Jefferies analyst Anthony Petrone downgraded Mallinckrodt to Hold from Buy and lowered his price target for the shares to $15 from $25. The company's risk profile "continues to heighten" given Medicare's reduced funding for Acthar, unknowns around opioid litigation, and its balance sheet health, Petrone tells investors in a research note. After three years of behind the scenes negotiations with the Centers for Medicare and Medicaid Services, the agency decided to roll back the base date average manufacturer price on Acthar from the rate established in 2012 and used since to 2013 to a base date prior to Mallinckrodt's acquisition of Questcor, Petrone points out. His understanding is that the shift will "substantially raise" the calculated rebate such that the net realized price on Acthar sales to Medicaid beneficiaries will fall from the current $30,000 per vial to "dollars" per vial. With Medicaid representing ~10% of Acthar sales, the analyst believes the shift, if put into effect, would impact Mallinckrodt's annual sales by ~$100M per year.