Mallinckrodt shares tank 39% on report drug company mulls bankruptcy

The Mallinckrodt Pharmaceuticals sign at the company’s offices in St. Louis.

Whitney Curtis | AP

Shares of Mallinckrodt tanked 39% Thursday after Bloomberg reported the drugmaker is considering bankruptcy as it faces a slew of lawsuits related to its role in the nation’s opioid crisis.

Mallinckrodt already faces $5 billion in debt, according to Bloomberg. It may file for bankruptcy if it is unable to meet its legal liabilities. The company could face millions, possibly even billions, in costs related to the opioid crisis. It hired law firm Latham & Watkins and consulting firm AlixPartners to advise on any potential moves, Bloomberg reported Wednesday, citing unnamed sources.

Mallinckrodt CEO Mark Trudeau called the report “unfortunate” at a Wells Fargo investor conference on Thursday.

“While we can’t really comment specifically on any specific rumors, what we can say is like any company hires advisers for all different kinds of things all the time,” Trudeau said. “Unfortunately, people are putting a whole variety of things together and making assumptions of things completely independent of what we’re trying to do as a company.”

Shares of Mallinckrodt have lost 95% of their value over the past year, according to FactSet. They closed at $1.59 on Thursday. 

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