KaloBios in Agreement to Buy Former CEO Shkreli’s Shares
(Bloomberg) -- KaloBios Pharmaceuticals Inc. said it has an agreement with Martin Shkreli, the company's former chief executive officer who came under fire for raising drug prices, to buy back his shares and restrict his shareholder actions, in a move to cut ties with the controversial investor.
The agreement applies to all common stock Shkreli holds or controls in the company, and bars him from nominating board members, Brisbane, California-based KaloBios said Thursday in a statement.
Martin Shkreli
KaloBios filed for bankruptcy in December, after Shkreli was arrested on fraud charges related to other businesses he was involved in. He has denied the allegations. Under the bankruptcy plan that won U.S. approval last month, Shkreli's holdings in the company were to shrink to about 14 percent from 47 percent.
“This agreement is another step in the company's pursuit of revitalizing its reputation,” said CEO Cameron Durrant, in the statement. “KaloBios is building a company committed to transformational ideas, like transparent and responsible pricing.”
The company has the right to purchase any or all of Shkreli's shares for six months beginning 61 days after June 30, when it effectively emerged from bankruptcy proceedings, according to the statement. KaloBios is currently valued at $17.8 million, according to data compiled by Bloomberg.
Shkreli didn't respond to a Twitter message seeking comment.
KaloBios bought the rights to develop a drug for Chagas disease, an insect-borne parasitic infection common in Central and South America. In December, the humanitarian relief group Doctors Without Borders criticized KaloBios, saying that the company planned to get expedited U.S. regulatory approval through a program for neglected diseases and then charge “a high price" for its product.
Shkreli was called to testify in front of Congress after the company he started, Turing Pharmaceuticals AG, bought the rights to a treatment for a potentially deadly parasitic infection and raised the price to $750 per pill from $13.50.
To contact the reporter on this story: Doni Bloomfield in Boston at mbloomfiel12@bloomberg.net. To contact the editors responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net, John Lauerman, Lisa Wolfson
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