Mallinckrodt said today it was planning to file for Chapter 11 bankruptcy protection, for a second time in three years as it struggles to pay victims of the opioid crisis.
The news sent the shares of the US drugmaker down 22% in premarket trading on Wall Street.
It also said today that in connection with the contemplated Chapter 11 filing, it intends to make certain filings to start examinership proceedings in Ireland.
It said these are required to implement certain Irish law aspects of the financial restructuring plan and allow for emergence.
The company had recently signed a restructuring agreement for a one-time payment of $250m to an opioids victims trust, in addition to $450m it had previously paid.
It had emerged from bankruptcy last year after winning court approval for a reorganisation plan that included a $1.7 billion settlement.
It had previously failed to make a $200m payment to the trust due in June.
As part of its latest agreement with lenders and the trust, Mallinckrodt will reduce its total debt by about $1.9 billion.
The Ireland-based company is one of the largest manufacturers of opioids.
It also makes generic and branded drugs such as Acthar Gel, which is used to treat multiple sclerosis and infantile spasms.
"After several months of constructive discussions, we are pleased to have reached this agreement with our key stakeholders, which will enable Mallinckrodt to better align our balance sheet with our current business plan," Siggi Olafsson, President and chief executive of Mallinckrodt said.
"While we have made important progress over the past year, the steps we are taking now will strengthen our ability to navigate the challenges that have affected our business," the CEO said.
"As we move forward, we remain focused on advancing our business priorities and operational initiatives, including seeking growth opportunities across our portfolio and executing on our recent and planned product launches. Delivering therapies that improve outcomes for patients with severe and critical conditions remains at the centre of all that we do," he added.
