KaloBios, drugmaker briefly helmed by Martin Shkreli, files for bankruptcy
Martin Shkreli leaves a New York courthouse on Dec. 17 after his arraignment on charges of securities fraud.
Cancer drug research company KaloBios Pharmaceuticals Inc. filed an emergency motion for bankruptcy protection Tuesday, less than two weeks after it fired its chief executive, Martin Shkreli.
The South San Francisco-based company has faced turmoil since Shkreli was arrested Dec. 17. A federal indictment charged the much-criticized former pharmaceutical executive with multiple counts of securities fraud, securities fraud conspiracy and wire fraud conspiracy related to another drug company where he had previously served as chief executive.
Federal prosecutors said the 32-year-old former hedge fund manager took money from San Diego-based Retrophin to repay clients after he lost some of his hedge fund investors’ money through bad trades. He was sued and later fired by Retrophin.
Before his arrest, Shkreli had been widely criticized for jacking up the price of Daraprim, the only approved drug to treat toxoplasmosis, a life-threatening infection that affects mostly pregnant women, cancer patients and AIDS patients. As chief executive at Turing Pharmaceuticals, Shkreli increased the price of the drug from $13.50 to $750 a pill.
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After his arrest, he resigned from his position at Turing, which has offices in Zug, Switzerland, and New York.
Shkreli served as chief executive and president of the board at KaloBios for just a month before he was arrested. KaloBios currently has eight employees.
According to the company’s Chapter 11 filing, Nasdaq halted trading of the company’s stock on the day Shkreli was arrested. That same day, KaloBios terminated Shkreli as chief executive, and he also resigned from his position on the company’s board of directors.
On Dec. 18, Kalobios said it received a letter from Nasdaq saying the company was going to be delisted from the stock exchange. Nasdaq cited, among other reasons, Shkreli’s criminal indictment and arrest, according to the filing.
KaloBios said Tuesday that it has requested an appeal of the decision to delist its securities. A hearing on the appeal is scheduled for Feb. 25.
The Associated Press contributed to this report.
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