The Motley Fool: Mallinckrodt plc Takes a Big Swing for Growth

Facing declining market share in its core generic controlled substance (painkillers) market and holding the valuable asset of an Irish tax domicile, Mallinckrodt plc (NYSE: MNK  ) has aggressively put its balance sheet to work. First the company announced a $1.3 billion deal for Cadence Pharmaceuticals (NASDAQ: CADX  ) and its hospital-centered Ofirmev product (injected acetamenophen). Now the company is taking an even bigger swing – announcing a $5.6 billion deal for controversial Questcor (NASDAQ: QCOR  ) and its lead drug Acthar.

If Mallinckrodt can steer Questcor past the rocks that short sellers have been loudly claiming are in the company's path, this deal could double Mallinckrodt's earnings in relatively short order. If the short sellers are proven right about the many and varied problems of Questcor and Acthar, Mallinckrodt's shareholders will pay the price.

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Mallinckrodt plc Takes a Big Swing for Growth

Seeking Alpha: Controversial Questcor Still Looks Like A Buy

Questcor (QCOR) investors have had quite the ride over the past year. In addition to positive clinical data, the company has seen encouraging success in expanding its business in nephrology and rheumatology, but investors will not soon forget the nearly two-thirds dive that the stock took on word that Aetna (AET) was essentially dropping coverage on the company's only product.

There's no doubt that Questcor is a risky stock. All of the company's revenue comes from a single product that is off-patent (but very hard to manufacture) and the company has no pipeline to speak of. Even so, the shares appear undervalued with relatively little downside at present.

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Controversial Questcor Still Looks Like A Buy