The next shoe has dropped in the Martin Shkreli saga.
KaloBios Pharmaceuticals, a small drug maker in which Shkreli and some investors purchased a controlling stake last month, on Monday ousted him as chief executive. The move comes in the wake of his arrest last week for securities fraud, which also prompted Turing Pharmaceuticals, a privately held drug company where he was also chief executive, to replace him.
Meanwhile, the University of California, Davis, and Moffitt Cancer Center in Florida suspended their participation in a clinical trial that was to have been sponsored by KaloBios Pharmaceuticals, which is hoping to develop a treatment for a form of leukemia, according to ClinicalTrials.gov, a federal database. Even with Shkreli out at KaloBios, the Moffitt center does not plan to resume the trial, a spokeswoman said.
Last Thursday, Shkreli was indicted for illegally using stock from Retrophin (RTRX), a drug company he launched in 2011, to pay debts to investors in MSMB Capital Management, a financially troubled hedge fund that he had run. Authorities allege Shkreli, 32, used the fund as a “personal piggybank” and ran a “Ponzi-like scheme.” The Securities and Exchange Commission also filed a civil lawsuit.
The indictment was the result of a probe that began in 2012. But the arrest came as Shkreli was riding a wave of national notoriety for raising the price of Daraprim, a decades-old, life-saving medicine by 5,000 percent — from $13.50 a tablet to $750 — and then using social media to mock his critics.
Daraprim is used to treat a rare parasitic infection known as toxoplasmosis, which can be fatal, especially for people with AIDS or who have weakened immune systems. But there are no generic alternatives, partly because Turing makes it difficult for such companies to obtain needed ingredients for testing.
Shkreli’s arrest continues to reverberate.
Last week, a homeless charity returned a $15,000 donation that Shkreli had made earlier this year. “We serve folks who depend on access to AIDS meds and needed to be able to look the community in the eye,” said a spokesman for Community Solutions, which is based in New York. “So, we decided it’s not money we can keep.”
Meanwhile, over the weekend, Shkreli told The Wall Street Journal that he became a target for authorities after raising the price of Daraprim.
“‘Trying to find anything we could to stop him,’ was the attitude of the government,” Shkreli told the Journal. “Beating the person up and then trying to find the merits to make up for it — I would have hoped the government wouldn’t take that kind of approach.”
This is not the first time that Shkreli has offered a cynical view about the attention he’s received from the government for his pricing maneuver. Earlier this month, he made a similar remark at the Forbes health care industry conference in response to questions about the federal probe as well as criticism from Hillary Clinton and Bernie Sanders, who returned a campaign donation that he made.
“Politicians have to beat up on guys who are seen to be public enemies,” said Shkreli, who wore a hooded sweatshirt and sneakers for the occasion. “That comes with the territory.”