Mallinkcrodt Is Betting On Ocera Despite Doubts Around Its Liver Disease Drug

Mallinckrodt PLC MNK, a generic specialty pharmaceutical company, said Thursday it has agreed to acquire Ocera Therapeutics Inc OCRX, a nano-cap clinical-stage biopharmaceutical company for $1.52 per share plus a contingent value right.

Ocera's stock soared higher by 70 percent after the announcement and traded as high as $1.78 per share Thursday morning. Bu some investors are questioning the logic behind the acquisition as Ocerta's lead product, OCR-002, failed in a recent study.

Phase 2 Study Failed, But...

OCR-002 is an ammonia scavenger that's being studied for the treatment of hepatic encephalopathy, a neuropsychiatric syndrome associated with hyperammonemia, a complication of acute or chronic liver disease. In a phase 2b study earlier this year, the therapy showed a lack of statistical significance in hepatic encephalopathy.

However, the therapy did achieve a secondary endpoint in the study, which revealed differentiated clinical impact, including demonstrated effect on lowering serum ammonia levels, Mallinckrodt said in a press release.

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"Mallinckrodt believes that trial design elements, in part, drove the primary outcome and, on acquisition, will invest to establish the optimal dosing regimen prior to initiating a Phase 3 program," the company said. "Mallinckrodt will have continued engagement with the U.S. Food and Drug Administration (FDA) to confirm the regulatory pathway to gain FDA approval and subsequently launch the IV formulation, expected by 2022, and the oral formulation, expected by 2024."

"We believe OCR-002 has the potential to help thousands of patients whose hepatic encephalopathy is insufficiently treated by current therapies," said Linda S. Grais, M.D., President and Chief Executive Officer, Ocera. "We're excited by the additional development capability and commercial reach that can be gained by becoming part of Mallinckrodt. With this focus, I'm confident this important treatment can be successfully brought to market."

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Posted In: BiotechNewsHealth CareFDAM&AMoversTrading IdeasGeneralClinical StageLinda GraisLiver DiseaseOCR 002
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