terlivaz, partially offset by overall product mix.
Adjusted gross profit as a percentage of sales was 66.3% for the third quarter of 2023, as compared to 66.2% for the third quarter of 2022.
2023 Financial Guidance Update
For the full-year 2023, Mallinckrodt expects to be near the top end of the guidance ranges for both net sales and Adjusted EBITDA, even while assuming approximately $30 million of incremental bankruptcy-related compensation costs for key employee incentive and retention programs through emergence. The company is also narrowing the range of its 2023 net sales expectations for Acthar Gel and now expects the product to decline by approximately 15% for the fiscal year.
Company Outlook
Despite the challenges, Mallinckrodt remains focused on stabilizing the business and achieving year-over-year revenue growth. The company's financial restructuring plan was approved by the U.S. Bankruptcy Court in early October, and it expects to complete the Examinership in Ireland and formally emerge from the restructuring process in the near term as a stronger organization.
Explore the complete 8-K earnings release (here) from Mallinckrodt PLC for further details.
