KaloBios Files for Bankruptcy
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.
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.