Mallinckrodt Reports $27.7 Million Net Loss, Sees Improvement in Gross Profit

Mallinckrodt plc reported a net loss of $27.7 million for the three months ended March 28, 2025, a significant improvement compared to a net loss of $65.4 million in the same period last year. The company's net sales decreased by 10.2% to $419.9 million, down from $467.8 million in the prior year. This decline was primarily attributed to the divestiture of the Therakos business and competitive pressures affecting key products such as INOmax and acetaminophen (APAP). Despite the overall decrease in sales, gross profit increased by 23.7% to $202.9 million, driven by a reduction in inventory step-up expenses and lower intangible asset amortization costs.

In terms of operational performance, Mallinckrodt's Specialty Brands segment saw a 19.4% decrease in net sales to $207.3 million, largely due to the absence of Therakos sales and a decline in INOmax sales. However, Acthar Gel sales increased by 12.3% to $115.4 million, reflecting positive market reception and the successful launch of the SelfJect device. Conversely, the Specialty Generics segment experienced a slight increase in sales of 1.0%, reaching $212.6 million, primarily due to growth in finished-dosage generics, which offset declines in APAP sales.

Strategically, Mallinckrodt is pursuing a business combination with Endo, which was formalized in a transaction agreement on March 13, 2025. This agreement includes provisions for shareholder approval and the potential for significant changes in the company's structure and operations. The company has incurred $20.5 million in expenses related to this transaction, which includes legal and advisory costs. Additionally, the company completed the divestiture of its Therakos business in November 2024 for $887.6 million, which has allowed for debt reduction and improved liquidity.

Operationally, Mallinckrodt reported a cash inflow from operating activities of $66.3 million for the quarter, a notable increase from $15.8 million in the previous year. This improvement was driven by a combination of reduced inventory levels and increased accounts payable. The company ended the quarter with cash and cash equivalents of $422.2 million, up from $382.6 million at the end of the previous fiscal year. Looking ahead, Mallinckrodt anticipates that its ongoing strategic initiatives, including the proposed business combination and continued focus on product development, will enhance its market position and financial performance.