UK-based pharmaceutical company Mallinckrodt has entered an agreement to acquire InfaCare Pharmaceutical and its developmental product, stannsoporfin, used for the treatment of newborns with the risk of developing severe jaundice.

Financial considerations and closing financial terms of the acquisition include an upfront payment of $80m, with additional payments of up to $345m based on regulatory and sales milestones.

InfaCare is a privately held company that focuses on the development and marketing of pharmaceuticals for neonatal and paediatric patients.

Currently under investigation, stannsoporfin is a heme oxygenase inhibitor with the potential to reduce the production of high levels of bilirubin, which can result in serious consequences in infants.

Also known as hyperbilirubinemia, jaundice is a common clinical condition that can be found in both term and pre-term newborns.

Developing severe jaundice in an infant entails the risk of bilirubin passing into the child’s brain. The syndrome, known as acute bilirubin encephalopathy, can result in a serious condition.

"We believe stannsoporfin has the potential to help thousands of infants whose severe jaundice is unresolved by current treatments."

Additionally, consistently high levels of bilirubin in the brain can lead to kernicterus, a rare condition that can cause severe and permanent brain damage.

Mallinckrodt chief scientific officer and executive vice-president Steven Romano said: “Severe hyperbilirubinemia can result in serious complications in infants, including brain damage and, rarely, death.”

InfaCare president and CEO Dan Burns added: “We believe stannsoporfin has the potential to help thousands of infants whose severe jaundice is unresolved by current treatments.

“We're also excited by the additional development capability and commercial reach that can be gained by becoming part of Mallinckrodt.”

InfaCare’s stannsoporfin has the capability to reduce the potential for developing severe jaundice through a new method of action current therapies that focus on removing excess bilirubin from a child’s system.

The new treatment might also have the potential to reduce the risks associated with other treatments, such as bilirubin rebound, and the risk of prolonged and / or severe bilirubin elevation, which can affect the development of the central nervous system.

In December last year, the US Food and Drug Administration (FDA) granted fast-track designation to stannsoporfin.