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

Appeals court allows House Democrats to continue lawsuit for Don McGahn testimony

Don McGahn in an October 2018 Cabinet meeting. Photo: Chip Somodevilla/Getty Images

A D.C. appeals court on Friday allowed House Democrats to continue their case for testimony from former White House counsel Don McGahn before the House Judiciary Committee.

Why it matters: The ruling has broader implications beyond this specific instance, agreeing that Congress has the standing to sue to enforce subpoenas against executive branch officials even if the White House refuses to comply.

There's little consensus on TikTok's specific national security threat

Illustration: Aïda Amer/Axios

TikTok has become a Rorschach test for how U.S. politicians view China, with little consensus on the specifics of its threat to homeland security.

The big picture: Much of what D.C. fears about TikTok is fear itself, and that's reflected in President Trump's executive order to ban the app by Sept. 20 if it's not sold by parent company ByteDance — alongside another focused on Chinese messaging app WeChat and its parent company Tencent.

U.S. sanctions Hong Kong leader Carrie Lam

Photo: Anthony Kwan/Getty Images)

The Treasury Department on Friday placed sanctions on Hong Kong leader Carrie Lam, following months of tension as she has allowed continued overreach by Beijing to subvert Hong Kong's autonomy.

Why it matters: It's the toughest sanction yet imposed on China for its destruction of Hong Kong’s relatively free political system.