Cramer's 'Mad Money' Recap: A Pain-Free Stock Play

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"Sometimes even Cramer can make mistakes," Jim Cramer told viewers of his "Mad Money" TV show Thursday, referring this time to Pain Therapeutics(PTIE Quote).

He said that he shot the company down during the Lightning Round segment of a recent show because he thought it was too risky. But after revisiting the company he found that it's on the cutting edge of modern medicine.

Cramer said the company has plenty of cash and trades at a low price-to-earnings ratio. "They're barely valued above what they have in the bank," he said.

But just as importantly, he said, Pain Therapeutics is close to perfecting the "holy grail" of medical science: the painkiller. He said the company could be a winner if it successfully develops abuse-resistant opiates.

Everybody has pain and everyone wants to kill it, but not everyone wants to end up practically a heroin addict, he said, pointing out that the popular painkiller OxyContin is euphemistically called "hillbilly heroin" because it is highly addictive and sometimes abused.

The company has partnered with King Pharma(KG Quote) to make abuse-resistant painkillers, and Cramer said such a product may not hook users, but it could hook doctors.

Since OxyContin was introduced in 1995 and generic versions were put on the market, the abuse of painkillers has skyrocketed, Cramer said.

Doctors don't want to prescribe OxyContin or its generics because their addictive properties are so similar to heroin and morphine, he added.