Certain of Mallinckrodt’s (MNK) key product segments are in disarray. Revenue from the Specialty Generics unit has been in free fall for several quarters. Specialty Generics houses the company’s opioid-related drugs such as Oxycodone and Hydrocodone. It currently makes up about 25% of Mallinckrodt’s revenue and I expect it to fall further.

The opioid crisis has dominated the national news cycle for several months. According to the Centers for Disease Control and Prevention opioid overdoses spiked 30% from July 2016 to September 2017. Some experts believe the crisis could have been caused by the proliferation of opioid prescriptions. Last year the FDA asked Endo Pharmaceuticals (ENDP) to remove the opioid Opana from the market due to its public health consequences of abuse. That said, Lawmakers’ attempts to tamp down opioid sales could sting Mallinkrodt further. The company previously put the unit on the block for sale but there were no takers.



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