NEW YORK » Former hedge fund manager Martin Shkreli was named CEO and chairman of KaloBios Pharmaceuticals after he led a group of investors to take a majority stake in the cancer drug developer.
The company had been winding down operations when Shkreli and the group swooped in to take control. Shkreli is a former hedge fund manager and the head of privately-held Turing Pharmaceuticals, which was criticized in September for buying the rights to a parasitic infection treatment called Daraprim, then raising its price to $750 per pill from $13.50 a pill.
Daraprim has been on the market for more than 60 years and it did not have any competition when Turing bought it. Turing has said it will lower the price, although that hasn’t happened yet. The company said it capped copayments for patients at $10. In October a San Diego company later said it would make a version of Daraprim available for about $1 a pill.
KaloBios’ potential treatment for lung infections in cystic fibrosis patients failed in clinical testing. Its shares plunged 70 percent after that announcement in January and continued to decline after that. This month it said it would eliminate most of its jobs, leaving it with just 11 employees as it looked for strategic options.
The South San Francisco, California company still owns several drug candidates, including potential treatments for leukemia and blood cancers. Shkreli plans to work with the company to ensure continued operations and the investor group will commit an equity investment of at least $3 million. In addition, Mr. Shkreli and the group of investors have committed to a $10 million equity financing facility.