KaloBios Files for Bankruptcy
KaloBios Pharmaceuticals filed for Chapter 11 bankruptcy on Tuesday morning, over a week after former CEO Martin Shkreli was arrested by the FBI for securities fraud.
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KaloBios Pharmaceuticals Inc. (NASDAQ: KBIO) might be in too deep, and the same could be said for its recently appointed and then fired CEO, Martin Shkreli. The company filed for Chapter 11 bankruptcy on Tuesday morning, over a week after Shkreli was arrested by the FBI for securities fraud.
Shkreli has been in the news a fair amount this fall, whether it’s jacking up the price of an AIDS drug, buying a highly acclaimed one-of-a-kind Wu-Tang Clan album or taking over KaloBios. Prosecutors reportedly have charged him with taking shares from Retrophin to pay off other unrelated business debts. It’s worth noting that Shkreli founded Retrophin back in 2011.
Previously, Shkreli bought the rights to Daraprim, a drug used in AIDS treatment for toxoplasmosis, or blood parasites. After this purchase, he hiked the drug price by about 5,500%. This preceded the great upheaval in the health care sector. As a result, many people, investors, regulators and politicians began to question how to properly value drugs and treatments.
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When Shkreli took a stake in KaloBios, shares skyrocketed from $0.90 per share in mid-November to over $30.00 by the beginning of December. There were reports that Turing’s CEO is in talks with KaloBios about continuing operations, considering its development of cancer drugs. According to the release, “the company is in discussions with Mr. Shkreli regarding possible direction for the company to continue in operation.”
However, it doesn’t look like the company was put in good hands.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
