An investor in NYSE:MNK shares filed a lawsuit over alleged Securities Laws violations by Mallinckrodt PLC (NYSE:MNK) in connection with certain allegedly false and misleading statements.
Investors who purchased shares of Mallinckrodt PLC (NYSE:MNK) have certain options and for certain investors are short and strict deadlines running. Deadline: March 27, 2017. NYSE:MNK investors should contact the Shareholders Foundation at firstname.lastname@example.org or call +1(858) 779 – 1554.
On August 14, 2014, Mallinckrodt PLC acquired Questcor Pharmaceuticals, Inc. in a $5.6 billion transaction. As a result of the acquisition, Mallinckrodt added HP Acthar Gel (“Acthar”), an injectable medication made from pigs’ pituitary glands, to its drug portfolio. Acthar is the only approved therapeutic preparation of adrenocorticotropic hormone (“ACTH”) in the U.S., and is approved by the U.S. Food and Drug Administration (“FDA”) as a treatment for 19 different conditions, including infantile spasms, and difficult-to-treat autoimmune and inflammatory conditions.
The plaintiff alleges that given the monopoly status of Acthar in the U.S. market, Questcor, and later Mallinckrodt PLC, repeatedly increased the price of Acthar 85,000% from $40 per vial in 2001 to over $34,000 per vial in 2017.
The plaintiff claims that between November 25, 2014 and January 18, 2017, Mallinckrodt and its Chief Executive Officer (“CEO”), Mark Trudeau (“Trudeau”), made a series of allegedly false and misleading statements and failed to disclose material adverse facts about the long-term sustainability of the Company’s monopolistic Acthar revenues and the exposure of Acthar to reimbursement rates by Medicare and Medicaid.
Specifically, the plaintiff alleges that the Defendants made false and/or misleading statements and/or failed to disclose that Acthar’s monopoly status as the only FDA-approved ACTH preparation was the product of unlawful anticompetitive practices and failed to disclose that its increasing reliance on Medicare and Medicaid meant that the Company’s monopolistic Acthar revenue would be threatened if the government took action to limit the price paid for this drug by taxpayers.
On November 9, 2015, Citron Research described Mallinckrodt’s abuse of the pharmaceutical reimbursement system, and stated that Mallinckrodt has “significantly more downside” than rival Valeant Pharmaceuticals International, Inc. and is “a far worse offender” of the reimbursement system.
On November 16, 2016, Citron Research issued a report titled “Mallinckrodt CEO FRAUD exposed by the new Medicare Drug Dashboard”. In this article, Citron stated that Mallinckrodt CEO has committed Fraud by lying to the shareholders about the Company’s dependence on the Medicare system. Per Citron, Mallinckrodt drug Acthar, which is medically unproven, is now the most expensive drug reimbursed by Medicare. Citron has placed a price target of $20 on Mallinckrodt stock.
During a conference call with investors on November 29, 2016, Trudeau stated that “Acthar now represents a significantly greater proportion of our operating income than one-third.”
The plaintiff says that the truth about Mallinckrodt PLC’s anticompetitive and unlawful efforts to prevent an alternative ACTH treatment from reaching the U.S. market was fully revealed on January 18, 2017, when the FTC announced that Mallinckrodt had agreed to pay $100 million in connection with a joint settlement with the FTC and several states.
Shares of Mallinckrodt PLC declined from $129.44 per share in May 2015 to as low as $52.59 per share on 12, November 2015, respectively $42.67 per share on January 18, 2017.
Those who purchased NYSE:MNK shares have certain options and should contact the Shareholders Foundation.
Shareholders Foundation, Inc.
3111 Camino Del Rio North – Suite 423
92108 San Diego