Mallinckrodt (NYSE: MNK) Falls, Actavis (NYSE: ACT) Rises After FDA Drug Reclassification

November 14, 2014 7:50 PM

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Mallinckrodt (NYSE: MNK) Falls, Actavis (NYSE: ACT) Rises After FDA Drug Reclassification

In an unexpected move, the U.S. Food and Drug Administration has reclassified a generic ADHD drug produced by Mallinckrodt (NYSE: MNK). Over the course of the year, the FDA has tightened its standards for generic replicas of brand name drugs. In this particular case, the brand name is Concerta, produced by the Janssen Pharmaceuticals, a subsidiary of Johnson & Johnson (NYSE: JNJ). Approved in August 2000, Concerta treats ADHD and narcolepsy. In December 2012, Mallinckrodt released its generic copy to the public. This alternative version provided a cheaper option for patients compared to the brand name drug. And up until now, the FDA regarded it as “readily substitutable at the pharmacy level.”

However, less than two years later, the FDA no longer believes the drug is “therapeutically equivalent” to the brand name version. As a result, pharmacies around the nation may have to remove Mallinckrodt’s product from their shelves soon. But the Irish-based company does not plan to concede so easi...

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