Short seller and Mallinckrodt CEO go head to head

Mallinckrodt makes Valeant look like choir boys: Citron
Mallinckrodt makes Valeant look like choir boys: Citron

In a heated exchange on Tuesday, Andrew Left, a short seller and founder and executive editor of Citron Research, took on Mallinckrodt's CEO, Mark Trudeau, about the value of his pharmaceutical company and how it differs from Valeant.

Left, who called the decline in Valeant back in October, told CNBC's "Fast Money" on Tuesday that Mallinckrodt makes Valeant look like a "choirboy" by comparison.

"I think Mallinckrodt is worse because they are dependent on one drug, close to let's say 50 percent of their EBITDA, depends on what metric you want to look at, is dependent on one particular drug. Not let's say 30 that Valeant has," said Left.

He said there is no reason Mallinckrodt is any different than Valeant, and that the company's drug Acthar, which is used to treat seizures in babies, is the "poster child" of price gouging.

Skeptics have focused on Mallinckrodt's acquisition of Questcor in August 2014, which makes Acthar, which is a drug whose pricing was raised from $40 to more than $28,000 a vial over a decade, according to The New York Times.

Mallinckrodt shares have been sliding since late October, when Citron published the now infamous "Valeant: Could this be the Pharmaceutical Enron?" report.

Shares of the Dublin-based Mallinckrodt are down more than 50 percent over the past 12 months, and fell more than 10 percent on Tuesday.

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In response to these claims, Trudeau fired back in the same "Fast Money" segment, defending his company's reputation and rebutting Left's comments.

"The marketplace certainly pulled down Valeant today, and I want to be clear Mallinckrodt is absolutely not Valeant," said Trudeau. "First and foremost, Mallinckrodt is a well-diversified, strong company. We're transparent. Our strength is both operational and financial."

Trudeau added that Mallinckrodt delivered a very strong fiscal first quarter, which built on the momentum the company saw in the fourth quarter. He noted that Acthar represents less than one-third of the company's business, and it's growing at about 8 percent per year.

"We have a solid balance sheet. Very strong cash flow," he added. "We actually raised earnings per share guidance for the year. So, we've been delivering consistently and exceeding shareholder expectations. We have a very strong, solid business model. Well-diversified with excellent brands we're investing in and driving value across the board."

Still, Left argued that you could take Trudeau's exact response and "take the word Mallinckrodt out and put Valeant in."

— CNBC's Tae Kim contributed to this report.