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Update: Shkreli resigns as Turing CEO, ousted from KaloBios

Shares in KaloBios had been hit hard when news of his arrest broke

Martin Shkreli Turing PharmaceuticalsMartin Shkreli has resigned as chief executive of Turing Pharmaceuticals, and has been ousted from KaloBios in the wake of his arrest.

Shkreli will be replaced on an interim basis by Ron Tilles, Turing Pharma's chairman, at the privately held company, which has offices in New York and Zug in Switzerland.

 It has also emerged that Shkreli has been fired from his role as CEO of KaloBios, a company which he joined as CEO last month, and he has also resigned from the board of directors. Shares in KaloBios were hit hard as news of the arrest broke last week.

Meanwhile, it emerged that a planned trial of KaloBios' leukaemia drug KB003 has been suspended by the University of California at Davis and Moffitt Cancer Center in Florida "pending the outcome of the investigation of KaloBios' CEO", according to a Bloomberg report.

Shkreli and Turing came under scrutiny this year when the biopharma firm bought the rights to a 50-year-old drug used by AIDS patients and hiked its price from $13.50 per pill to $750 per pill, sparking accusations of applying 'hedge fund mentality' to the pharma industry.

The US Attorney's Office for the Eastern District of New York (EDNY) and FBI investigation is not related to that action, but stems from allegations that Shkreli committed fraud by illegally taking stock from Retrophin - a biopharma company he started in 2011 - and using it to pay off debts incurred in his other business dealings, including hedge fund MSMB.

The Securities and Exchange Commission has also charged Shkreli with defrauding investors in MSMB to hide poor investment choices, and of siphoning money from the fund for his own purposes.

Shkreli tweeted after being released on a $5m bail bond last week that the allegations are "baseless and without merit", adding that the charges relating to MSMB "involve complex accounting matters that the EDNY and SEC fail to understand".

In a statement, Tilles thanked Shkreli for his time at Turing and wished him "the best in his future endeavours".

"At the same time, I am very excited about the opportunity to guide Turing Pharmaceuticals forward," he added.

Article by
Phil Taylor

23rd December 2015

From: Regulatory

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