Mallinckrodt said Thursday that it had entered into an agreement to purchase Ocera Therapeutics Inc., a drug company focused on developing treatments for diseases related to the liver.
The Redwood City, Calif.-based company is currently developing a treatment for hepatic encephalopathy, or a loss of brain function when the liver fails to filter out toxins from the blood, according to the U.S. National Library of Medicine.
Mallinckrodt, which has its U.S. headquarters in St. Louis, agreed to purchase the company for $1.52 per share, or about $42 million, plus additional cash payments of up to $75 million.
Mallinckrodt said each year about 200,000 patients are treated for hepatic encephalopathy, with hospital stay for these patients ranging between five and seven days.
“The U.S. potential market opportunity is estimated at $5 billion to $7 billion,” the company said Thursday.
The company expects the deal to close during the fourth quarter of 2017.
Read more: St. Louis Post-Dispatch