SOUTH SAN FRANCISCO – A day after acquiring 70 percent of KaloBios (KBIO), Martin Shkreli, the embattled founder and chief executive officer of Turing Pharmaceuticals, has been named to the top spot of a company that was on the verge of shuttering.
Company stock has soared since Shkreli and his investors snapped up shares of the company that only a week ago said it intended to shut down operations and liquidate its assets. This morning KaloBios stock is trading at $19.43 per share, a massive jump from the $2.01 per share price on Wednesday.
On Twitter, Shkreli said he was happy to rescue KaloBios from having to discontinue the blood cancer drug lenzilumab. He also said he wanted to see about hiring back some of the employees who had been terminated since KaloBios announced its plans to shutter.
In addition to the acquisition of shares, Shkreli and his partners have committed to a $3 million equity investment, as well as a $10 million equity financing facility, subject to applicable shareholder approval. KaloBios currently has $5 million in cash and said it plans to file a quarterly report as soon as possible.
In a statement Shkreli said he believes lenzilumab “is a very promising candidate for the treatment of various rare and orphan diseases.”
Lenzilumab is a monoclonal antibody that neutralizes soluble granulocyte-macrophage colony stimulating factor (GM-CSF), a central actor in leukocyte differentiation, autoimmunity and inflammation. The drug has shown promise in treating chronic monomyelocytic leukemia (CMML). Company officials believe lenzilumab may also have clinical utility in other rare autoimmune and inflammatory disorders. KaloBios said it plans to enroll a 31-patient Phase I/II clinical trial of lenzilumab by the end of 2015 and expect interim results in the first half of 2016.
On Nov. 16, KaloBios announced the company would shut down its operations and liquidate its assets. That decision came just days after the company announced it was slashing 61 percent of its workforce in order to shift resources to development of lenzilumab, or KB003, toward treatment of CMML. The compound is an anti-GM-CSF mAb originally tested for asthma, but was not effective in clinical trials. The company’s IND in CMML, an orphan oncology indication, has been cleared by the U.S. Food and Drug Administration (FDA), and had been initiating a Phase I trial and expects to start dosing patients before the end of the year.
Shkreli will continue to function as CEO of Turing. KaloBios and Turing will remain independent of each other, the company said in a statement. Following Shkreli’s appointment as CEO, the company board of directors resigned their positions. David Moradi, Tony Chase and Marek Biestek have since been elected to the board of directors, KaloBios said.
KaloBios was founded in 2000 and over the course of the first decade had several equity rounds and deals with Novartis (NVS) and Sanofi (SNY). In July 2014, Sanofi walked away from their deal. Citing low single digit royalties on net sales of KB001-A, subject to a $40 million cap on the aggregate royalties. Sanofi was also entitled up to 10 percent of certain sub-license payments or other milestone payments.
While Shkreli may be receiving praise for saving KaloBios, its employees and potential research, he is still being lambasted for Turing‘s decision to acquire the toxoplasmosis drug Daraprim for $55 million in August and promptly increase the price by 5,000 percent.