Mallinckrodt Public Limited Company (NYSE: MNK) shares rose in early Tuesday trading after the company reported upbeat Q3 earnings.
The U.K.-based company said Tuesday net sales were $640.0 million in the quarter as compared to $600.6 million, up 6.6%, or 6.7% on a constant-currency basis.
GAAP gross profit was $313.8 million with gross profit as a percentage of net sales of 49.0%, compared with 55.4%, primarily due to recent acquisitions. Adjusted gross profit was $530.4 million, compared with $502.4 million. Adjusted gross profit as a percentage of net sales was 82.9% versus 83.6%.
Research and development expenses were $78.5 million or 12.3% of net sales, as compared to $46.9 million or 7.8%, resulting from increased pipeline investment and in-line portfolio data generation.
Income tax benefit was $125.2 million, for an effective tax rate of 564.0%. The adjusted effective tax rate was 10.0%.
According to CEO Mark Trudeau, "Mallinckrodt performed well in the third quarter driven by strong customer demand for our hospital products and effective expense management. This tight expense control also helped us support increased R&D investments in our innovative pipeline. Based on this performance we are raising adjusted diluted earnings per share guidance for the fiscal year.”
"We continue to be pleased with the performance trajectory of H.P. Acthar® Gel and we also look forward to a number of important clinical data and regulatory updates across the portfolio in coming quarters. Finally, we continue to make strong progress against our objective of reducing debt."
Shares gained $1.42, or 5.2%, to $28.66
