Author Topic: MNK - Mallinckrodt  (Read 5463 times)



Stuart D

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Re: MNK - Mallinckrodt
« Reply #21 on: September 05, 2019, 11:30:47 PM »
https://seekingalpha.com/article/4289885-mallinckrodt-plcs-mnk-presents-wells-fargo-securities-2019-healthcare-conference-transcript?part=single

^Thanks for posting.

According to one of the comments following the article, MNK can buy back the Apr-2020 debt, however they need to pay 101%. I guess that explains why they are not buying it back ferociously at the moment...

Gregmal

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Re: MNK - Mallinckrodt
« Reply #22 on: September 06, 2019, 05:11:28 AM »
I donít see how MNK, TEVA and others involved in this can avoid bankruptcy. When you look at the verdict against  JNJ, which didnít  even have a meaningful market share, it is clear that the weakly capitalized companies which have orders of magnitude larger exposure are probably getting restructured :
https://finance.yahoo.com/news/johnson-johnson-apos-opioid-case-222826349.html

FWIW, I owned a good sized position in MCK but sold it recently because I canít handicap the exposure.

The key with the lawsuits is behavior. JNJ paid what they did because they actively, and most importantly deliberately lied to the public. Same with Purdue. I don't know MNK, TEVA, ENDP in regards to how egregious their market efforts where in relation to the others. Partially, I would think generics have less risk simply because they dont spend as much on marketing as the brands names. Every time Ive been to the doctor and gotten prescribed something, they always same the branded name but when you get to the pharmacy 80% of the time you get a generic. So where does the liability lay? As you said, its just too hard to handicap.

Also, the author of the Yahoo article talks up the risks with all these companies and then recommends investors buy Abbvie if they want to avoid the opioid wreckage!!! IMO AGN will go down as one of the worst acquisitions in recent memory, even if they see little harm despite being the #2 producer of pain pills in the world.

DeepSouth

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Re: MNK - Mallinckrodt
« Reply #23 on: September 06, 2019, 07:45:02 AM »
I donít see how MNK, TEVA and others involved in this can avoid bankruptcy. When you look at the verdict against  JNJ, which didnít  even have a meaningful market share, it is clear that the weakly capitalized companies which have orders of magnitude larger exposure are probably getting restructured :
https://finance.yahoo.com/news/johnson-johnson-apos-opioid-case-222826349.html

FWIW, I owned a good sized position in MCK but sold it recently because I canít handicap the exposure.

JNJ got slapped with a huge verdict because they have a huge balance sheet and AAA rating. You can't squeeze blood from a stone and if plaintiffs push companies into filing they're screwed because civil judgments are subordinated to opco guaranteed senior debt. That's also why the distis are in a tough spot with IG rated balance sheets and reasonably low leverage, plenty of room to hammer them. In other words, if looking for max $, plaintiffs should be looking to keep companies solvent and settle for long term payouts that are manageable. Munis/states could structure these payments into up front muni bonds if they want up front $. This is easiest for TEVA (although TEVA bonds are subordinate finco issued) and ENDP which have real businesses. MNK and Purdue are dying scams which is why they are far more likely to file.

Leverage Capabilities

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Re: MNK - Mallinckrodt
« Reply #24 on: September 08, 2019, 05:47:19 PM »
I donít see how MNK, TEVA and others involved in this can avoid bankruptcy. When you look at the verdict against  JNJ, which didnít  even have a meaningful market share, it is clear that the weakly capitalized companies which have orders of magnitude larger exposure are probably getting restructured :
https://finance.yahoo.com/news/johnson-johnson-apos-opioid-case-222826349.html

FWIW, I owned a good sized position in MCK but sold it recently because I canít handicap the exposure.

The key with the lawsuits is behavior. JNJ paid what they did because they actively, and most importantly deliberately lied to the public. Same with Purdue. I don't know MNK, TEVA, ENDP in regards to how egregious their market efforts where in relation to the others. Partially, I would think generics have less risk simply because they dont spend as much on marketing as the brands names. Every time Ive been to the doctor and gotten prescribed something, they always same the branded name but when you get to the pharmacy 80% of the time you get a generic. So where does the liability lay? As you said, its just too hard to handicap.

Also, the author of the Yahoo article talks up the risks with all these companies and then recommends investors buy Abbvie if they want to avoid the opioid wreckage!!! IMO AGN will go down as one of the worst acquisitions in recent memory, even if they see little harm despite being the #2 producer of pain pills in the world.


No view on the abbv/agn deal but AGN's opioid exposure is actually pretty low (relative to others). They sold the generics business to Teva and have an indemnification for any liabilities. The indemnification comes up in both the purchase agreement as well as an agreement related to a working capital adjustment dispute (in this one it specifically calls out the opioid liability. On the branded side, most of they are indemnified by Pfizer for most of it (although this is currently being disputed in NY courts) for everything before i think 2008 and AGN has said they really didn't do much marketing once they acquired the portfolio.

Stuart D

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Re: MNK - Mallinckrodt
« Reply #25 on: September 10, 2019, 11:54:14 PM »
MNK up 80% in 1 day on news of selling BioVectra business for $250m.

walkie518

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Re: MNK - Mallinckrodt
« Reply #26 on: September 11, 2019, 08:57:04 AM »
MNK up 80% in 1 day on news of selling BioVectra business for $250m.

after that sale, mcap will be less than cash? 

then what happens with the rest of the business?  super high short interest... might be worth taking a flier

Stuart D

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Re: MNK - Mallinckrodt
« Reply #27 on: September 11, 2019, 12:07:23 PM »
after that sale, mcap will be less than cash? 

Yeah, I think so. Also in the 6-months ended 28-June-2019 they generated > $300m in FCF. It's a dying business, but it still seems to have a lot of cash coming in the front door.

writser

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Re: MNK - Mallinckrodt
« Reply #28 on: September 11, 2019, 12:56:06 PM »
MNK up 80% in 1 day on news of selling BioVectra business for $250m.
after that sale, mcap will be less than cash? 

How relevant is that if you ignore $5.5b in debt?
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.

walkie518

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Re: MNK - Mallinckrodt
« Reply #29 on: September 11, 2019, 01:33:52 PM »
MNK up 80% in 1 day on news of selling BioVectra business for $250m.
after that sale, mcap will be less than cash? 

How relevant is that if you ignore $5.5b in debt?
the $250m isn't net proceeds?

the debt is substantial, but supported by EBITDA ... bankrtupcy only happens if the gov't forces?  it seems unamerican to force a company into bankruptcy rather than work out a deal that benefits all parties?