Paladin Pharma SpA

Two drugmakers looking to recover from financial and legal challenges related to the US opioid epidemic are considering a merger that could be worth up to $7 billion, per a report from Bloomberg on Wednesday. Mallinckrodt and Endo — which both settled opioid lawsuits with several US states, and have each declared bankruptcy — are mulling a deal that would give the firms' investors about 50% ownership of a combined entity, which would be listed on the New York Stock Exchange, according to Bloomberg, who cited people with knowledge of the matter. The merger could be inked as early as this week, though the sources cautioned there's no guarantee the deal will go through.Recent divestments Within the past year, both companies have sold off sections of their businesses in efforts to stay afloat. Last August, Mallinckrodt sold its immunotherapy business Therakos to CVC Capital Partners Fund IX for $925 million, with proceeds intended to pay off its debt. And earlier this week, Endo agreed to offload its international pharmaceuticals business, Paladin Pharma, to Knight Therapeutics for $84 million, with the potential for an additional $15 million tied to future milestones.

The deal bulks up Knight's pan-American pharma business, the company said in a release. Montreal-based Knight Therapeutics has galloped in with CAD $120 million ($84 million) to pick up Endo’s Paladin Pharma unit in a move that stands to significantly expand its Canadian business.The deal is expected to close in the middle of this year after clearing regulatory hurdles in Canada, according to a March 11 press release. Not only does it “significantly increase” the size of Knight’s Canadian business, but the buyout adds a clutch of “stable cash flow generating” medicines to help fund the company’s growth across Canada and Latin America, Knight CEO Samira Sakhia added the release.Knight said it will pay CAD $120 million ($84 million) in an upfront payment. In addition, it could be on the hook to pay up to $15 million in future contingent payments based on the Paladin business reaching "certain sales milestones."Since its founding in 2014, Knight has invested hundreds of millions of dollars to build out its pan-American platform, the company said last year. Its team of Knights is made up of about 700 employees stationed across Canada and 10 countries in Latin America.Paladin, meanwhile, garnered revenues of CAD $70 million in 2024, according to Knight. The number doesn't include products that the company is in the process of discontinuing or has already stopped selling. Endo first picked up 29-year-old generic and specialty drugmaker Paladin in a 2013 deal worth $1.6 billion. Knight Therapeutics itself formed as part of the Endo-Paladin transaction, a 2013 press release shows."This divestiture is an important step forward in our strategic transformation and focus on investing in our core-growth assets," Endo's interim CEO Scott Hirsch said in a statement. "We are confident that Paladin is well positioned for continued success in the Canadian market and that Knight Therapeutics is the right partner for Paladin's next chapter."

Endo is selling its international pharmaceuticals business to Knight Therapeutics, a Montreal-based specialty pharma company. Endo will get $84 million upfront and could make another $15 million if certain milestones are met, according to Tuesday’s press release . Endo’s international business operated primarily through a subsidiary called Paladin Pharma, which sells specialty products in Canada. “This divestiture is an important step forward in our strategic transformation and focus on investing in our core-growth assets,” Endo interim CEO Scott Hirsch said in a statement. Endo filed for Chapter 11 bankruptcy in 2022 and reached a $465 million settlement last March. The company was facing criminal and civil claims over its marketing and promotion of opioids. Endo pled guilty to a single misdemeanor and admitted no wrongdoing in the civil settlement. The deal is expected to close in mid-2025.