Shkreli resigns as Turing CEO after securities fraud arrest | Business News

Shkreli resigns as Turing CEO after securities fraud arrest

23 Dec 2015 | Author: | No comments yet »

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President Barack Obama on Saturday vetoed two resolutions passed by the U.S. “We wish to thank Martin for helping us build Turing Pharmaceuticals into the dynamic research focused company it is today, and wish him the best in his future endeavors,” Tilles said.Trenton, New Jersey: The pharmaceutical executive reviled for price-gouging resigned Friday as head of the drugmaker Turing Pharmaceuticals, a day after being arrested on charges of securities fraud related to a company he previously ran.New York: He’s the enfant terrible of pharmaceuticals, a 32-year-old CEO who unapologetically raised the price of the only approved drug for a rare disease from $13.50 to $750 per pill.A news conference announcing federal securities fraud charges against former hedge fund boss Martin Shkreli took an unusual turn on Thursday with a question about a $2 million (Dh7.3 million) copy of a Wu-Tang Clan album he bought in May.

Infamous pharma villain Martin Shkreli fancies himself a hip-hop Rockefeller from Sheepshead Bay — and claims the shaming chorus he faces online doesn’t even register. “I don’t mean to be presumptuous, but I liken myself to the robber barons,” the loathed entrepreneur told Vanity Fair in an interview before his stunning arrest Thursday. “The attempt to public shame is interesting. Shkreli, 32, had bragged to Bloomberg Businessweek about buying the only copy of the popular New York-based hip-hop collective’s Once Upon a Time in Shaolin, drawing ire from music fans around the world when he said he had no plans to listen to it. But his strategy of finding an old drug, raising its price, and taking the profit is one that’s increasingly common among a new breed of drugmakers.

Because everything we’ve done is legal,” he said. “Rockefeller made no attempt to apologize as long as what he was doing was legal.” Judging from the seven-count indictment brought against him, the feds disagree. The measures targeted the Environmental Protection Agency rule limiting emissions from new power plants and a second standard that covers existing facilities. He’s an unabashed self-promoter who livestreams his daily life and boasts he’s “the world’s most eligible bachelor” and “the most successful Albanian to ever walk the face of this Earth.” And he’s an equally unabashed provocateur who jousts online with his critics. Then, Alex Tabarrok, professor of economics at George Mason University, discusses with Ameera David why pharmaceuticals cost so much in the U.S. and how the FDA could be doing more to help consumers in need.

The regulations are a signature part of the president’s drive to combat global warming. “The Clean Power Plan is essential in addressing the largest source of greenhouse gas pollution in our country,” Obama said in his message to lawmakers. “It is past time to act to mitigate climate impacts on American communities.” The so-called resolutions of disapproval passed the House on Dec. 1 and the Senate on Nov. 17 with majorities well short of what’s needed to override a veto. He’s accused of repeatedly losing money for investors and lying to them about it, as well as illegally taking assets from one of his companies to pay off debtors in another. “Shkreli essentially ran his company like a Ponzi scheme where he used each subsequent company to pay off defrauded investors from the prior company,” Brooklyn U.S. After the break, Ben Schlappig, blogger for One Mile at a Time, explains why travel service Skiplagged is surging in popularity and if the legal challenges it faces are a real threat. The company announced today that Shkreli has resigned as CEO. “Shkreli has become the Wolf of Pharma Street — he’s basically come to represent everything that was bad and wrong with pharma,” said Art Caplan, a medical ethicist at New York Universitye. On Thursday, US Attorney Robert Capers told reporters, “We’re not aware of where he got the funds that he raised for the Wu-Tang Clan album.” Capers’ comments immediately spurred hopeful posts on social media from music lovers that the album might be forfeited by the Turing chief executive officer during his federal prosecution.

He was yanked out of his Murray Hill apartment in handcuffs Thursday, charged with lying to investors and misappropriating $11 million from his former pharmaceutical company. He pleaded not guilty Thursday to charges that he looted Retrophin, a pharmaceutical company he founded, of $11 million to pay back disgruntled hedge fund clients.

Finally, in The Big Deal, RT correspondent Simone Del Rosario breaks down the potential security threats facing American train stations, which some claim are being neglected by the TSA. And while Shkreli may be reviled, said Caplan, “he’s not doing anything in terms of prices that other companies haven’t done.” The company took two heart drugs, Nitropress and Isuprel, and raised their prices by 212 percent and 525 percent, respectively. Turing also issued a statement that business would continue as usual and that no patient would be denied access to Daraprim, the drug whose price hike made Shkreli a pariah to both patients and other pharmaceutical companies. Shkreli became the target of global revulsion after he jacked up the prices on a lifesaving drug and then reveled in the backlash from a range of critics — including Donald Trump.

Turing also said it was sending a similarly worded letter to doctors stressing that it will continue to offer financial assistance to eligible patients needing Daraprim who are either uninsured or have commercial insurance. Rodelis was working to ensure “long-term availability” of the tuberculosis drug, and planned to maintain patients’ access, the company said on its website. It treats a rare parasitic disease that strikes pregnant women, cancer patients and AIDS patients. (The criminal case doesn’t involve Turing or Daraprim. The drug’s rights were returned to the nonprofit Purdue Research Foundation, who sold it to Rodelis earlier this year, in September after an outcry over the price increase.

Shkreli resigned as Turing CEO on Friday.) But it sparked outrage that resounded from medical centers to the presidential campaign: Hillary Clinton termed it price-gouging, while Donald Trump called Shkreli “a spoiled brat.” Shkreli grew up in Brooklyn, the son of immigrant parents who worked at janitorial jobs. Amid a deluge of criticism from patients and politicians, Shkreli pledged to lower Daraprim’s price, but later reneged and instead offered hospitals a 50 per cent discount — still amounting to a 2,500 per cent increase. He has said he stopped going to class and didn’t graduate, though he evidently bears no ill will: His foundation recently gave the school $1 million.

By his early 20s, Shkreli had his own hedge fund — and had a reputation as an outspoken short seller, or investor who bets a stock’s price will decline. Big price increases are just business, Shkreli has said. “I think health-care prices are inelastic,” he said at an event in New York this month. “I could have raised it higher and made more profits for our shareholders.” Shkreli has previously said that his goal is to use his financial gains to develop new drugs and that he gives much of his company’s medicine away for pennies.

Undeterred, Shkreli launched a new fund — it also collapsed, prosecutors say — and launched himself in 2011 into the pharmaceuticals business as CEO of Retrophin, which also has drawn scrutiny over sharp drug price increases. Photos of him, wearing a grey hoodie as he was escorted by authorities, spread on the internet like wildfire, generating social media posts celebrating his apparent fall. And he’s taken pains to distance himself from Turing and Shkreli. “To compare us to Turing is ridiculous,” Pearson said during a Dec. 15 interview with CNBC. “That is a single-product company.” Valeant declined to comment for this story. Yet Pearson has criticized Big Pharma companies for overspending on research, and the company has said that it looks for products that can be sold better and more profitably by Valeant.

It was eventually settled. “I had two guys parked outside of his house for six months” watching him, Shkreli told the rap news site HipHopDX in a tough-talking, expletive-filled interview published Wednesday, the day before his arrest. In Daraprim, and other drugs, Shkreli may have seen the same opportunity. “If you talk to anyone in pharma, maybe I don’t have the same resources as Pfizer, I may not have the same experience as Merck, but I’m crafty as f—,” Shkreli said in a Dec. 16 interview with the publication HipHopDX.

It said in September that Turing doesn’t represent its values, and in October that Valeant’s strategy “is more reflective of a hedge fund than an innovative biopharmaceutical company.” “It’s becoming a new financial model, it’s not just Turing — Horizon does this, Valeant does this,” Steve Miller, chief medical officer at drug-benefit manager Express Scripts Holding Co. said by phone. Miller has been a frequent critic of drugmakers, and he sits at the other side of the negotiating table, managing pharmaceutical costs for health insurers. “We have a new class of leadership at these organizations that no longer feels encumbered by the social contract that had previously existed,” Miller said. Still, Shkreli mused to HipHopDX about delving further into the rap world: bailing out up-and-coming artist Bobby Shmurda, who is jailed in a drug-gang case, and even writing raps of his own. KaloBios had announced plans to stop research programmes on two drugs and shut down the company shortly before Shkreli and an invested group swooped in on November 19, bought 70 per cent of its shares and promised a $3 million stock investment and $10 million in financing. Last month, he acquired a majority stake in a floundering drugmaker, KaloBios Pharmaceuticals Inc., sending its shares soaring, and named himself CEO.

Companies like Turing and Valeant that acquire drugs instead of developing them are the “exceptions and not the rule,” said Robert Langer, a professor at MIT and co-founder of more than 25 biotechnology companies.

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