Cramer: Pharma firm with room to run

If you're looking to put money to work into pharma, Cramer thinks Mallinckrodt, a maker of drugs to control pain, may warrant attention.

The company has garnered a lot of attention recently due to its drug Acthar.

Largely used to treat multiple sclerosis, recently some experts have charged there's little evidence that Acthar works better than much cheaper options. In turn, some private health insurance companies have curtailed or eliminated spending on this drug. Proponents of the drug, however, say it is a worthy option for patients who have failed on other therapies.

Pharmaceuticals health care drugs cost
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"This drug is misunderstood," said, "Mark Trudeau, the President and CEO of Mallinckrodt Pharmaceuticals on "Mad Money". "It's actually approved for 19 different indications. It's a drug that's really delivering value. And there's future value to be unlocked."

However, in addition to the pipeline, Cramer likes Mallinckrodt for reasons that are strictly financial.

"The company is headquartered in Dublin, Ireland. Therefore it's subject to the Emerald Isle's extremely low tax regime," Cramer said. "And that means when Mallinckrodt acquires a U.S. company, it can instantly boost the target's earnings simply by gobbling that company up and making it Irish."

The catalyst isn't simply theoretical. "In the last year, Mallinckrodt has done two sizable deals, buying Cadence and then most recently announcing the acquisition of Questcor Pharmain April," Cramer said.

Given the pipeline and the ability to generate profits through acquisition, Cramer thinks the stock should have room to run.

"They're doing everything right," Cramer said.

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"Even though Mallinckrodt has already had a monster run, up more than 64 percent since being spun-off from Covidien last summer, I think it could have a lot more upside, in part because this company can keep snapping up other drug businesses to become a pharma colossus, or it could be swallowed by someone else looking to become a part of a lower tax regime itself."

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