SVB Leerink cuts Mallinckrodt PT to $2 from $7

SVB Leerink reduced its price target for “market perform” rated Mallinckrodt (NYSE:MNK) to $2 from $7, reflecting a higher risk profile for the company. The stock closed at $1.59 on Sept. 5.

“While we believe that the company has enough cash to meet a $700-million [debt obligation due April 2020], it faces several near-term overhangs (lawsuits on Acthar and opioids) which could present significant cash flow challenges depending on the outcomes,” writes analyst Ami Fadia.

“We believe that the company should be able to fund a $600-million payment to CMS [should it lose the Acthar case], but the magnitude of a potential payout for the opioid litigation remains a wildcard,” all of which “raises the risk profile for the company,” she added.


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