Covidien eyes June 28 for pharma spinoff

Covidien CEO José Almeida

Covidien ($COV) is ready to pull the trigger on its long-planned pharmaceutical spinoff, planning to jettison its Mallinckrodt business June 28, and the company is amending its financials to prepare for a drug-free future.

The company is now expecting between 4% and 6% annual sales growth in its medical devices business, good for up to $3.9 billion in fiscal 2013 revenue, and 1% to 2% growth in its medical supplies business, setting the high end at about $1.6 billion.

As for Mallinckrodt, Covidien expects the drug business to grow 7% to 11% over 2012's $1.3 billion in net sales, reaching as much as $1.4 billion in revenue thanks to a high-end 25% leap in specialty pharmaceuticals that the company expects to negate a 3% to 7% decline in medical-imaging revenue.

"We have made very substantial progress since announcing our plan to spin off the pharmaceuticals business in December 2011," Covidien CEO José Almeida said in a statement. "Pharmaceuticals has strengthened its operations, enhanced its new products pipeline and established the infrastructure necessary to operate as a standalone company."

Over the past year, Mallinckrodt's double-digit growth rate has been propping up flattening sales for Covidien's device and supplies businesses, which grew a combined 3.8% last quarter to $2.5 billion in revenue.

But Covidien has a plan to accelerate its flagship businesses, aiming to increase R&D spending and trim down other operations. The company has invested heavily in drug-coated balloons and renal denervation, all while cutting hundreds of jobs at manufacturing plants in New York and South Carolina.

Mallinckrodt will trade on the New York Stock Exchange under the symbol "MNK," Covidien has said, and current pharmaceuticals president Mark Trudeau will serve as CEO.

- read Covidien's amended device projections
- here are Mallinckrodt's preliminary financials

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