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Shkreli fallout claims Turing jobs and KaloBios' listing

Both firms continue to suffer with job cuts and de-listing from the Nasdaq

Turing CEO Martin Shkreli The repercussions of Martin Shkreli's arrest continue to be felt, with Turing Pharma announcing job cuts and KaloBios facing de-listing from the Nasdaq.

Shkreli resigned as CEO of Turing in the wake of his arrest on allegations of securities fraud and operating a Ponzi-like scheme, and was ousted from the same role at KaloBios shortly afterwards. He has been released on a $5m bail bond and denies the charges.

The arrest does not relate to Shkreli's notorious decision to inflate the cost of Turing's main product Daraprim (pyrimethamine) by 5,000% shortly after taking control of the company.

Switzerland-based Turing has since started searching for a new chief executive - which could be a tough proposition given the negative reaction to the Daraprim price increase - and has announced that it plans to restructure the business and terminate an unspecified number of jobs. It will also expand its board.

Chairman and interim CEO Ron Tilles said reducing the headcount would "put us in the best position to continue executing on our long-term plan".

Meanwhile, KaloBios revealed in a Securities & Exchange Commission (SEC) filing yesterday that it would be de-listed from the Nasdaq for "a number of reasons", including the "recent criminal indictment and arrest of Martin Shkreli".

The SEC filing also cited the indictment of Evan Greebel, KaloBios' former outside counsel, who has also pleaded not guilty to the charges against him, as well as a failure to file a results statement for the third quarter. 

Earlier this week the KaloBios' chief financial officer Christopher Thom resigned his position, although the drugmaker said his departure was unrelated to the reasons cited by Nasdaq for the de-listing. Independent accountancy firm Marcum LLP has also severed ties with the company after just 13 days. 

A decision has not yet been taken on a possible appeal of the decision, according to the filing. If it takes no action by December 28 its stock will be suspended on December 30. Trading in KaloBios' shares has been halted since news of Shkreli's arrest emerged.

Article by
Phil Taylor

24th December 2015

From: Regulatory

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