Stocks

KaloBios (KBIO) Falls on NASDAQ Stock Delisting Notice

Shares of KaloBios Pharmaceuticals are trading lower today after the company received a delisting notice from NASDAQ due to its failure to satisfy the requirement for continued listing.

The stock price of the biopharmaceutical company declined more than 38% to $24.45 per share at the time of this writing.

KaloBios Pharmaceuticals
Chart via S&P Capital IQ

KaloBios failed to file quarterly report on Form-Q

According to NASDAQ, KaloBios is currently not in compliance with its continued listing requirements due to its failure to submit its quarterly report on Form-Q for the quarter ended September 30, 2015, with the Securities and Exchange Commission (SEC).

KaloBios received a notice regarding its noncompliance with Rule 5250 (c) (1) of the NASDAQ Listing Rules on November 17. The biopharmaceutical company has 60 days from the date it received the noncompliance notice to submit a compliance plan to NASDAQ on or before January 16, 2016.

NASDAQ will grant an exception of up to 180 days to KaloBios from the due date of the filing of the 2015 third quarter 10-Q if it accepts the compliance plan. In other words, the biopharmaceutical company has until May 16, 2016, to regain compliance with Rule 5250 (c) (1).

According to NASDAQ, the comoany may regain compliance anytime during the 180 days period after filing its third quarter report on Form 10-Q, and all the subsequent reports required to be submitted to the SEC within that period.

KaloBios will be given the opportunity to appeal if the NASDAQ decides not to accept its compliance plan. The biopharmaceutical company plans to file its quarterly report on Form 10-Q with the SEC as soon as possible. However, it cannot make an assurance that it would be able to submit it on or before January 16, 2016. It cannot also assure whether NASDAQ would grant and exception to extend the period that would allow the company to comply with Rule 5250(c ) (1) beyond the set date.

KaloBios stock rose 3,600% over the past five trading days

Over the past five trading days, the stock price of KaloBios surged by more than 3600%. The sudden significant increase in the company’s shares was primarily due to the investment of an investor group led by Martin Shkreli, the founder of Turing Pharmaceuticals.

Based on a regulatory filing, the investor group led by Shkreli owns approximately 70% of the outstanding shares of the company. Shkreli became the CEO and Chairman of the board of directors of KaloBios. David Moradi and Marek Biestik of Anthion Partners II LLC (part of the investment group) together with Tony Chase, were appointed to the Board of KaloBios.

According to the company, Shkreli and other investors committed at least $3 million in equity investment in addition to the committed $10 million equity financing facility.

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