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Mallinckrodt sells nuclear imaging business to IBA Molecular for $690 million

by Lauren Dubinsky, Senior Reporter | August 25, 2016
Business Affairs
Mallinckrodt announced today that it is selling its nuclear imaging business to IBA Molecular (IBAM) for about $690 million.

“We believe this sale to IBAM is the best solution for both the business itself and for Mallinckrodt, given IBAM's significant industry experience, investment in growth and expansion, and the strategic fit of our Nuclear Imaging business within its organization,” Rhonda Sciarra, senior manager of communications at Mallinckrodt, told HCB News.

Mallinckrodt’s nuclear medicine business includes a portfolio of diagnostic imaging products, with one of its main products being molybdenum-99 (Mo-99). Technietium-99m (Tc-99m) is derived from Mo-99 and is used in about 80 percent of all nuclear medicine procedures around the world, according to the World Nuclear Association.

Even though many of its diagnostic imaging products are approved for use and sold for nuclear medicine procedures in many countries, about two-thirds of the business’s annual revenue currently comes from the U.S.

In a very challenging competitive market, the company’s nuclear imaging teams have made significant progress in driving cash and profitability. But Mallinckrodt has decided to sell the business because it wants to focus on expanding its high-growth specialty pharmaceuticals business.

“We have therefore assessed a number of strategic alternatives, and we believe this sale to IBAM is the best solution for both the business itself and for Mallinckrodt, given IBAM's significant industry experience, investment in growth and expansion, and the strategic fit of our Nuclear Imaging business within its organization,” said Sciarra.

In July 2015, Mallinckrodt sold its contrast business to Guerbet for $270 million.

Over 800 of Mallinckrodt’s employees are involved in the nuclear medicine business. The company has two manufacturing plants that generate nuclear medicine products and sterile-fill pharmaceuticals in Missouri and the Netherlands.

The employees and manufacturing plants are included in the deal with IBAM.

On September 30, 2016, Mallinckrodt will report the nuclear business as a “discontinued operation,” and within the first half of next year the transaction is expected to close.

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