KaloBios asking bankruptcy court approval to buy rights to Chagas drug
- KaloBios has asked for court permission to buy the rights to a treatment for the tropical Chagas disease, even as the company continues through the bankruptcy process, reports the Wall Street Journal.
- KaloBios entered bankruptcy protection after the arrest of its former CEO, Martin Shkreli, for securities fraud in December. However, prior to his arrest, Shkreli and KaloBios had attempted to acquire benznidazole from Savant Neglected Diseases, LLC in hopes of using it to secure a coveted priority review voucher from the FDA.
- The deal apparently failed to close after KaloBios' declaration of Chapter 11 bankruptcy, and Nasdaq's subsequent de-listing of the firm. Now, KaloBios is offering $3 million to acquire the regulatory assets to benznidazole, plus an undisclosed amount for an exclusive license of the intellectual property, according to court papers.
Benznidazole is a decades-old drug used to treat Chagas disease, which is typically prevalent in rural Latin America and can cause fatal swelling of the heart and brain. One of two known treatments for the parasitic infection, benznidazole currently costs between $60 and $100 per treatment. It is not, however, currently licensed in the United States.
Under Martin Shkreli, KaloBios signed a nonbinding letter of intent with Savant to purchase the drug, and planned to file for both an orphan drug and fast track designation with the FDA. The key here is the FDA had recently added Chagas to its list of neglected tropical diseases. A successfully approved drug for such a disease could quality to receive a priority review voucher in return.
Those priority review vouchers can be exchanged for expedited FDA review of another drug or—as was likely in the case of KaloBios—sold to another pharmaceutical company. In the past, these vouchers have fetched substantial sums. United Therapeutics sold one to AbbVie for an impressive $350 million last year, and other vouchers have sold for hundreds of millions. Indeed, Shkreli's old company Retrophin raked in $245 million from Sanofi for a voucher it sold last year.
Shkreli wanted to raise the price of the drug to a level more typical of rare-disease treatments, somewhere in the $60,000 - $100,000 range. While that might no longer be possible given the optics, a successful acquisition could give KaloBios some leverage to climb out of bankruptcy and back onto the market, although that appears to remain a long shot.
- Wall Street Journal Bankrupt KaloBios Pursuing Deal to Buy Rights to Tropical Disease Drug
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