Vital Therapies Research Profit

Martin Shkreli tells a story about how he and his colleagues made $20M shorting a company called Vital Therapies after extensive research revealed their liver dialysis machine wouldn't work.

"We had just done this stock trade in my personal account where we made $20 million shorting a stock called Vital Therapies. They were developing a liver dialysis machine. We spent day and night stalking this company and figuring out everything about their attempt to make a liver dialysis machine.

It works for kidneys really well, but they wanted to take that same idea and apply it to liver. Sounds good, but doesn't work. Me and two colleagues spent day in day out researching and figuring this company out. We wrote a 40-page report and put it out. The stock fell 40% just on our report.

Two weeks later, the device ended up proving that it didn't work - it didn't help anybody with severe liver disease. Then the stock went down 90%. We were short the stock. These guys were basically fraudsters, lying about their liver device which had proven it doesn't even help people, but they were still trying to get through that venture grind and public company grind of lying and trying to make things stick and put the best spin on things."