Mallinckrodt plc Reports Earnings for the First Quarter 2020 and Highlights Pipeline Progress

STAINES-UPON-THAMES, United Kingdom, May 5, 2020 /PRNewswire/ --

    --  First quarter net sales of $665.8 million, with diluted loss per share
        of $0.60, with results impacted in part by competitive and payer
        pressures in certain products and a decline in demand due to COVID-19
    --  Adjusted diluted earnings per share (EPS) of $1.64
    --  Operating cash flows of $53.7 million; cash on hand today in excess of
        $700 million after addressing the senior notes maturing in April 2020
    --  Key pipeline highlights include:
        --  U. S. Food and Drug Administration (FDA) acceptance of a New Drug
            Application (NDA) for terlipressin
        --  Initiation of rolling submission of Biologics License Application
            (BLA) for StrataGraft(®) regenerative tissue
        --  Collaborations with Novoteris, LLC and Massachusetts General
            Hospital to study inhaled nitric oxide in COVID-19 patients
    --  Company continues to work to resolve outstanding issues related to
        opioids and Acthar(®) Gel, and considers all available options to
        address legal and financial challenges

Mallinckrodt plc (NYSE: MNK), a global biopharmaceutical company, today reported results for the three months ended March 27, 2020. Unless otherwise noted, the quarter comparisons are to the prior year comparable three months ended March 29, 2019.

Net sales were $665.8 million in the quarter with diluted loss per share of $0.60 compared to diluted income per share of $1.83. Adjusted diluted EPS were $1.64 versus $1.94, a decrease of 15.5%, on lower net sales in first quarter 2020, partially offset by non-operational favorability from adjusted income tax expense and interest expense.

"As we navigate the unprecedented challenges created by the COVID-19 pandemic, we are committed to ensuring patients have uninterrupted access to our medicines," said Mark Trudeau, President and Chief Executive Officer of Mallinckrodt. "I am proud of Mallinckrodt's ability to continue manufacturing and supplying products during this critical time, and I thank our talented workforce for their ongoing commitment to the patients we serve. We also continued to execute on our strategic priorities and made important progress advancing our pipeline during the first quarter, moving closer toward the potential approval of key products - terlipressin and StrataGraft(®) regenerative tissue - later this year."

"Looking ahead, we expect the next few quarters will be challenging due to the impact of COVID-19, as some of our products are sensitive to reduced numbers of surgical procedures and doctor visits. We are adapting our operations to the current environment as we continue serving patients and customers. At the same time, we remain highly focused on addressing all legal and financial challenges impacting the business, and will continue to evaluate all available options to deal with these matters."


First Quarter 2020 Results
Gross profit was $283.8 million with gross profit as a percentage of net sales of 42.6%, compared with 42.4%. Adjusted gross profit was $480.5 million, compared with $566.3 million, with adjusted gross profit as a percentage of net sales of 72.2%, compared with 71.6%, due primarily to product mix.

Selling, general and administrative (SG&A) expenses were $231.1 million or 34.7% of net sales, as compared to $230.2 million, or 29.1%, primarily impacted by legal expenses and separation costs. Adjusted SG&A expenses were $187.2 million or 28.1% of net sales, compared with $211.4 million or 26.7%. Adjusted SG&A expense declined due to ongoing focused efforts on SG&A reductions.

Research and development expenses were $77.4 million, as compared to $85.3 million, due in part to the completion of two phase 3 clinical trials in late 2019. Research and development as a percentage of net sales was 11.6% versus 10.8%.

Interest expense was $74.5 million as compared to $82.7 million, a reduction of 9.9%, driven by deleveraging activities executed in 2019, including repurchase of debt at a discount and the execution of a fourth quarter debt exchange.

Income tax benefit was $18.9 million, for an effective tax rate of 25.0%. The adjusted effective tax rate was 2.0% in the first quarter. The adjusted effective tax rate has decreased from 2019 primarily due to the interest-bearing deferred tax obligations being fully satisfied in 2019.


Specialty Brands Segment
Net sales for the segment in the first quarter 2020 were $490.6 million.

    --  Acthar Gel net sales were $167.6 million, a 25.1% decrease, primarily
        driven by continued reimbursement challenges impacting new and returning
        patients; continued payer scrutiny on overall specialty pharmaceutical
        spending; and reduced patient demand due to COVID-19 stay-at-home
        orders. As the company navigates the ongoing CMS dispute, revenue from
        Acthar Gel Medicaid sales will be recognized, and any potential impact
        of a negative outcome in this matter is not reflected in the financial
    --  INOMAX(®) (nitric oxide) gas, for inhalation, net sales were $141.7
        million, down 6.2%, or 6.1% on a constant-currency basis, driven by
        increased competition for inhaled nitric oxide. Overall INOmax
        consumption remains high and is currently being driven, in part, by use
        in COVID-19 patients. The INOmax Total Care service offering remains a
        differentiating feature among competition.
    --  OFIRMEV(®) (acetaminophen) injection net sales were $74.9 million, a
        decrease of 21.7%, due to significant quarter-to-quarter order
        variability, and a reduction in elective surgeries due to public health
        orders and institutions focused on responding to the COVID-19 pandemic.
    --  Therakos(® )immunology platform net sales were $63.7 million, a modest
        increase of 3.1%, or 3.6% on a constant-currency basis, impacted as the
        quarter progressed by COVID-19, including stay-at-home directives
        impacting patients' abilities to receive treatment in hospitals or
        apheresis centers.
    --  AMITIZA net sales were $41.1 million, down 22.5% due to increased
        competition in the U.S. and the biennial price reduction in Japan.

Specialty Generics Segment
Net sales for the segment in the first quarter were $175.2 million, a decrease of 6.0%, primarily driven by a now-resolved, short-term disruption in the manufacturing of acetaminophen, which was unrelated to COVID-19.

Since the onset of the COVID-19 pandemic, the company has continued to manufacture, supply and deliver its products largely without interruption. At present, the company does not anticipate significant COVID-19-related manufacturing or supply chain disruptions, and it continues to evaluate its end-to-end supply chain and assess opportunities to refine its processes going forward. However, Mallinckrodt's business performance started to be impacted by reduced patient demand due to COVID-19 stay-at-home orders at the end of the first quarter, and the company expects this impact will be more significant in the second quarter at least. The ultimate business impact will largely be determined by the return to work guidance issued by international, national, and local governments, health officials and customers.

The company is supporting the fight against COVID-19 in a number of ways, including by partnering with Novoteris, LLC and Massachusetts General Hospital to study inhaled nitric oxide for use as a therapeutic option for COVID-19 patients; giving medically trained employees paid time off to volunteer to treat or care for COVID-19 patients; providing funding and therapies to hospitals to conduct treatment-related research; adapting certain of its manufacturing facilities to produce hand sanitizers for designated counties, state health departments and emergency operation distribution centers located in states where we have operations; donating excess personal protective equipment (PPE) and other resources to healthcare providers, first responders, and medical facilities; and partnering with patient advocacy groups to help mitigate the impact of the pandemic on patients.

On February 25, 2020 the company announced an agreement in principle for a global resolution to its opioid litigation, subject to certain conditions. Since that time, the company has been focused on addressing relevant matters to facilitate implementation of that resolution, including broadening plaintiff support and addressing the company's near-term debt maturities. On March 3, 2020 the U.S. Attorney's office in Massachusetts announced its intervention in a lawsuit filed against the company alleging violations of the False Claims Act relating to the method to calculate Medicaid drug rebates for Acthar Gel. As announced on March 16, 2020, the U.S. District Court for the District of Columbia ruled against Mallinckrodt in its lawsuit against the U.S. Department of Health and Human Services and Centers for Medicare and Medicaid Services (CMS) regarding the Company's calculation of Medicaid drug rebates for Acthar Gel. The company has sought reconsideration of the D.C. Court's ruling and a stay of the decision and continues to evaluate all options available to address these legal and financial matters.

Cash provided by operating activities in the first quarter was $53.7 million, with free cash flow of $33.8 million.

The cash balance at the end of the first quarter was $808.0 million, and the revolving credit facility was fully drawn. Total principal debt outstanding at the end of the first quarter was $5.418 billion, with net debt of $4.610 billion.

Following the quarter, the company successfully addressed the maturity of the 4.875% Senior Notes due April 2020 as a result of the completion of a $495.0 million private debt exchange and the remaining $119.8 million with cash on hand. As of today's earnings announcement, the current cash balance is in excess of $700 million.

Mallinckrodt will hold a conference call on Tuesday, May 5, 2020, beginning at 8:30 a.m. U.S. Eastern Time. This call can be accessed in three ways:

    --  At the Mallinckrodt website:
    --  By telephone: For both listen-only participants and those who wish to
        take part in the question-and-answer portion of the call, the telephone
        dial-in number in the U.S. is (877) 359-9508. For participants outside
        the U.S., the dial-in number is (224) 357-2393. Callers will need to
        provide the Conference ID of 1572379.
    --  Through an audio replay: A replay of the call will be available
        beginning at 11:30 a.m. Eastern Time on Tuesday, May 5, 2020, and ending
        at 11:59 p.m. Eastern Time on Tuesday, May 19, 2020. Dial-in numbers for
        U.S.-based participants are (855) 859-2056 or (800) 585-8367.
        Participants outside the U.S. should use the replay dial-in number of
        (404) 537-3406. All callers will be required to provide the Conference
        ID of 1572379.

Mallinckrodt is a global business consisting of multiple wholly owned subsidiaries that develop, manufacture, market and distribute specialty pharmaceutical products and therapies. The company's Specialty Brands reportable segment's areas of focus include autoimmune and rare diseases in specialty areas like neurology, rheumatology, nephrology, pulmonology and ophthalmology; immunotherapy and neonatal respiratory critical care therapies; analgesics and gastrointestinal products. Its Specialty Generics reportable segment includes specialty generic drugs and active pharmaceutical ingredients. To learn more about Mallinckrodt, visit

Mallinckrodt uses its website as a channel of distribution of important company information, such as press releases, investor presentations and other financial information. It also uses its website to expedite public access to time-critical information regarding the company in advance of or in lieu of distributing a press release or a filing with the U.S. Securities and Exchange Commission (SEC) disclosing the same information. Therefore, investors should look to the Investor Relations page of the website for important and time-critical information. Visitors to the website can also register to receive automatic e-mail and other notifications alerting them when new information is made available on the Investor Relations page of the website.

This press release contains financial measures, including adjusted net income, adjusted diluted earnings per share, adjusted gross profit, adjusted SG&A, net sales growth on a constant-currency basis, adjusted effective tax rate, net debt and free cash flow, which are considered "non-GAAP" financial measures under applicable SEC rules and regulations.

Adjusted net income, adjusted gross profit and adjusted SG&A represent amounts prepared in accordance with accounting principles generally accepted in the U.S. (GAAP) and adjusted for certain items that management believes are not reflective of the operational performance of the business. The adjustments for these items are on a pre-tax basis for adjusted gross profit and adjusted SG&A and on an after-tax basis for adjusted net income. Adjustments to GAAP amounts include, as applicable to each measure, amortization; restructuring and related charges, net; inventory step-up expense; discontinued operations; changes in fair value of contingent consideration obligations; significant legal and environmental charges; losses on divestiture; unrealized gain on equity investment; gains on debt extinguishment, net; separation costs; tax effects of aforementioned adjustments, changes in uncertain tax positions, tax impacts from legislative changes and tax impacts from certain transactions, such as acquisitions or reorganizations; and other items identified by the company. Adjusted diluted earnings per share represent adjusted net income divided by the number of diluted shares.

The adjusted effective tax rate is calculated as the income tax effects on continuing and discontinued operations plus the income tax impact included in Mallinckrodt's reconciliation of net loss, divided by loss from continuing and income from discontinued operations plus the pre-tax, non-income, tax-related adjustments included in its reconciliation of adjusted net income (excluding dilutive share impact). The income tax adjustment included in the reconciliation of adjusted net income primarily represents the tax impact of adjustments between net loss and adjusted net income, changes in uncertain tax positions, tax impacts of legislative changes and tax impacts from certain transactions, such as acquisitions or reorganizations.

Net sales growth on a constant-currency basis measures the change in net sales between current- and prior-year periods using a constant currency, the exchange rate in effect during the applicable prior-year period.

Free cash flow for the first quarter represents net cash provided by operating activities of $53.7 million less capital expenditures of $19.9 million, each as prepared in accordance with GAAP.

Net debt as of March 27, 2020 represents the total principal debt outstanding of $5.418 billion less cash of $808.0 million, each as prepared in accordance with GAAP.

The company has provided these adjusted financial measures because they are used by management, along with financial measures in accordance with GAAP, to evaluate the company's operating performance. In addition, the company believes that they will be used by certain investors to measure Mallinckrodt's operating results. Management believes that presenting these adjusted measures provides useful information about the company's performance across reporting periods on a consistent basis by excluding items that the company does not believe are indicative of its core operating performance.

These adjusted measures should be considered supplemental to and not a substitute for financial information prepared in accordance with GAAP. The company's definition of these adjusted measures may differ from similarly titled measures used by others.

Because adjusted financial measures exclude the effect of items that will increase or decrease the company's reported results of operations, management strongly encourages investors to review the company's consolidated financial statements and publicly filed reports in their entirety. A reconciliation of certain of these historical adjusted financial measures to the most directly comparable GAAP financial measures is included in the tables accompanying this release.

Further information regarding non-GAAP financial measures can be found on the Investor Relations page of the company's website.

Statements in this document that are not strictly historical, including statements regarding future financial condition and operating results, legal, economic, business, competitive and/or regulatory factors affecting Mallinckrodt's businesses, and any other statements regarding events or developments the company believes or anticipates will or may occur in the future, may be "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, and involve a number of risks and uncertainties.

There are a number of important factors that could cause actual events to differ materially from those suggested or indicated by such forward-looking statements and you should not place undue reliance on any such forward-looking statements. These factors include risks and uncertainties related to, among other things: governmental investigations and inquiries, regulatory actions and lawsuits brought against Mallinckrodt by government agencies and private parties with respect to its historical commercialization of opioids, including the non-binding agreement in principle regarding terms and conditions of a global settlement to resolve all current and future opioid-related claims; scrutiny from governments, legislative bodies and enforcement agencies related to sales, marketing and pricing practices; pricing pressure on certain of Mallinckrodt's products due to legal changes or changes in insurers' reimbursement practices resulting from recent increased public scrutiny of healthcare and pharmaceutical costs; the reimbursement practices of governmental health administration authorities, private health coverage insurers and other third-party payers; complex reporting and payment obligations under the Medicare and Medicaid rebate programs and other governmental purchasing and rebate programs; cost containment efforts of customers, purchasing groups, third-party payers and governmental organizations; changes in or failure to comply with relevant laws and regulations; Mallinckrodt's and its partners' ability to successfully develop or commercialize new products or expand commercial opportunities; Mallinckrodt's ability to navigate price fluctuations; competition; Mallinckrodt's and its partners' ability to protect intellectual property rights; limited clinical trial data for Acthar Gel; clinical studies and related regulatory processes; product liability losses and other litigation liability; material health, safety and environmental liabilities; potential indemnification liabilities to Covidien pursuant to the separation and distribution agreement; business development activities; retention of key personnel; the effectiveness of information technology infrastructure including cybersecurity and data leakage risks; customer concentration; Mallinckrodt's reliance on certain individual products that are material to its financial performance; Mallinckrodt's ability to receive procurement and production quotas granted by the U.S. Drug Enforcement Administration; complex manufacturing processes; conducting business internationally; Mallinckrodt's ability to achieve expected benefits from restructuring activities; Mallinckrodt's significant levels of intangible assets and related impairment testing; labor and employment laws and regulations; natural disasters or other catastrophic events; Mallinckrodt's substantial indebtedness and its ability to generate sufficient cash to reduce its indebtedness; future changes to U.S. and foreign tax laws or the impact of disputes with governmental tax authorities; the impact of Irish laws; and the impact of the outbreak of the COVID-19 coronavirus.

These and other factors are identified and described in more detail in the "Risk Factors" section of Mallinckrodt's Annual Report on Form 10-K for the fiscal year ended December 27, 2019 and the "Risk Factors" section of Mallinckrodt's Quarterly Report on Form 10-Q for the quarterly period ended March 27, 2020, which the company expects to file later today. The forward-looking statements made herein speak only as of the date hereof and Mallinckrodt does not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise, except as required by law.


Investor Relations
Daniel J. Speciale, CPA
Vice President, Investor Relations and IRO

Michael Freitag / Aaron Palash / Aura Reinhard
Joele Frank, Wilkinson Brimmer Katcher
(212) 355-4449

Mallinckrodt, the "M" brand mark and the Mallinckrodt Pharmaceuticals logo are trademarks of a Mallinckrodt company. Other brands are trademarks of a Mallinckrodt company or their respective owners. © 2020 05/20.

              MALLINCKRODT PLC


              (unaudited, in millions, except per share data)

              Three Months Ended

                                                    March 27,       Percent of                                       March 29,  Percent of
                                                         2020             Net sales                                        2019        Net sales


     Net sales                                                    $
            665.8                                        100.0                                      $
        790.6   100.0
                                                                                                                             %                                                      %

     Cost of sales                                     382.0                              57.4                                                      455.5                   57.6

     Gross profit                                      283.8                              42.6                                                      335.1                   42.4

      Selling, general and
       expenses                                         231.1                              34.7                                                      230.2                   29.1

      Research and
       development expenses                              77.4                              11.6                                                       85.3                   10.8

      Restructuring charges,
       net                                              (1.8)                            (0.3)                                                       4.2                    0.5

      Losses on divestiture                               0.2

       litigation settlement                           (16.8)                            (2.5)

      Operating (loss)
       income                                           (6.3)                            (0.9)                                                      15.4                    1.9

      Interest expense                                 (74.5)                           (11.2)                                                    (82.7)                (10.5)

      Interest income                                     3.5                               0.5                                                        1.5                    0.2

      Other income, net                                   1.7                               0.3                                                       16.3                    2.1

      Loss from continuing
       operations before
       income taxes                                    (75.6)                           (11.4)                                                    (49.5)                 (6.3)

      Income tax benefit                               (18.9)                            (2.8)                                                   (204.7)                 (25.9)

      (Loss) income from
       continuing operations                           (56.7)                            (8.5)                                                     155.2                   19.6

      Income (loss) from
       operations, net of
       income taxes                                       6.5                               1.0                                                      (0.3)

      Net (loss) income                                           $
            (50.2)                                       (7.5)                                     $
        154.9    19.6
                                                                                                                             %                                                      %

                 Basic (loss) earnings per share:

      (Loss) income from
       continuing operations                                      $
            (0.67)                                                                         $

      Income (loss) from
       operations                                        0.08

      Net (loss) income                                           $
            (0.60)                                                                         $

                 Diluted (loss) earnings per share:

      (Loss) income from
       continuing operations                                      $
            (0.67)                                                                         $

      Income (loss) from
       operations                                        0.08

      Net (loss) income                                           $
            (0.60)                                                                         $

                 Weighted-average number of shares

      Basic weighted-
       average shares
       outstanding                                       84.2                                                                              83.5

      Diluted weighted-
       average shares
       outstanding                                       84.2                                                                              84.6

                MALLINCKRODT PLC

                NON-GAAP MEASURES

           (unaudited, in millions except per share data)

       Three Months Ended

              March 27, 2020                                                                                                 
         March 29, 2019

                                        Gross     SG&A                 Net                   Diluted                                   Gross                       SG&A                       Net                          Diluted
                                 profit                    (loss)                                net (loss)                   profit                                                 income                            net
                                                         income                  income                                                                                                                            income
                                                                                                                                                                                                                 per share
                                                                                        per share (1)


     GAAP                                    $
     283.8                                     $
              231.1                                           $
              (50.2)                                                             $
        (0.60)                               $
       335.1               $
       230.2   $
       154.9   $


      Intangible asset
       amortization                     196.7                         (0.9)                            197.6                                                         2.34                                                       221.2                   (1.6)              222.8                     2.63

      Restructuring and related
       charges, net                         -                                                         (1.8)                                                      (0.02)                                                                                                  4.2                     0.05

      Inventory step-up expense             -                                                                                                                                                                                 10.0                                       10.0                     0.12

      Income (loss) from
       discontinued operations              -                                                         (6.5)                                                      (0.08)                                                                                                  0.3

      Change in contingent
       consideration fair value             -                          0.8                             (0.8)                                                      (0.01)                                                                             (5.5)                5.5                     0.07

      Significant legal and
       environmental charges (2)            -                       (22.5)                              5.7                                                         0.07

     Divestitures                          -                                                           0.2

     Separation costs                      -                       (21.3)                             21.3                                                         0.25                                                                             (11.7)               11.7                     0.14

      Gains on debt
       extinguishment, net                  -                                                                                                                                                                                                                          (9.0)                  (0.11)

      Unrealized gain on equity
       investment                           -                                                         (5.4)                                                      (0.06)

      Legal entity and
       intercompany financing
       reorganization                       -                                                                                                                                                                                                                        (192.8)                  (2.28)

     Income taxes (3)                      -                                                        (21.8)                                                      (0.26)                                                                                               (43.2)                  (0.51)

     As adjusted                             $
     480.5                                     $
              187.2                                            $
              138.3                                                                $
        1.64                                $
       566.3               $
       211.4   $
       164.4   $

      Percent of net sales               72.2                          28.1                              20.8                                                                                          71.6                                     26.7            20.8
                                            %                            %                                %                                                                                            %                                       %              %

                (1)              In periods where
                                               the Company
                                               reports a net
                                               loss from
                                               ordinary shares
                                               outstanding are
                                               excluded from
                                               the calculation
                                               of diluted
                                               earnings per
                                               share, prepared
                                               in accordance
                                               with GAAP, as
                                               they would be
                                               dilutive shares
                                               are included in
                                               the calculation
                                               of adjusted
                                               diluted earnings
                                               per share when
                                               dilutive. As a
                                               result, the
                                               adjusted diluted
                                               earnings per
                                               share utilized a
                                               weighted average
                                               share count of
                                               84.3 shares for
                                               the three months
                                               ended March 27,

                (2)              Includes $22.5
                                               million in
                                               opioid defense
                                               costs which are
                                               considered to be
                                               as a result of
                                               the Litigation
                                               announced during
                                               the three months
                                               ended March 27,
                                               2020; therefore,
                                               such costs are
                                               included as an
                                               adjustment to
                                               net income on a
                                               basis until
                                               effectuation of
                                               the Litigation
                                               These costs were
                                               partially offset
                                               by a $16.8
                                               million decrease
                                               in the fair
                                               value of the

                (3)              Includes tax
                                               effects of above
                                               stated), changes
                                               in uncertain tax
                                               positions, tax
                                               impacts of
                                               changes and
                                               The three months
                                               ended March 29,
                                               2019 also
                                               includes certain
                                               installment sale

                MALLINCKRODT PLC


                (unaudited, in millions)

                            Three Months Ended

               March 27,                       March 29,                               Percent                                  Currency                Constant-
                    2020                             2019                                      change                    impact                currency


     Specialty           $
       490.6                                                                    $
              604.2                                     (18.8) (0.1)
      Brands                                                                                                                                                    %                    %
                                                                                                                                                                      %         (18.7)

      Generics     175.2                                    186.4                                                                    (6.0)                                (6.0)

     Net sales           $
       665.8                                                                    $
              790.6                                     (15.8) (0.1)
                                                                                                                                                                %                    %
                                                                                                                                                                      %         (15.7)

                MALLINCKRODT PLC


                (unaudited, in millions)

                                             Three Months Ended

                               March 27,                        March 29,                                     Percent                                  Currency                Constant-
                                    2020                              2019                                            change                    impact                currency


     Specialty Brands

     Acthar Gel                         $
        167.6                                                                          $
              223.9                                     (25.1)                   %    (25.1)
                                                                                                                                                                                       %                             %

     INOmax                       141.7                                     151.1                                                                          (6.2)                          (0.1)         (6.1)

     Ofirmev                       74.9                                      95.6                                                                         (21.7)                                       (21.7)

     Therakos                      63.7                                      61.8                                                                            3.1                           (0.5)           3.6

     Amitiza                       41.1                                      53.0                                                                         (22.5)                                       (22.5)

     Other (1)                      1.6                                      18.8                                                                         (91.5)                                       (91.5)

      Specialty Brands Total             $
        490.6                                                                          $
              604.2                                     (18.8)        (0.1)
                                                                                                                                                                                       %                             %
                                                                                                                                                                                                    %           (18.7)

     Specialty Generics

      Hydrocodone (API) and
       hydrocodone-containing                                                                                                                                                          %                             %
       tablets                            $
        26.5                                                                           $
              17.4                                       52.3                    %      52.3

      Oxycodone (API) and
       tablets(2)                   16.9                                      16.5                                                                            2.4                                           2.4

      Acetaminophen (API)(2)        44.1                                      46.2                                                                          (4.5)                                        (4.5)

      Other controlled
       substances(2)                83.6                                      94.2                                                                         (11.3)                                       (11.3)

     Other(2)                       4.1                                      12.1                                                                         (66.1)                                       (66.1)

      Specialty Generics Total           $
        175.2                                                                          $
              186.4                                      (6.0)                   %     (6.0)

                                                                                                                                                                                       %                             %

                (1)              The three months ended March 29,
                                               2019 includes $12.4 million of
                                               net sales related to BioVectra
                                               prior to the completion of the
                                               sale of this business in
                                               November 2019.

                (2)              Prior period amounts have been
                                               reclassified to conform to
                                               current period presentation.

               MALLINCKRODT PLC


             (unaudited, in millions)

                                                                  March 27,                                   December 27,
                                                                       2020                            2019



     Current Assets:

      Cash and cash equivalents                                                  $
              808.0                            $

      Accounts receivable, net                                        527.2                             577.5

     Inventories                                                     327.1                             312.1

      Prepaid expenses and other
       current assets                                                 211.0                             150.2

      Total current assets                                          1,873.3                           1,830.7

      Property, plant and
       equipment, net                                                 878.2                             896.5

      Intangible assets, net                                        6,820.4                           7,018.0

     Other assets                                                    599.4                             593.7

                   Total Assets                                               $
              10,171.3                         $

                   Liabilities and Shareholders' Equity

     Current Liabilities:

      Current maturities of long-
       term debt                                                                 $
              634.2                            $

     Accounts payable                                                110.2                             139.8

      Accrued payroll and
       payroll-related costs                                           63.0                             105.2

     Accrued interest                                                 82.3                              62.9

      Accrued and other current
       liabilities                                                    394.4                             485.4

      Total current liabilities                                     1,284.1                           1,426.9

     Long-term debt                                                4,739.1                           4,741.2

      Opioid-related litigation
       settlement liability                                         1,626.6                           1,643.4

      Pension and postretirement
       benefits                                                        61.5                              62.4

      Environmental liabilities                                        60.6                              60.0

      Other income tax
       liabilities                                                    291.3                             227.1

      Other liabilities                                               212.3                             237.2

                   Total Liabilities                                8,275.5                           8,398.2

     Shareholders' Equity:

     Preferred shares                                                    -

     Ordinary shares                                                  18.7                              18.7

      Ordinary shares held in
       treasury at cost                                           (1,615.7)                        (1,615.7)

      Additional paid-in capital                                    5,569.1                           5,562.5

     Retained deficit                                            (2,067.1)                        (2,016.9)

      Accumulated other
       comprehensive loss                                             (9.2)                            (7.9)

                   Total Shareholders' Equity                       1,895.8                           1,940.7

                   Total Liabilities and
                    Shareholders' Equity                                      $
              10,171.3                         $

                MALLINCKRODT PLC


                (unaudited, in millions)

                                                                                    Three Months Ended

                                                              March 27,                                       March 29,
                                                                   2020                                             2019


                   Cash Flows From Operating Activities:

      Net (loss) income                                                   $
              (50.2)                                      $

      Adjustments to reconcile net cash
       from operating activities:

      Depreciation and
       amortization                                               223.1                                                     247.6

       compensation                                                 6.7                                                      10.0

      Deferred income taxes                                         5.5                                                   (243.2)

      Losses on divestitures                                        0.2

      Other non-cash items                                       (19.6)                                                      2.6

      Changes in assets and liabilities:

      Accounts receivable,
       net                                                         49.4                                                      48.7

     Inventories                                                (18.4)                                                    (0.7)

      Accounts payable                                           (22.9)                                                    (7.1)

      Income taxes                                               (34.9)                                                     19.8

     Other                                                      (85.2)                                                   (68.1)

      Net cash from
       operating activities                                        53.7                                                     164.5

                   Cash Flows From Investing Activities:

      Capital expenditures                                       (19.9)                                                   (39.8)

      Proceeds from
       divestiture, net of
       cash                                                       (3.5)

     Other                                                         6.7                                                       0.4

      Net cash from
       investing activities                                      (16.7)                                                   (39.4)

                   Cash Flows From Financing Activities:

      Issuance of external
       debt                                                           -                                                    200.0

      Repayment of external
       debt                                                       (4.9)                                                  (448.7)

      Debt financing costs                                        (4.0)

      Proceeds from exercise
       of share options                                               -                                                      0.3

      Repurchase of shares                                            -                                                    (0.5)

     Other                                                           -                                                      0.5

      Net cash from
       financing activities                                       (8.9)                                                  (248.4)

      Effect of currency
       rate changes on cash                                       (1.5)                                                      0.3

                   Net change in cash,
                    cash equivalents and
                    restricted cash                                26.6                                                   (123.0)

                   Cash, cash equivalents
                    and restricted cash
                    at beginning of
                    period                                        822.6                                                     367.5

                   Cash, cash equivalents
                    and restricted cash
                    at end of period                                       $
              849.2                                       $

      Cash and cash
       equivalents at end of
       period                                                              $
              808.0                                       $

      Restricted cash
       included in other
       assets at end of
       period                                                      41.2                                                      18.7

                   Cash, cash equivalents
                    and restricted cash
                    at end of period                                       $
              849.2                                       $

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