Martin Shkreli was arrested for securities fraud yesterday, and today he has one fewer business to run. Turing Pharmaceuticals announced this morning Shkreli has resigned his post as CEO.
His departure from Turing marks the second time he has built a company, only to leave under no small amount of controversy. The federal government is accusing Shkreli and his lawyer Evan Greebel of defrauding investors and others tied to Shkreli’s hedge funds, then stealing money from Retrophin, the biotech Shkreli founded before Turing, to pay off the people he allegedly defrauded.
Shkreli left Retrophin in September 2014, and the company filed a lawsuit against him this year. Many of the allegations in Retrophin’s lawsuit line up with the criminal charges brought against Shkreli yesterday after law enforcement officials arrested Shkreli at his New York City apartment.
He remains CEO of KaloBios Pharmaceuticals (NASDAQ: KBIO), a San Francisco Bay Area biotech that was ready to close up shop after a string of failures when Shkreli led a takeover last month. Trading of KaloBios shares were halted yesterday and remain suspended today.
Shkreli has signaled that KaloBios would pursue a similar strategy to the one he devised for Turing: Find a low profile drug that is critical in saving lives but has little to no competition, and jack up its price.
At Turing, it was Daraprim, used to treat parasitic infections that often afflict people with HIV. Shkreli’s price hike on Daraprim, from $13.50 to $750 a pill, turned him into an international poster boy for pharma-industry greed this year.
KaloBios said earlier this month it would buy the rights to benznidazole, a treatment for Chagas disease, a potentially deadly parasitic infection spread by the triatomine beetle, or kissing bug. Filings revealed in recent weeks that KaloBios might price benznidazole “similar to hepatitis C antivirals”—a class of drug that can cost upwards of $90,000 per course before discounts.
Chagas disease is endemic to the Americas. It causes roughly 12,000 deaths a year but can also result in permanent damage to the heart, digestive and nervous systems.
In 2003, Roche donated rights to benznidazole to the Brazil government, which has come under fire in recent years for its stewardship of what the World Health Organization calls one of the world’s essential medicines.
Benznidazole isn’t approved in the U.S. Doctors treating Chagas patients in the U.S. can only obtain it from the Centers for Disease Control, at no cost. Shkreli said he would aim for FDA approval in 2016 without conducting any clinical trials.
In the statement announcing Shkreli’s resignation, interim CEO Ron Tilles said, “We wish to thank Martin for helping us build Turing Pharmaceuticals into the dynamic research focused company it is today, and wish him the best in his future endeavors.”
When Shkreli left Retrophin last year, the company’s press release was even more gracious. Retrophin’s chairman was quoted as saying, “The Retrophin Board is grateful to Martin for his creativity, energy, and vision over the past three years. In a remarkably short time, he built a world-class management team and created a thriving biopharmaceutical company that has improved the lives of patients with rare diseases.”
The company soon initiated an investigation into his activities that led to the lawsuit and helped fuel the criminal case, as well. Retrophin issued a statement yesterday that read, in part: “A new chapter for Retrophin began the day the company replaced Martin Shkreli more than a year ago—and that decision has been vindicated by today’s indictment.”