KaloBios Pharmaceuticals, Drugmaker Tied To Martin Shkreli, Is Filing For Bankruptcy
The drugmaker listed both its assets and liabilities in the range of US$1 million to US$10 million.
After investing in KaloBios, Shkreli took over the position of CEO in the company on November 20. The company’s stock was halted on December 17, the day Shkreli was arrested on charges of securities fraud.
An investor, who purchased shares of KaloBios Pharmaceuticals Inc (NASDAQ:KBIO), filed a lawsuit in California over alleged Securities Laws violations by KaloBios Pharmaceuticals Inc in connection with certain allegedly false and misleading statements.
According to court records, University of Miami, Ernst & Young and Lonza Sales Ltd are among the biggest creditors for KaloBios. It cited Mr Shkreli’s arrest, Nasdaq’s delisting notice, and the departures of its accounting firm, chief financial officer and two board members as challenges that have disrupted its ability to restructure out of court.
KaloBios Pharmaceuticals, Inc.is a biopharmaceutical company. Those vouchers can be sold to other companies, and KaloBios said they can fetch hundreds of millions of dollars in proceeds.
NASDAQ formally delisted the company’s stock, and KaloBios has appealed the decision, which will be heard on February 25, 2016.
Shkreli, 32, has pleaded not guilty, and on Twitter has called the allegations “baseless and without merit”.
Following the build-up of Shkreli’s stake, the stock price of KaloBios Pharmaceuticals rocketed by over 700% from $1.97 per share to as much as $16 per share during extended trading last month. The drug is used to treat toxoplasmosis, a parasitic disease that afflicts people with weakened immune systems, including AIDS patients and pregnant women.
Shkreli was arrested in relation to a firm he founded in 2011, unrelated to the price hike he instituted for Daraprim with Turing Pharmaceuticals. Shrkeli rescued the company from bankruptcy-it was preparing to wind down operations just before he stepped in after running out of funding.