KaloBios fires Shkreli, embattled pharmaceutical executive reviled for price hikes

20 Jan 2016 | Author: | No comments yet »

KaloBios fires Shkreli, embattled pharmaceutical executive reviled for price hikes.

TRENTON, N.J. – In barely 24 hours, Martin Shkreli went from an egotistical pharmaceutical boy wonder running two small drug developers and live-streaming his daily activities to unemployed and facing securities fraud charges that could land him in prison for years. Reviled pharmaceuticals bigwig Martin Shkreli has been fired from a company he ran for just one month, days after he resigned from another one of his companies after his arrest for alleged securities fraud.KalosBios Pharmaceuticals was a faltering business until Mr Shkreli was revealed to be an executive and key shareholder last month, when its shares climbed dramatically. The California-based KaloBios Pharmaceuticals announced Monday that Shkreli was “terminated” as CEO and resigned from the board, offering no further comment.

Mr Shkreli became infamous around the world when it was revealed in September that his then-company Turing Pharmaceuticals had bought the Daraprim drug for treating Aids and cancer, and raised its price from $13.50 to $750 a pill. Last weekend, the University of California at Davis and Moffitt Cancer Center in Florida said they had suspended a planned drug trial sponsored by KaloBios. Kalobios shares rose from less than a $1 to a high of nearly $40 under his brief leadership, but its stocks have stopped trading in the wake of Shkreli’s legal drama. Federal prosecutors have now charged Mr Shkreli, 32, with running his former businesses like a Ponzi scheme, using money from new investors to try to repay investors whose money he lost.

A spokesman for Community Solutions said: “We serve people who depend on access to Aids meds every day, and as an organisation I don’t think we can keep this money.” Earlier this month, the Shkreli story took a bizarre twist when it emerged that the businessman was the proud owner of Wu-Tang Clan’s one-of-a-kind “lost” album, Once Upon a Time in Shaolin. The company’s stock was trading at less than $1 before he made the move, and it subsequently rose to as high as $39.50, giving the company a market value of more than $100 million. The band’s lead singer appeared to denounce Mr Shkreli in a statement, saying they had decided to give “a significant portion” of the $2 million he paid to charity. Amid mounting criticism from patients, doctors and politicians, Shkreli pledged to lower Daraprim’s price, but later reneged and instead offered hospitals a 50 percent discount — still amounting to a 2,500 percent increase.

To contact the reporter on this story: Doni Bloomfield in Boston at mbloomfiel12@bloomberg.net To contact the editors responsible for this story: Crayton Harrison at tharrison5@bloomberg.net Cecile Daurat Patients normally take most of the weekslong treatment at home, so they still face the 5,000 percent price increase, though Turing is offering financial aid to those who can’t afford the drug. KaloBios Pharmaceuticals Inc. is a faltering drug company whose shares skyrocketed after Nov. 19, when Martin Shkreli disclosed a huge stake and became its CEO and board chairman.

After several of social media accounts were apparently hacked Sunday and filled with crude messages, Shkreli tweeted: “I was hacked–I now have control of this account.” Its shares tumbled 70 percent in January after its drug for lung infections failed in testing, and the company announced it would shut down right before Shkreli and a group of investors swooped in with cash and pledges of financing to keep it going. Federal prosecutors allege that from 2009 to 2014, Shkreli made bad trades that lost money of some investors in his hedge fund, MSMB Capital Management, then looted a pharmaceutical company called Retrophin, where he was then CEO, for $11 million to pay back his disgruntled clients.

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