Mallinckrodt Pharmaceuticals is making an equity investment in Mesoblast Ltd.
The parties entered a purchase agreement under which Mallinckrodt will purchase 20.04 million Mesoblast shares at A$1.4761 apiece representing nearly 5% of the company.
The companies are also negotiating a commercial and development partnership to advance two of Mesoblast's drug candidates in phase 3 clinical trial.
MPC-06-ID is being developed for the treatment of chronic back pain due to disc degeneration, while MSC-100-IV is being evaluated as a front-line therapy for children with a certain type of transplant complication.
Mallinckrodt has nine months to conclude negotiations for the rights to both candidates in all territories outside of China and Japan.
As of Dec. 22, US$1 was equivalent to A$1.38.