Martin Shkreli's KaloBios Pharmaceuticals files for bankruptcy

By Andrew V. Pestano  |  Dec. 30, 2015 at 7:45 AM
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DOVER, Del., Dec. 30 (UPI) -- KaloBios Pharmaceuticals Inc., the company where infamous biotech investor Martin Shkreli was recently fired as CEO, filed for Chapter 11 bankruptcy on Tuesday.

A judge to precede the case has yet to be determined, according to the U.S. Bankruptcy Court in the District of Delaware. The company's stock was halted on Dec. 17, the day Shkreli was arrested on charges of securities fraud.

KaloBios was granted a hearing in February over its appeal of NASDAQ's decision to delist its shares.

Shkreli, 32, infamous for shepherding Turing Pharmaceuticals to a 5,000 percent price increase of an essential drug, was fired on Dec. 21 from his position as CEO of KaloBios.

KaloBios said it "terminated" Shkreli as CEO. The company also said he resigned from his post as a member of its board.

Shkreli was arrested in relation to a firm he founded in 2011, unrelated to the price hike he instituted for Daraprim with Turing Pharmaceuticals. He was released after posting a $5 million bail.

Prosecutors allege he illegally took stock from his biotechnology firm, Retrophin Inc., and used that to pay debts from unrelated business dealings. The Retrophin board of directors later sued Shkreli and he was ousted from the company where he served as CEO.

In August, Turing Pharmaceuticals acquired Daraprim, often used to treat toxoplasmosis in people with compromised immune systems like AIDS patients, and the company immediately increased the price of the drug. The price increase raised the average treatment costs for patients from about $1,130 a year to $63,000. Certain patients may need to pay up to $634,000 each year for Daraprim treatment.

Although toxoplamosis isn't considered dangerous in people who are generally healthy, for people who are pregnant or have a weakened immune system, such as AIDS or cancer patients, the effects of the infection can be severe. Daraprim is also used to treat malaria.

The embattled Shkreli received more negative backlash earlier this month when it was revealed he was the buyer of Wu-Tang Clan's one-of-a-kind album, Once Upon a Time in Shaolin. He paid $2 million for the only issued copy of the album, immediately placed it in a vault and said he "probably won't listen to it for years."

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