In a swift set of blows, KaloBios Pharmaceuticals, Inc., a biotech company formerly headed by Turings Martin Shkreli, announced that it is being delisted from the Nasdaq stock exchange, and that the company's interim CFO and accounting firm have both resigned.
The series of events follows the companys Monday announcement that it had fired Shkreli, former CEO and chairman. On December 17, Shkreli was arrested on securities fraud charges relating to another biotech company he headed, Retrophin, as well as two hedge funds he managed. He pled not guilty and was released on a $5 million bond.
In a press release dated Wednesday, KaloBios reported that the Nasdaq informed the company in a letter sent December 18 that it would be delisted from the exchange. The letter cited a number of reasons for the delisting, including Shkrelis indictment plus the simultaneous indictment of Evan Greebel, the companys former outside counsel.
In November, Shkreli bought a majority stake in KaloBios, a South San Francisco-based biopharmaceutical company that was failing at the time. His first move at KaloBios was to license the rights to a version of the drug benznidazole, which is used to treat a Chagas Disease in Latin America. The disease, caused by a parasitic infection that can lead to deadly heart problems, is rare in the US, but common in Latin America.
The move struck fear in health experts, who expected Shkreli to dramatically raise the price of the decades-old drug. In September, Shkreli gained notoriety as the head of Turing pharmaceuticals, for dramatically raising the price of another drug that treats parasitic infections, Daraprim. He stepped down from Turing following his arrest.
Health experts were also concerned that Shkreli would use the Chagas drug license to exploit a regulatory voucher system set up by the Food and Drug Administration. That voucher system is intended to encourage companies to develop drugs to treat neglected disease, such as Chagas. But some pharmaceutical companies have instead sold the vouchers to other companies for hundreds of millions of dollars.
The day of Shkrelis arrest, trading halted on KaloBios shares and it has not resumed. The companys stock is set to be removed from Nasdaq on December 30.
