KaloBios Pharmaceuticals Inc, the biotech made famous by the now-disgraced biotech “guru” Martin Shrekli, finally resumed trading on Wednesday on the OTC market after being officially delisted from the Nasdaq exchange, and it was not pretty. Shares of the pharma company dropped from it’s previous close of $23.59 to as low as $2, before rebounding to close at $4.39.
Investors in the company have been on a roller coaster ride over the last couple of months, seeing their shares rise from just over $4 when Martin Shrekli announced his large stake all the way up to $39.50 on November 23rd in the subsequent feeding frenzy, but shares have now sunk back to $4 and change after the news of Shrekli’s arrest on fraud charges.
The firm eventually filed for bankruptcy after Shkreli’s arrest in December. The bankruptcy filing and the charges against Shkreli and another Kalobios exec were noted as as reasons for the firm’s delisting from Nasdaq, and that KaloBios has not filed a financial report for the quarter that ended Sept. 30th to date.
The firm initially appealed the delisting from Nasdaq, but then dropped the appeal after its new board decided to focus on reorganizing instead of trying to stay on Nasdaq.
Ex Kalobios CEO Martin Shrekli charged with fraud
Martin Shrekli’s first mistake was to think he could just tag along on the new trend in the pharma industry of buying up old, off-patent drugs with no good alternative and then jack up the prices by several fold. Shkreli’s firm Turing Pharmaceuticals AG, raised the price of an inexpensive to produce anti-parasite tablet more than 50-fold, leading to a firestorm of criticism and a congressional investigation. Shrekli’s reputation was seriously tarnished by the episode, and is in tatters now after his recent arrest on fraud charges
Turing has backed off on the price increase, and points out that it gives discounts of up to 50% to hospitals and has special programs to help lower income patients afford the drug.
As reported by ValueWalk, Shrekli was charged with fraud in mid-December, with federal prosecutors focusing on questionable asset transfers while he was manager for hedge fund MSMB Capital Management and as CEO of biotech Retrophin.
And so the (short) tale of Kalobios and Martin Shkreli looks like it is finally ending.