Shares of Mallinckrodt (MNK) were falling by 8.3% to $39.10 on heavy trading volume on Monday morning, after short seller Citron Research issued a new report criticizing the pharmaceutical company.
Citron went after the company's H.P. Acthar Gel, which is used to treat a variety of conditions, and the enormous price increases that have brought the drug up to almost $40,000 per vial.
"While Express Scripts was supposed to protect the healthcare system from gouges like Acthar, they were actually distributing the drug through their CuraScript division," Citron claims.
However, now Express is changing its tune on Acthar Gel, claiming that the drug is overpriced and poor quality.
"Express Scripts has finally changed its stance on Acthar and the effect will send shares of Mallinckrodt to zero," Citron said.
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