A bankrupt KaloBios may still buy Chagas drug that Shkreli wanted to acquire-and-hike
- Even as KaloBios Pharmaceuticals proceeds with its bankruptcy filings, a deal with Savant Neglected Diseases LLC to acquire rights to a treatment for Chagas disease may still be in play.
- Under now-former CEO Martin Shkreli, KaloBios had begun negotiations last year to acquire benznidazole from Savant. But, Shkreli's arrest and subsequent termination as CEO caused KaloBios stock to plummet, precipitating the bankruptcy filing.
- Discussions may still collapse, as Savant would need assurances KaloBios is solvent enough to exit bankruptcy and complete any transaction.
The Justice Department has pushed for a trustee to take over KaloBios in order to better investigate whether Shkreli used funds associated with his alleged securities fraud to fund his purchase of KaloBios. This may further complicate the negotiations for the treatment.
KaloBios currently has $8 million in assets from a private placement deal that closed the day before Shkreli was arrested on December 17, 2015. Investors, however, are trying to sue KaloBios to get the money back.
Even if the deal goes through, the pricing strategy Shkreli had in mind for benznidazole no longer seems practicable. Although benznidazole currently costs $60 to $100 per treatment, Shkreli was planning on raising the price to $60,000 to $100,000 per treatment. Benznidazole has been available since the 1970s.
Chagas is a rare disease caused by a bug bite, and can lead to deadly swelling of the heart and brain in worst case scenarios, according to the CDC. Approximately 300,000 people in the U.S. are affected by Chagas, though most cases are found in Latin America.
- Wall Street Journal KaloBios Still in Talks to Buy Chagas Disease Drug