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(Reuters) -Drugmaker Mallinckrodt (OTC:) said on Wednesday it expects to initiate bankruptcy proceedings in the coming days, the second filing in three years, in order to reduce the amount it owes to victims of the opioid crisis and cut its debt obligations.
The drugmaker’s shares, which have already lost about 92% of their value this year, fell 18.4% to 48 cents in early trading after the company said it had entered into a new restructuring agreement with its creditors and an opioid victims trust.
The company will make a one-time and final payment of $250 million to the trust in addition to $450 million it has paid, out of the $1.7 billion litigation settlement amount it was required to pay.
After emerging out of the first bankruptcy in 2022, it failed to make a $200 million payment to the opioid trust due in June, prompting the company to launch a negotiation with its stakeholders.
Now as part of the latest agreement, Mallinckrodt will reduce its total debt by about $1.9 billion.
The agreement and bankruptcy will “enable Mallinckrodt to better align our balance sheet with our current business plan,” said Siggi Olafsson, president and chief executive officer of Mallinckrodt.
The Ireland-based company, one of the largest manufacturers of opioids, also makes generic and branded drugs such as Acthar Gel, which is used to treat multiple sclerosis and infantile spasms.
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