Cramer: Pharma firm with room to run

"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 Pharma in 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."

Continued here:
Cramer: Pharma firm with room to run