KaloBios sets up funding to clear bankruptcy, acquire Chagas drug
- The troubled KaloBios Pharmaceuticals has reportedly received a funding offer to help it climb out of bankruptcy and acquire the rights to a tropical disease drug. Black Horse Capital would provide the funding, but only if former CEO Martin Shrekli’s voting stake is reduced below 20% of common stock, according to the Wall Street Journal.
- Shkreli bought control of KaloBios back in November 2015, but his subsequent arrest and ouster as CEO has made it difficult for the company to move forward.
- KaloBios still hopes to complete a deal for the rights to a Chagas disease medicine which is common elsewhere but unapproved in the U.S. Moving the drug through regulatory approval would qualify KaloBios for a coveted and valuable priority review voucher from the FDA
Savant Neglected Diseases LLC currently owns the rights to the Chagas treatment, known as benznidazole. It has been available for four decades and is currently priced between $60 and $100 per treatment course. Under Shkreli, KaloBios had reportedly been considering a price on par with other rare disease medications, somewhere north of $60,000 (pending its successful approval).
The FDA’s tropical disease priority review program has come under fire recently, as it rewards companies even if they didn’t develop the drug themselves.
Doctors Without Borders has advocated for the addition of a novelty requirement to the program as Congress considers major biomedical legislation.
“As Congress considers adding Zika to the list of diseases eligible for this lucrative reward, they must also immediately fix the critical flaws with the program and make sure companies that are rewarded with a voucher are actually creating new products that are available and affordable to patients and treatment providers,” said Judit Rius Sanjuan, MSF Access campaign manager.
The bankruptcy court judge for KaloBios has cleared the company to pursue a deal with Savant, according to the Journal. Black Horse’s offer would still be subject to court approval.