One of the biotech companies run by Martin Shkreli, the reviled drug price-gouger charged with securities fraud last week, was informed on Wednesday that its stock was to be delisted by NASDAQ because of Shkreli’s arrest and other issues.
Meanwhile, KaloBios Pharmaceuticals Inc also is dealing with the abrupt resignation of its accounting firm and a void left by its firing of Shkreli.
KaloBios was running out of money and planning to suspend its research programs and shut down operations last month. That is when Shkreli, the chief executive of Turing Pharmaceuticals Inc, swooped and gained a controlling interest in the company. Shkreli was immediately named chief executive and chairman of the board of the South San Francisco, California, drug developer.
Photo: Reuters
In a statement on Wednesday, KaloBios said that NASDAQ wrote that it would be removed from trading on Wednesday next week if KaloBios does not appeal. The company has not yet decided whether it would appeal.
NASDAQ cited reasons for the delisting including the indictment and arrest of both Shkreli and an outside attorney for KaloBios, Evan Greebel, plus the company’s noncompliance with financial reporting rules. KaloBios has not filed with the US Securities and Exchange Commission (SEC) a report on its financial results for the three months ended Sept. 30, as publicly traded companies are required to do every three months.
Shkreli became notorious after hiking the price of Daraprim, the only approved drug for toxoplasmosis, a rare and sometimes deadly parasitic infection, by 5,000 percent — from US$13.50 to US$750 per pill. Shkreli has been deluged with criticism from patients, politicians and others since hiking Daraprim’s price late in the summer, shortly after the US rights to sell it were bought by Turing, a biotech company Shkreli founded last year.
On Thursday last week, Shkreli, a 32-year-old former hedge fund manager, was arrested in New York and charged with securities fraud and conspiracy related to a pharmaceutical company he previously ran called Retrophin.
Federal prosecutors allege that from 2009 to last year, Shkreli made bad trades that lost money for some investors in his hedge fund, MSMB Capital Management. Prosecutors say he then looted Retrophin for US$11 million to pay back his disgruntled clients.
Shkreli has pleaded not guilty and said that he was targeted for increasing Daraprim’s price. He was released on US$5 million bail on Thursday last week.
Greebel was charged with conspiracy and also pleaded not guilty. The two men face similar allegations in a civil complaint filed by the SEC.
KaloBios fired Shkreli as chief executive and he resigned from its board on Thursday last week, though the company did not announce that until Monday. Also on Monday, its independent registered public accounting firm, Marcum LLP, resigned as the independent accounting firm for KaloBios, less than two weeks after being retained on Dec. 8.
KaloBios has not announced who is to serve as chief executive and chairman, and it has not responded to questions on the subject by The Associated Press. Its stock has not traded since Wednesday last week, when its shares closed at US$23.59.
Shkreli resigned on Friday last week as chief executive of Turing, which has offices in New York and Zug, Switzerland.
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