Less than two weeks after Martin Shkreli‘s arrest for securities fraud, KaloBios Pharmaceuticals (formerly led by Shkreli) seeks bankruptcy protection.
KaloBios is the second pharmaceutical company—Turing Pharmaceuticals Inc. being the first—with ties to Shkreli that is in financial turmoil following his indictment.
Under Shkreli’s guidance, Turing acquired the rights to a treatment for a rare parasitic infection. After which time, the company raised the price from $13.50 to $750 per pill—resulting in an uproar from both lawmakers and the public about soaring drug prices.
At KaloBios, there had been similar discussions of raising the prices of the parasitic infection drug, benznidazole, as well. The company said it intended to charge around $1,000 per pill (more than $80,000 for a course of treatment)—akin to the pricing of some HCV treatments. At present, benznidazole has not been approved in the U.S. for the treatment of Chagas disease, as the disease is not common in the U.S.
Then, on December 29, KaloBios filed a voluntary petition for bankruptcy protection under Chapter 11 of Title 11 of the United States Bankruptcy Code reorganization. The filing was made in the United States Bankruptcy Court for the District of Delaware.
On December 30, KaloBios received a letter from the NASDAQ Stock Market LLC regarding the delisting proceedings previously disclosed by the company in a filing with the Securities and Exchange Commission on December 23, 2015.
According to a press release on the matter:
The letter notified the company that the NASDAQ Listing Qualification Staff has determined that the company’s filing for protection under Chapter 11 of Title 11 of the U.S. Bankruptcy Code on December 29, 2015 constitutes a separate and additional basis for delisting the company’s securities under Listing Rules 5101, 5110(b), and IM-5101-1. Additionally, the letter stated that the resignations of Tom Fernandez and Marek Biestek as members of the Company’s board of directors on December 27, 2015 resulted in the Company having only one remaining member on its audit committee, which also serves as a separate and additional basis for delisting the Company’s securities under Listing Rule 5605(c)(2)(A). The company previously disclosed that it has filed an appeal of the Nasdaq Staff’s decision to delist the Company’s securities. A Nasdaq appeal panel will consider these additional bases for delisting at the previously scheduled hearing on February 25, 2016.
And on January 1, a class action lawsuit was filed against KaloBios, according to an announcement by Goldberg Law PC.
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