Martin Shkreli led an investor group that took control of KaloBios Pharmaceuticals Inc. (KBIO) in November 2015, after snapping up around 70% of company's outstanding shares when prices hit an all-time low of 44 cents. However, he was ousted by the company following accusations by federal prosecutors for running a Ponzi-like scheme. He also faced severe criticism for forcing a fifty-fold price hike on Daraprim, a drug from Turing Pharmaceuticals used for treating patients with weak immune systems. (For more, see Martin Shkreli Arrested on Securities Fraud.)
While KaloBios steered clear of the criminal charges and the Daraprim price hike, which were attributed to Shkreli, the company suffered lawsuits from investors stemming from its ousted executive. It led to the delisting of the company's shares from the NASDAQ, forcing it to seek bankruptcy protection.
Shkreli was looked upon as a savior for investing in the company during the troubled times. He had formulated a plan based on the promising lenzilumab drug which is being developed to treat rare cancer called Chronic Myelomonocytic Leukemia (CMML). In August, Shkreli sold his remaining stake in KaloBios.
Post Shkreli Era
The South San Francisco, California-based company specializes making drugs for rare diseases, including rare forms of cancers. It has scrapped Shkreli’s turnaround plan which focused solely on lenzilumab, and is moving to execute its existing pipeline across a larger product range. It has started patient enrolment for phase I and II of the lenzilumab drug trial. The interim data reports from the study are expected as early as mid-2017. Trials of lenzilumab are also being explored for treatment of another rare cancer in children called juvenile myelomonocytic leukemia (JMML).
The company is hinging its revival on the success of its Benznidazole drug, intended to treat the tropical disease called Chagas, estimated to affect 8-to-10 million people. While drug formulations are already available in select nations, the company is banking on wide demand. The disease is also a priority for FDA, and last year it promised a priority review of any drug getting developed for the disease.
As the company moves away from Shkreli’s shadow, it faces many obstacles. While relisting on primary stock markets will be a key objective, the company is open to public-private partnerships for drug development, newer ways for collaboration for commercial product availability, and seeking new opportunities to fund research.