Drugmaker Mallinckrodt emerges from bankruptcy

(Reuters) -Drugmaker Mallinckrodt said on Tuesday it has emerged from bankruptcy and reduced its total funded debt by about $1.9 billion.

Mallinckrodt, which won court approval for its bankruptcy plan last month, said it is moving ahead with ample liquidity to execute its strategic priorities.

Pursuant to the bankruptcy plan, ownership of the company will now be handed over to its lenders and all its equity shares would cease to exist.

Mallinckrodt, which makes branded and generic drugs, first filed for bankruptcy in 2020 to address its high debt load, litigation over its allegedly deceptive marketing of highly addictive generic opioids and drug pricing disputes.

Despite the previous bankruptcy settlement that resolved those litigation threats and cut $1.5 billion in debt, the company quickly found itself in financial trouble again due to declining sales for its key branded drugs, including Acthar Gel.

Mallinckrodt said on Tuesday it will continue operating its Specialty Generics under the oversight of an independent monitor and operate in compliance with other existing Acthar-related settlement conditions.

(Reporting by Bhanvi Satija in Bengaluru; Editing by Shounak Dasgupta and Rashmi Aich)