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KaloBios files for bankruptcy protection

San Francisco biopharma's shares imploded in the wake of Martin Shkreli's arrest

KaloBiosKaloBios' brief moment in the spotlight is approaching an unedifying end after it filed for bankruptcy in the closing hours of 2015.

The short announcement in the US Bankruptcy Court for the District of Delaware company notes that it will "continue to manage and operate its business and assets as a debtor-in-possession" as the reorganisation plays out.

KaloBios focuses on the development of immuno-oncology therapies and has two drugs I clinical development, namely KB004 for myelofibrosis and myelodysplastic syndrome (MDS) and KB003 for chronic myelo-monocytic leukaemia.

The company emerged from relative obscurity after it was taken over by Martin Shkreli, who was arrested last month on charges of securities fraud relating to his time at another pharma company called Retrophin. 

Shares in the company rocketed from around $1 to almost $40 after an investment group led by Shkreli took a 70% stake in the firm, but imploded after his arrest and trading in the stock was suspended.

What followed was a litany of woe: Shkreli was fired as CEO and resigned from the board, the company's accounting firm severed ties and multiple senior figures jumped ship, including chief financial officer Christopher Thom and board members Tony Chase, Tom Fernandez and Marek Biestek.

It also emerged that KaloBios' former outside counsel Evan Greebel was also under investigation alongside Shkreli in the securities fraud probe. 

As a consequence, KaloBios suffered the indignity of being de-listed from the Nasdaq, although it said on December 29 it was appealing that decision and had asked for a hearing in February.

The bankruptcy filing - signed by chief restructuring officer Eugene Davis - notes that KaloBios has assets of somewhere between $1m and $10m and liabilities in the same range, including the University of Miami and a number of contractors including Lonza, Catalent, INC Research and PPD.

Article by
Phil Taylor

4th January 2016

From: Sales

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