Former president Donald Trump was highly critical of opioid drug manufacturers. He wanted to shed more light on their role in the opioid crisis. The rise in prescription opioids has drawn the attention lawmakers across the country. Opioid prescriptions were 219 million in 2011; this was nearly triple the number reported 20 years earlier despite the fact the level of pain felt by Americans may not have increased proportionately. Others believe opioid manufacturers may have aggressively marketed these drugs to doctors without properly describing the risk.

Drug overdoses represent the largest cause of accidental deaths in the United States; they recently surpassed car accidents. Many believe the rise in drug overdoses has been driven by the use of prescription opioids. According to the National Institute on Drug Abuse, in 2016, the number of drug overdoses were 64,000, up 23% Y/Y and more than twice the 23,518 reported in 2002. In 2002, opioid prescription drug overdoses were 32% of total drug overdoses. That figure increased to 43% in 2015, and 59% in 2016. Opioid prescription overdoses continue to hit record highs even after the government’s concerted efforts to reduce them.

Four years after Trump threw down the gauntlet, municipalities are still suing opioid manufacturers. The lawsuit appear to be never-ending. Trials are occurring in New York, Tennessee, West Virginia and California. Are lawmakers looking to get funds to support treatment centers and stem opioid addiction, or are they using fame and publicity from trials to advance their political careers? Trump’s $8 billion opioid deal with Purdue Pharma in October just have ushered in more deals. The current malaise puts a cloud over opioid manufacturers like Endo (ENDP) and Teva (TEVA), and short sellers have pounced.

The effective short interest in ENDP exceeds 70%. The constant selling pressure has driven ENDP’s market capitalization down to $870million. The company has $1.5 billion in cash on hand, which demonstrates how ridiculous its valuation is. A share price below $4 is not bearish; it simply demonstrates manipulation by shorts. The fact pattern suggest big investors like BlackRrock and Bill Miller have waged war against ENDP shorts. It may be only a matter of time before the market realizes how undervalued ENDP is, causing other investors to buy in. Read more:


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