This post was updated on May 17, 2016, at 5:40 p.m. EDT to incorporate a statement from Mallinckrodt.
If investors construed short-seller Andrew Left of Citron Research taking a long position in Valeant Pharmaceuticals (VRX) as a sign of support for the broader pharmaceutical industry, they couldn't have been more wrong. In fact, Left issued a challenge to one of his familiar targets: Mallinckrodt (MNK).
In an interview on CNBC's Halftime Report, Left flashed a $1 million check he would donate to charity if Mallinckrodt did a proper clinical study on its premiere drug, Acthar.
Left's distrust of the Dublin-based pharmaceutical company should come as no surprise to Real Money readers. In March he called it the "poster child" of price gouging despite getting less attention than Valeant. Acthar, which is used to treat seizures in infants, cost $1,650 a vial in 2007 and the price skyrocketed to $23,000 a vial in 2012, according to report in The New York Times.
"Mallinckrodt is squeaking by without anyone talking about it. Mallinckrodt makes Valeant look like a bunch of choirboys," Left told Real Money.
In Tuesday's interview with CNBC, Left briefly addressed his position on Valeant, clarifying statements he made in March about the company being uninvestable.
"Uninvestable and untradeable are two different things," Left said, adding that he protected his stock purchase with out-of-the-money puts and that he would need more information before holding the stock for the long term. (Real Money's James Passeri has been writing about Valeant's efforts to fix its problems, which include naming a new CEO and members to its board -- including Pershing Square's Bill Ackman -- as well as filing its overdue 10-K late last month.)
However, when it comes to Mallinckrodt, Left's charges against the company remain the same.
Mallinckrodt is "robbing from the health care system," Left told Real Money in an interview after his appearance on CNBC.
Mallinckrodt issued the following statement to CNBC after Left's appearance:
"Our growth plan is based on volume. Pricing is a consideration only where a product may be undervalued in the market or to maintain sustainability. Any modest price increases we do take is offset by contracting discounts offered to managed care. We're pleased to report we now have the majority of covered commercial lives under contract for Acthar, a product frequently prescribed as a third or fourth line treatment, used after other treatments have become ineffective or failed, and patients have few remaining options to help them manage what are often serious, devastating conditions.
"In 2010, the FDA modernized the Acthar label through a data-based review when the infantile spasms indication was approved along with retention of the 18 other indications currently on the label. Specific to Acthar research under Mallinckrodt, we are investing in company-sponsored controlled clinical trials for lupus and for a key nephrotic syndrome condition called FSGS ¿ with first patient announcement expected very soon. We also continue to evaluate opportunities to conduct Acthar phase four controlled clinical trials in other key disease areas. Simultaneously, we continue to generate additional data sets for Acthar, including pre-clinical and clinical data, patient registries and health economic assessments, as well as sponsoring investigator-initiated trials. In the first half of fiscal 2016, we had approximately 40 data presentations and publications, with about half related to Acthar."
Left pointed out to Real Money that his interpretation of Mallinckrodt's statement is that the company has no plans to lower prices.