Mallinckrodty delivered a Q4 revenue and earnings beat, which caused the stock to spike 15%:

Mallinckrodt’s Q4 revenue fell 5% Y/Y. I was expecting another double-digit decline similar to last quarter’s but it didn’t happen. The company’s double-digit revenue growth from previous years and its reputation as a growth stock appear to be things of the past. Mallinckrodt has been selling assets to pare debt accumulated from its pharma roll-up strategy. It had been relying on revenue growth from Acthar (infantile spasms, multiple sclerosis) to serve as an anchor.

The company saw upticks in revenue for Ofirmev (up 8%) and Inomax (up 6%). Though revenue from Specialty Generics/Other was down 8% Y/Y, it paled in comparison to the 20% decline it experienced last quarter. However, Mallinckrodt’s former anchor continues to crack. Revenue from Acthar was off 9% Y/Y. That followed a 6% decline last quarter.

The fact that the revenue beat came on declining revenue and the continued demise of top-selling Acthar (infantile spasms) was concerning. The sales decline followed a 6% decline in the previous quarter marked by unfilled prescriptions. Now several of its patients have to requalify every time their Acthar prescription is extended.


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