Famed short-seller Andrew Left of Citron Research told our sister site Real Money on Wednesday that it's time to dump Mallinckrodt (MNK) , giving the Irish pharmaceuticals giant a $20 price target vs. the stock's close Tuesday at $67.77 a share.
"The Republicans want to dismantle Medicare, they want the right to negotiate drug prices -- and Mallinckrodt might be the dose that the party needs to dismantle Medicare," Left said in an interview with Real Money ahead of releasing a scathing analysis of the firm.
Left has long been short on Mallinckrodt, and his report helped drive the stock down 12% Wednesday to a $59.65 close. Mallinckrodt did not immediately respond to a request for comment, but Left wrote in his analysis that "President-Elect Trump has made it a promise to cut waste, fraud and abuse from the government's health care reimbursement system. With Medicare's own data, Citron has now proven that Mallinckrodt is the embodiment of all three."
He predicted that Mallinckrodt was about to take a serious blow to its earnings because the U.S. government's Centers for Medicare & Medicaid Services this week listed the company's chief drug, H.P. Acthar Gel, as the most expensive drug that Medicare and Medicaid cover. The CMS report said that the government spent $162,371 per patient on H.P. Acthar Gel in 2015 -- or more than $503 million in total.
To read Real Money's full report on Left's latest move, click here.
(This story has been updated to reflect Mallinckrodt's closing price.)