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Alternative Market Briefing

Chanos hits Express Scripts, Mallinckrodt Pharmaceuticals in SALT presentation

Friday, May 19, 2017

Bailey McCann, Opalesque New York:

Famed short seller Jim Chanos of Kynikos Associates used his presentation at the SkyBridge Alternative Conference (SALT) along with a separate media Q&A to take the US healthcare system to task and more specifically, announce shorts on Mallinckrodt Pharmaceuticals and Express Scripts.

Mallinckrodt Pharmaceuticals is known for its distribution of the drug Acthar, which is designed to treat spasms in infants. The drug can also be prescribed for several other afflictions and represents both the primary source of revenue for Mallinckrodt and a primary cost driver for Medicare Part D.

According to Chanos, Acthar is the revenue stream for Mallinckrodt. His Express Scripts short is also tied into Acthar, as a handful of Express Scripts subsidiaries are paid to distribute Acthar exclusively. Chanos notes that the cost to patients for Acthar, like many other drugs, is extraordinarily inflated."This alliance may lead to performance enhancing drug prices," Chanos said. "But may give investors the blues."

Business Insider reporter Linnette Lopez recently reported on the suspect relationships surrounding Acthar and Chanos' presentation filled out some additional details. "If you look at Express Scripts 10K, it reads very ominously," Chanos said, highlighting a lawsuit brought by Anthem, one of the largest insurers i......................

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