The downfall of the “pharma bro” continues with Shkreli removed as CEO of KaloBios Pharmaceuticals.
Martin Shkreli, the boastful pharmaceutical executive who came under fire for sharply increasing a drug price, is no longer a CEO.
Shkreli was terminated from KaloBios Pharmaceuticals, a struggling, publicly traded California biotechnology company, following his arrest on security fraud charges. His ouster came days after he resigned as chief executive of Turing Pharmaceuticals, a privately held company in New York that he co-founded.
The 32-year-old became a symbol of pharmaceutical greed in September after Turing bought a 62-year-old drug called Daraprim and raised the price more than 50-fold from $13.50 a pill to $750. The drug is considered the preferred treatment for a parasitic condition called toxoplasmosis, which can be deadly for babies and patients with weakened immune systems, such as those with cancer or HIV.
The move drew widespread outcry from the public and medical community as well as from Congress and presidential candidates. Donald Trump called him a “spoiled brat,’’ and the BBC named him the “most hated man in America.’’ Despite the rebuke, Shkreli refused to budge, saying his only mistake was not raising the price more.
Three months later, on Dec. 17, Shkreli was arrested on charges unrelated to the price gouging. They stemmed from his time running his first biopharmaceutical company, Retrophin.
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Federal officials have accused Shkreli of using money from his company to pay off investors who were suffering losses in his hedge funds. His crimes have been described as a “securities fraud trifecta of lies, deceit and greed,’’ according to an unnamed FBI official quoted by the New York Times.
Shkreli, who was arraigned in Federal District Court in Brooklyn, pleaded not guilty to the charges and is free on $3 million bail.
Shkreli gained control of KaloBios in November, after the company announced it was planning to go out of business because some of its experimental drugs hadn’t worked in clinical trials and it was running out of money. Shkreli led an investor group that obtained 70% of KaloBios’ shares, which skyrocketed in price once his involvement became known. Shkreli was drawn to KaloBios because he saw promise in one of its drugs as a possible treatment for a rare form of leukemia.
After the company’s ouster of Shkreli, no replacement was named, and KaloBios is now filing for bankruptcy. The other company, Turing, is being run by an interim chief executive, Ron Tilles, and staff cuts are expected.
Shkreli started Retrophin in 2011 and quickly adopted the controversial practice of acquiring old, neglected drugs used to treat rare diseases and boosting their prices. Three years later, he was booted as CEO for reasons similar to those that led to his arrest and prompted his removal from his most recent jobs.
