Why Mallinckrodt (MNK) Is Plummeting 19% In Pre-Hours Session Today?

Mallinckrodt plc (NYSE: MNK) plummeted -19.18% in premarket trading, reaching $1.98. The stock ended Friday with a -5.41% loss, closing at $2.45. MNK’s decision to pursue bankruptcy led to this decline.

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What Factors Contributed To Their Decision?

Mallinckrodt (MNK) faces a new challenge as some of its lenders suggest another bankruptcy filing. This proposal arises as the company approaches a crucial deadline to pay a $200 million settlement related to opioid victims. The payment, due by mid-June, is a crucial component of Mallinckrodt’s Chapter 11 exit plan.

Having sought bankruptcy protection nearly three years ago, the company embarked on a journey of reorganization. Last year, it successfully emerged from Chapter 11 after securing a nationwide settlement worth $1.7 billion. However, recent developments have thrust the company back into uncertainty.

In a filing with the U.S. securities regulator on Monday, Mallinckrodt disclosed that it received letters from various parties, including lenders, urging the consideration of alternative options. These letters reflect a growing concern among stakeholders, who are grappling with the complexities surrounding the company’s financial obligations and legal entanglements.

As Mallinckrodt navigates this precarious landscape, it must carefully assess the implications of these proposals. The drugmaker’s fate hangs in the balance as it weighs potential courses of action to address its financial liabilities and ensure its long-term viability.

MNK To Present Promising Results

Mallinckrodt (MNK) is unveiling today the outcomes of two clinical trials conducted on adults diagnosed with hepatorenal syndrome (HRS), characterized by a sudden decline in kidney function, who were treated with TERLIVAZ (terlipressin) for injection. The announcement will take place at the American Transplant Congress (ATC) 2023 in San Diego, California, spanning June 3-7. During the event, two significant studies will be presented orally: a pooled analysis of the Phase III terlipressin trials (REVERSE, CONFIRM) and a retrospective analysis of the Phase III CONFIRM trial. The presentation timings are scheduled for 4:30 p.m. and 4:40 p.m. PT, respectively. TERLIVAZ (terlipressin) for injection, an artificial vasopressin analogue, exhibits remarkable potential in enhancing kidney function among adult HRS patients with rapid reduction in renal activity.

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