Mad Money

Allergan CEO fires back on Hillary Clinton tweet

Allergan CEO: Turing price raise 'one egregious situation'

Jim Cramer reminded investors on Monday that when high-quality stocks go lower, they get cheaper. That is exactly how he feels about Allergan, the acquisitive drug company formerly known as Actavis.

Allergan's stock has been slammed recently, but Cramer thinks the story behind this company could be even better today than it was before. The FDA recently approved Allergan's new anti-psychotic drug, Vrylar, and the company has lined up even more acquisitions to grow its business, including the $300 million AqueSys deal earlier in the month.

Additionally, Allergan is in the process of selling its generic drug business to Teva for $40.5 billion, and if the transaction is approved by the regulators, it could give Allergan enough cash to make yet another transformative acquisition.

"This stock has powered higher year after year, and every time you have bought it into weakness, it has ultimately made you a killing," the "Mad Money" host said.

Biotech stocks were hit hard on Monday when a tweet from presidential candidate Hillary Clinton said that the price gouging by drug companies should be stopped, and would lay out a plan to stop it. If Clinton becomes president, should drug companies like Allergan be worried?

All of our intelligence says that it is going to be very hard for Hillary or any other candidate to really have a profound impact on drug pricing
Brent Saunders
CEO of Allergan PLC
Brent Saunders, CEO of Allergan.
Adam Jeffery | CNBC

To find out, Cramer spoke with Allergan CEO Brent Saunders. The CEO said, "All of our intelligence says that it is going to be very hard for Hillary, or any other candidate, to really have a profound impact on drug pricing. That being said, we have to take this very seriously because it creates a lot of pressure on the system." (Tweet this)

Saunders explained that Allergan does not participate in egregious price increases. So while it does take single-digit price increases from time to time, the company is not in the high- priced drug game. Instead, it focuses on innovative and private paying medicines.

"The example she [Hillary Clinton] tweeted about today was just one egregious situation. I think we have to separate the one-off kind of situations with what really happens. And, keep in mind, we need to have good pricing to create innovation," Saunders said.

Read more from Mad Money with Jim Cramer

Cramer Remix: The best way to play the selloff
Netflix CEO: All TV will be Internet in 10-20 yrs
Cramer game plan: Forget the Fed. Opportunity knocks!

Saunders cited the cure for hepatitis C as an example of this innovation. Such developments will cost money, so drug companies should be open to that while being careful about how large price increases will impact patients.

Going forward, Saunders says he has built a great growth company and is ready to make more strategic acquisitions.

"So what we have is a fantastic growth company. We have a company that is going to be growing top line double digit, expanding margins, a pipeline of 70+ mid to late stage programs and a retooled balance sheet to go out and do more smart, accretive, strategic acquisitions," he said.

Questions for Cramer?
Call Cramer: 1-800-743-CNBC

Want to take a deep dive into Cramer's world? Hit him up!
Mad Money Twitter - Jim Cramer Twitter - Facebook - Instagram - Vine

Questions, comments, suggestions for the "Mad Money" website?