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Mallinckrodt (MNK) boasts its top-selling Acthar is the only only therapeutic adrenocorticoropic hormone (“ACTH”) product sold in the U.S. A whistleblower is now claiming no one knows exactly what is included in vials of Acthar sold by the company:

What if I told you that the government has been shelling out hundreds of millions for a drug for years and no one knows exactly what’s in it? A new lawsuit from a former employee at Mallinckrodt Pharmaceuticals claims exactly that. The drug in question is called Acthar. It costs about $40,000 and is mainly used to treat infantile spasms …

Now, former Mallinckrodt Associate Director Rasvinder Dhaliwal, in a whistleblower lawsuit, claims that is all because of an elaborate scheme perpetrated by Mallinckrodt and Accredo Pharmacy, a mail order pharmacy owned by Express Scripts.

It is usually a bad sign when employees or former employees sue a company. It could be easy for MNK bulls to dismiss short sellers. It could be more difficult to dismiss employees who have inside information on the company and may not seem financially motivated to see the stock fall. I had the following takeaways on the lawsuit.

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