KaloBios has been 'rescued' by Martin Shkreli—who is now its CEO
- The controversial biopharma investor and CEO Martin Shkreli poured $1.6 million into KaloBios earlier this week, essentially staving off bankruptcy for the troubled company. Shkreli and his associates now own more than 50% of the company, which had gone so far as point as recruiting a liquidation consultant. And on Thursday evening, the company announced that Shkreli had become its CEO.
- The stock price was originally up more than 700% on the news of Shkreli's investment, nearly hitting $24. It soared further in early Friday trading.
- Market insiders speculate Shkreli made this move in order to give his company, Turing Pharmaceuticals, a presence on Wall Street without having an actual IPO. Shkreli denies this as a motive for his investment. He also said on Twitter that he will not be receiving any cash compensation for his new role as KaloBios' chief executive.
KaloBios' lead candidate medication is an antibody drug for treatment of severe asthma called lenzilumab. Although it failed in phase 2 last year, Shkreli appears to see potential. One possible direction is the use of lenzilumab for treatment of rare chronic myelomonocytic leukemia, or CMML. There are currently no treatments for the disease. KaloBios had started to explore this possibility but the money had not been there to proceed with further development.
The real star of this show is the drug's mode of action, GM-CSF antagonism. Shkreli might be attempting to exploit the therapeutic potential of this MOA. Larger companies such as GlaxoSmithKline are already looking into this.
While Shkreli has a bad reputation in the industry, he seems to understand product potential. Bringing a CMML drug to market would be a big breakthrough but there obviously would be a great deal of sensitivity around pricing given his past missteps.