Mallinckrodt (MNK) Commences Phase III Study Of StrataGraft

Mallinckrodt plc (NYSE:MNK) has enrolled the first patient in phase III study, assessing StrataGraft regenerative skin tissue for promoting autologous skin regeneration in patients with thermal burns.

The company’s share price decreased 19.7% year to date compared with the Zacks classified Medical – Generics Drugs industry’s decline of 6.7%.

The phase III study will include patients with 3-49% of complex skin defects on their total body surface area due to thermal burns with dermal elements intact. Excision and autografting are clinically indicated to treat the burns.

The company is working with the United States Biomedical Advanced Research and Development Authority (BARDA), supporting the StrataGraft development.

We remind investors that Mallinckrodt added StrataGraft to its portfolio through acquisition of Stratatech Corporation, a privately held regenerative medicine company, focused on developing unique, proprietary skin substitute products in August last year.

The FDA had granted an orphan product status to StrataGraft in 2012. Upon a potential approval, StrataGraft could be the first biological "off-the-shelf" skin substitute product for treatment of severe burns.

Every year, approximately 10,000 patients in the U.S. are hospitalized for the treatment of severe burns and the market for skin graft products used in this application is estimated to be approximately $300 million in the country.

Zacks Rank and Stocks to Consider

Mallinckrodt carries a Zacks Rank #3 (Hold). Some better ranked stocks in health care sector include VIVUS, Inc. (NASDAQ:VVUS) , MEI Pharma, Inc. (NASDAQ:MEIP) and Aeglea BioTherapeutics (NASDAQ:AGLE) . While VIVUS and MEI Pharma sport a Zacks Rank #1 (Strong Buy), Aeglea carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

VIVUS’ loss per share estimates narrowed from 502 cents to 39 cents for 2017 over the ast 60 days. The company posted positive earnings surprises in all four trailing quarters, with an average beat of 233.69%. The share price of the company increased 12.2% year to date.

MEI Pharma’s estimates reduced from loss per share of 1 cent to gain per share of the same for 2017, over the last 60 days. The company posted positive earnings surprises in three of the four trailing quarters, with average beat of 66.56%. The share price of the company increased 37.5% year to date.

Aeglea’s loss per share estimates narrowed from $3.64 to $2.48 for 2017 over last 60 days. The company posted positive earnings surprises in three of four trailing quarters, with average beat of 20.75%.

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