Mallinckrodt Pharmaceuticals’ (MNK) stock fell as slow as 13% after the NYPost reported that the Federal Trade Commission (FTC) will file charges against the company for using its monopoly on a lupus drug to unfairly jack up its price.
Martin Shkreli (yes, you read that correctly, Martin Shkreli), who infamously engaged in the same pricing practice with an AIDS treatment through Turing, the drug company he once helmed, apparently blew the whistle.
He was indicted on securities fraud charges unrelated to Turing in December 2015.
MNK has gotten plenty of negative attention on Wall Street in the past. Last year, short seller Andrew Left of Citron Research — who has said the company is more offensive than pariah Valeant Pharmaceuticals — challenged the company to prove that one of its drugs, Acthar, actually works by appearing on TV and offering $1 million to the National Multiple Sclerosis Society if MNK provided test results.
MNK company purchased Questcor, the company that makes Acthar in 2014. Acthar is used to control muscle spasms in infants, and when MNK acquired the drug, it raised the price to $28,000 a vial, from $1,235 a vial in 2005 a vial.
“This legacy Questcor matter has been ongoing since Mallinckrodt acquired Questcor in 2014 and has been consistently disclosed in Mallinckrodt’s SEC filings,” the company said in a statement. “Mallinckrodt continues to cooperate fully with the FTC on this matter. We will provide updated information on any developments, if and when appropriate.”
The NYPost reports that the Obama Administration is likely to file suit against the company during its last days in power.