Shares of IntelliPharmaCeutics International, Inc. (NASDAQ:IPCI) Take a Big Leap After Signing New Licensing Deal With Mallinckrodt

IntelliPharmaCeutics International, Inc. (NASDAQ:IPCI) has reached a new deal, entering into a license and commercial supply agreement with Mallinckrodt to market, sell, and distribute IntelliPharmaCeutics’s extended release products in the United States.

Shares of IntelliPharmaCeutics International PLC (IPCI) rose on Tuesday after the company reported a new licensing deal with Mallinckrodt PLC (MNK). Specifically, the company entered into a license and commercial supply agreement with Mallinckrodt to market, sell and distribute IntelliPharmaCeutics’s extended release products in the United States.

The agreement is for the following drugs, each with varying levels of FDA approval:

    Quetiapine fumarate extended-release tablets (generic Seroquel XR) — abbreviated New Drug Application (ANDA) tentatively approved by FDA

    Desvenlafaxine extended-release tablets (generic Pristiq) — ANDA under FDA review

    Lamotrigine extended-release tablets (generic Lamictal XR) — ANDA under FDA review

Collectively, the present annualized sales by third parties for the currently marketed versions of these products in the United States are roughly $2.5 billion.

Under the terms of the 10-year agreement, IntelliPharmaCeutics will receive a non-refundable upfront payment of $3 million in October 2016. Additionally, the agreement also provides for the company to have a long-term profit sharing arrangement with respect to the licensed products.

IntelliPharmaCeutics has agreed to manufacture and supply the licensed products exclusively for Mallinckrodt, and Mallinckrodt has agreed that IntelliPharmaCeutics will be its sole supplier of the licensed products marketed in the United States.

Dr. Frank Scholz, Executive Vice President, Global Operations and President, Specialty Generics, Mallinckrodt, commented:

This agreement aligns well with our strategy of strengthening our Specialty Generics business and expanding our pipeline. If approved, these drugs will provide patients with alternative treatment options for central nervous system disorders. We look forward to working with Intellipharmaceutics to bring these products to market.

Shares of IntelliPharmaCeutics were up more than 9% to $3.09 on Wednesday, with a consensus analyst price target of $6.67 and a 52-week trading range of $1.41 to $3.33.

Mallinckrodt was last seen up fractionally at $68.34. The consensus price target is $93.86, and a 52-week range is $50.90 to $85.83.

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IntelliPharmaCeutics International, Inc. (NASDAQ:IPCI) shares are moving +5.30% on the news today and have traded in the range of $2.91 – 3.33 during the current trading session. A number of brokerage analysts have recently weighed in on the stock, providing price target projections. The covering firms currently have a consensus one-year price target of $6.67 on the stock.  This is according to brokerage analysts polled by Thomson Reuters First Call.  This is the average number from the individual targets provided by the firms.  Analysts are projecting earnings per share of $-0.04 for the next fiscal quarter.  For the current year, analysts are predicting earnings of $-0.28 per share according to First Call.

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In looking at where IntelliPharmaCeutics International, Inc. (NASDAQ:IPCI) is trading on a technical level, the stock is trading +48.87% away from its 50-day moving average of $2.00.  Based on the most recent available data, the equity is -10.51% off of its 52-week high of $3.33 and +111.35% away from its 52-week low which is $1.41.  In taking a look at the company’s valuation, potential investors should note that the company’s price to next year’s EPS estimates is $11.92.

Today, the stock opened at $3.18 and the last bid at the time of writing stood at $2.98.  During the session thus far, the equity dipped down to $2.91 and touched $3.33 as the high point.   IntelliPharmaCeutics International, Inc. (NASDAQ:IPCI) has a market cap of $85.67M and has seen an average daily volume of 324126 over the past three months.

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Disclaimer: The views, opinions, and information expressed in this article are those of the authors and do not necessarily reflect the official policy or position of any company stakeholders, financial professionals, or analysts. Examples of analysis performed within this article are only examples. They should not be utilized to make stock portfolio or financial decisions as they are based only on limited and open source information. Assumptions made within the analysis are not reflective of the position of any analysts or financial professionals.

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