Mallinckrodt's Stock Gains After Plans To Buy Back More Shares, Reduce Debt

Mallinckrodt PLC's stock gained 3.5% in light premarket trade Thursday, after the drug maker announced a new stock repurchase program and plans to reduce its outstanding debt. The new $500 million share buyback program is in addition to the roughly $200 million remaining in the previous program, announced in January. Both the new share buyback and debt-reduction programs are based on an expected $1 billion in annual cash flow, the company said in a statement. "Mallinckrodt is pleased that the Board has acted to increase the company's flexibility and capacity to repurchase stock, and provided the opportunity to continue to de-lever our balance sheet and further reduce our net debt leverage, which at year-end was below our previous guidance of 4.0," said Chief Executive Mark Trudeau. The stock has tumbled 41% year to date, with most of the declines suffered over the past several months; the S&P 500 has gained 1.2% this year.