Former hedge fund manager and controversial biotech CEO Martin Shkreli posted on Twitter that he’s long Canadian drug company Valeant Pharmaceuticals.
“I have taken a long position in [Valeant] and shorted [Allergan] as a hedge. Both companies have similar prospects and one is at half the price,” Shkreli Tweeted.
The stock fell $US28.13, or -19.17%, to end at $US118.61.
The share price had fallen as low as $US88.50 before rebounding.
Valeant said that they “categorically deny the allegations made in the Citron Report.”
Shkreli is the founder of Turing Pharmaceuticals, a biotech startup. He quickly became a household name last month after his company purchased the rights to a 62-year-old antiparasitic drug and then jacked up the price by more than 5,000%.
Turing recently bought the rights to Daraprim, which is used to treat toxoplasmosis, a disease caused by a common parasite that can be deadly, especially for those who are immunosuppressed. Almost immediately, Turing increased the price of Daraprim from $US13.50 per pill to $US750 per pill.
Valeant has also been criticised for its drug pricing. The company has also been compared to Shkreli.
In late September, Democrats on the House Oversight and Government Reform Committee sent a letter to the committee’s chairman, Jason Chaffetz (R-UT), asking him to subpoena Valeant for documents related to price increases of acquired drugs.
The letter said that Valeant “is using precisely the same business model as Martin Shkreli, the 32-year-old former hedge fund manager whose company recently purchased the life-saving drug Daraprim and increased the price from $US13.50 to $US750 per pill ‘overnight.'”
Here is the Tweet from Shkreli: