The divestment comes only months after the company sold its nuclear imaging business to IBA Molecular for $690 million. The sale of its generics business could bring in as much as $2 billion to the pharmaceutical company.
Mallinckrodt has hired investment back Credit Suisse Group to run the sales process, but there is no guarantee that any talk of a transaction will result in a deal.
The company’s generics unit saw sales decline 18% between 2015 and 2016, while sales of branded specialty drugs jumped nearly 40% to $2.3 billion during the same period.
“We expect continued pressure on the segment from competitive entrants and market pricing in coming quarters,” chief financial officer Matthew Harbaugh said of its generics unit during an earnings call.
The move towards branded drugs is a pivot from the company’s original intent – when Mallinckrodt was spun out of Covidien in 2013, generics and nuclear imaging products represented 90% of its revenue.
But over time, Mallinckrodt has invested in several acquisitions for its specialty pharmaceutical unit, including the $5.6 billion purchase of Questcor Pharmaceuticals in 2014. This deal bought the company its pricey anti-inflammatory drug, H.P. Acthar.
The $34,000 product now accounts for about 1/3 of Mallinckrodt’s revenue.
Material from Reuters was used in this report.