Morgan Stanley Updates Estimates for Mallinckrodt PLC

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In a report published Tuesday, Morgan Stanley analyst Christopher Caponetti reiterated an Equal-Weight rating on
Mallinckrodt PLCMNK
. In the report, Morgan Stanley noted, “Our new F3Q EPS est. of $0.89 is 7% above consensus' $0.83. Exalgo sales were more durable than we had projected in F3Q. Actavis' launch of the 8, 12, 16 mg formulations in May have yet to gain transaction (for the week ended 6/27, ACT had 7% TRx share on those strengths), and it did not secure FDA approval of the 32 mg as we had assumed (under the terms of the patent settlement ACT was permitted to launch on May 15, 2014 subject to FDA approval). We now model Exalgo sales flat YOY in F3Q at $34M (YOY TRx declines offset by a 23% list price increase), up $10M vs. our previous $24M estimate. Assuming a 75% margin (net of est. high teens royalty), incremental sales of $10M yield approx. $0.10 EPS upside.” Mallinckrodt PLC closed on Monday at $79.90.
Posted In: Analyst ColorReiterationAnalyst RatingsChristopher CaponettiMorgan Stanley
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