[U 11.28.2018] Sad. To The Extent Marty Actually Believes His Wealth Is “Increasing”, He Misunderstands These TWO Suits.

Overnight, Marty posted what is becoming a series of increasingly unhinged blog posts. In this latest one, entire words and phrases are missing, from some of his sentences [typos are to be expected, but in this case, it is not clear he even read it over before sending it (likely by email) to his “friend”/surrogate blog curator].

It is… sad really, as he boasts of using his “vastly increasing” (but in truth, mostly non-existent, as we explain below) wealth to (among other things) destroy future Democratic political candidates and incumbents who “ran on…” bashing him. Uh-huh.

As I said in the last post, since he is locked away, he cannot fully sense how much things have changed in the more than a year, since he was removed from society. In his mind, he still lives in late 2016 — a time when Turing / Vyera was… profitable. It is no longer so.

I’ve personally seen this “frozen mind-set” phenomenon so many times — in even wildly intelligent long term incarcerated felons. Because all he hears about (excepting prison-related matters) comes via paper mail and telephone and email. He doesn’t brush into average, honest working people on the street in Murray Hill any longer, as he gets his McD’s — or stops by a bodega. He only hears what his “friends” tell him on the phone — which is only what they think he “wants to hear”. Confirmation bias, that. And it is powerful. He thinks most people still believe 45’s robber baron approach will bring the ordinary Joe prosperity.The mid-terms (now a blue tsunami) belie that notion.

But I digress. The minor point here is that Marty feverishly claimed his wealth was increasing, by the day. Whatever it is, it now primarily consists of his interest in privately held Turing (the subject of repeated renames).

A recent SDNY court opinion would suggest his wealth there “stored” (in his mind) is… actually vanishing, by the day. [The parties, post this latest opinion, have called off the judicial conference — presumably to conclude settled damages agreements, now — and avoid the considerable cost of appeals.]

In the Impax v. Turing matter (background here), the able US District Court judge just confirmed last week that Turing (now called Vyera or Phoenixus depending on whom you believe) owes payments to Impax, into the high dozens of millions of dollars, since early 2016 — and now accreting. [Impax owes Turing some rebate payments, on Daraprim — via Medicare, as well — but the net liability far and away falls to Turing / Vyera /Phoenixus. Here is the able Judge Ramos’ original opinion finding against Turing and Marty, from 2017.]

This outcome — when coupled a year or two from now, to the personal liability Marty has in the Tiopronin antitrust suit — and his myriad legal bills, for his criminal appeals, and ongoing civil securities fraud matters (even before the Retrophin arbitration — likely $70 million in liability, to him, personally)… all point to a negative net worth for Mr. Shkreli. The liabilities are unliquidated and contingent at this point — but they are coming. Just like a freight train, on a cold rural Pennsylvania (near FCI Ft. Dix) night… the whir is building to a roar — as that night train draws nearer the prison gates, running along side it thunderously, as it passes.

Yes, Marty is broke, He cannot see it yet — or he (and his surrogates) are deceiving themselves. So even if his meager political notions held any intellectual currency (and they do not, after 2018 mid-term results)… he has no real fiat currency to expend on promoting them.

Again — sadly — the upshot is… he has faded into irrelevancy.

In passing, I’ll note that his business take on generics… is likewise riddled with errors due to his “pre-2016 frozen” mindset. It is true, were he free, he could no longer increase a generic’s price by 5,000 per cent in the US. But as Mr. Buffet well knows (and Marty acknowledges), generics are a very solid, stable (if decidedly unsexy) cash cow — in a US and global environment driven by cost containment. That is the new world — not runaway drug price inflation. And generic companies will make solid returns for investors. Not 5,000 per cent — but in the teens, over time — to a near certainty.

[He may be (inadvertently) right about Moderna, though. It may be a short — not because it is a bad company — but because so many of these promising new IO / bio-science discovery plays… flame out in real world clinical trials. I will do a little more looking at that — on my other property (as that link indicates, the “look” is now completed) — since Merck is/was an early round Moderna believer. The November 28, 2018 IPO prospectus shows, at page 200, very strong (if early) interim clinical trial data — for the cancer vaccines mRNA approach — so, my updated call is that Marty is wrong — about Moderna as well.]

Onward.