KaloBios files for bankruptcy after Shkreli arrest
KaloBios has filed for bankruptcy in the wake of chief executive Martin Shkreli’s arrest on securities fraud charges last month and its removal from the Nasdaq stock exchange.
The company said the arrest of its former chief executive Marin Shkreli, and the subsequent resignations of its accounting firm, chief financial officer and two board members, meant it would be unable to restructure the company
KaloBios received a delisting letter from the Nasdaq Stock Market on December 23. Four days later, two directors – Tom Fernandez and Marek Biestek – resigned. Both had worked with Shkreli prior to KaloBios, although neither has been charged with any wrongdoing. These departures left the company with just two directors.
The bankruptcy filing, dated December 29, revealed that KaloBios has assets of $8.4 million and debts of $1.9 million. The struggling company – which has tumour-fighting assets in its pipeline including KB003 and KB004 – was briefly boosted by the arrival of Shkreli as chief executive in November, and his investment saw shares at the time rise from below $1 to nearly $40.
However, the events of last month led the San Francisco-based firm to remove the 32-year-old from his position. Shares fell 53% following Shkreli’s arrest.
Shkreli chose to resign as chief executive at his other pharma company, Turing, after denying charges of taking money from his first company Retrophin to pay off unrelated business debts.
Turing – famous for the Daraprim price row – has weathered the storm of its former chief executive’s arrest somewhat more successfully. The company has appointed chairman Ron Tilles, who acted as a consultant to Shkreli at Retrophin, as his interim successor, while seeking a permanent replacement chief executive and cutting jobs.
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