KaloBios beats bankruptcy, bets future on Chagas treatment
- KaloBios Pharmaceuticals announced it had emerged from chapter 11 bankruptcy after receiving $14 million in equity financing from Black Horse Capital.
- The company, formerly run by now ex-CEO Martin Shkreli, also acquired the rights to benznidazole, an unapproved medication for the rare Chagas disease, which was previously owned by Savant Neglected Diseases.
- KaloBios hopes to submit benznidazole for Food and Drug Administration approval in order to acquire a coveted priority review voucher. Vouchers expedite FDA review of new drugs by four months, and have been resold for over $200 million.
It has been a tumultuous year for KaloBios; but after a year of near-bankruptcy and Shrkeli-laden press coverage, the company has re-emerged with fresh backing and a newly minted plan – somewhat.
The makings of the bankruptcy deal have been in the works since the company's former CEO and financial rescuer Martin Shrkeli was infamously arrested in December 2015, leaving KaloBios' financial future uncertain.
Since then, the company has fought hard to distance itself from the biopharma executive and forge a promising future.
In March, the company agreed to receive funding from Black Horse Capital under the condition that Shkreli's voting stake be reduced below 20% of common stock. After the bankruptcy judge OK'ed the deal earlier this month, Shkreli's stock was reduced from 47% to 14% with plans of reducing it further.
KaloBios plans to stick with Shkreli's original plan to purchase benznidazole, submit it to the FDA, and then sell the voucher if the drug wins approval.
But in a further repudiation of Shkreli, the company in April pledged to provide affordable drugs and not engage in "price gouging." Shkreli's original plan had reportedly included raising the list price of benznidazole from $100 to $60,000 for a two-month treatment.
Now, with a press release rife with hope and optimism, KaloBios promises to be a "different kind of biopharmaceutical company," according to Cameron Durrant, KaloBios chairman and CEO.
"The company has risen from the ashes with a great deal of hard work and new thinking on how a biopharmaceutical company can operate and a clear vision to move forward as a successful, positive leader in our industry," he added.
Follow Edwin Lopez on Twitter