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Chris Potter / Flickr Creative Commons

I write a lot about financial engineering, a process through which private equity firms can juice returns without necessarily improving the underlying asset. But any negative connotations of such behavior pales in comparison to the profit engineering Chicago-based Valor Equity Partners has overseen, as a key investor in Marathon Pharmaceuticals, the Illinois-based drug company that tried to jack up prices on its Duchenne muscular dystrophy treatment to a whopping $89,000 (or an equally outrageous $54k after various rebates and discounts).

For context, this same formulation can be bought outside the U.S. for less than $2,000 (and, prior to Marathon's plans to introduce it stateside, many patients were importing). Moreover, independent experts argue that Marathon's costs for acquiring and developing the drug are unlikely to have topped $75 million, as the company never even conducted new registrational studies (i.e., the thing that costs drug cos a lot of cash). Or, put another way, Marathon would be in the black after treating just 200 of the country's 1,400 Duchenne patients for only one year, at the "discounted" $54,000 price. This isn't about funding R&D.

Marathon got so much media and political blow-back in the past 48 hours that late yesterday it decided to pause the drug roll-out while working out a new price. That's mildly positive, save for the patients who could actually use the treatments now at a reasonable cost.

Silent on all of this has been Valor and its founder Antonio Gracias, whose last name must seem like a cruel joke to those with Duchenne.

Gracias, best known in tech circles for sitting on the boards of Tesla and SpaceX, is a Marathon director but has declined repeated requests for comment. But two of Valor's LPs tell me that they are monitoring what one refers to as an "upsetting" situation.

When it comes to Valor, the only thing worse than price gouging is refusing to answer for your role in it.

Go deeper

Updated 4 hours ago - World

Mexican President López Obrador tests positive for coronavirus

Mexico's President Andrés Manuel López Obrador during a press conference at National Palace in Mexico City, Mexico, on Wednesday. Photo: Ismael Rosas/Eyepix Group/Barcroft Media via Getty Images

Mexican President Andrés Manuel López Obrador announced Sunday evening that he's tested positive for COVID-19.

Driving the news: López Obrador tweeted that he has mild symptoms and is receiving medical treatment. "As always, I am optimistic," he added. "We will all move forward."

4 hours ago - Politics & Policy

Sarah Huckabee Sanders to run for governor of Arkansas

Sarah Huckabee Sanders at FOX News' studios in New York City in 2019. Photo: Steven Ferdman/Getty Images

Former White House press secretary Sarah Huckabee Sanders will announce Monday that she's running for governor of Arkansas.

The big picture: Sanders was touted as a contender after it was announced she was leaving the Trump administration in June 2019. Then-President Trump tweeted he hoped she would run for governor, adding "she would be fantastic." Sanders is "seen as leader in the polls" in the Republican state, notes the Washington Post's Josh Dawsey, who first reported the news.

Coronavirus has inflamed global inequality

Illustration: Aïda Amer/Axios

History will likely remember the pandemic as the "first time since records began that inequality rose in virtually every country on earth at the same time." That's the verdict from Oxfam's inequality report covering the year 2020 — a terrible year that hit the poorest, hardest across the planet.

Why it matters: The world's poorest were already in a race against time, facing down an existential risk in the form of global climate change. The coronavirus pandemic could set global poverty reduction back as much as a full decade, according to the World Bank.