Radiopharmacies Now on Dealmakers’ Radar

You can’t get much more “specialty” in the specialty pharmacy business than to deal in radiopharmaceuticals. Two recent deals, announced in August, show this area is heating up.

IBA Molecular, a global maker and distributor of radiopharmaceutical products, agreed to pay approximately $613 million for Mallinckrodt‘s (NYSE: MNK) nuclear imaging business, including a portfolio of diagnostic imaging products. The U.S. market accounts for approximately two thirds of the division’s current annual revenues.

For Mallinckrodt, the sale continues its strategic portfolio transformation, as the company evolves to handle specialty pharmaceuticals that don’t glow. IBA Molecular gains a prominent global producer of the key medical isotope molybdenum-99, from which technetium-99m is derived. Tc-99 is used in nearly 80% of all nuclear medicine procedures worldwide.

Back in December 2009, Mallinckrodt’s then-owner, Covidien (NYSE: COV) sold the radiopharmacy business that was marketed under the Mallinckrodt brand. At the time, the 37 radiopharmacies generated revenue of $180 million. The buyer was privately held Triad Isotopes, Inc.,  which operated 26 nuclear pharmacies and six cyclotron facilities in the southeastern United States. The acquisition made Triad the second largest radiopharmacy network in the country. Financial terms were not disclosed.

The second recent radiopharmacy deal was a merger between Radiopharmacy Inc., with two radiopharmacies located in Illinois and Indiana, and PharmaLogic, a portfolio company of MedEquity Capital and Webster Capital. PharmaLogic operates 15 nuclear pharmacies in the northeastern and western United States, serving more than 200 hospitals and medical clinics. Radiopharmacy’s two sites are staffed with nuclear pharmacists and distribute a full range of compounded radioisotopes to hospitals and clinics, primarily for diagnostic imaging. Financial terms were not disclosed.



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