Just days after kicking Martin Shkreli out as CEO, KaloBios ($KBIO) says that Nasdaq plans to delist the company, citing the exec's arrest on fraud and looting charges as one of several reasons for the move.
KaloBios says it received a letter from Nasdaq on Friday, the day after Shkreli's arrest, stating that the biotech has until December 28th to appeal the decision and faces a suspension on the 30th if the company doesn't act. Nasdaq also cited the arrest of outside counsel Evan Greebel.
KaloBios had announced in mid-November that it was dissolving the company after a string of clinical failures. Then Shkreli appeared suddenly, scooping up a majority of the cheap shares and running a squeeze play on company shorts that drove the stock north of $27 a share.
Trading in the company stock was halted by Nasdaq soon after the exec's arrest.
On top of the delisting notice, KaloBios also said in its filing with the SEC that its accountants, Marcum LLP, had resigned on December 21, 13 days after they had been engaged.
The 32-year-old Shkreli was booted as CEO of Turing at the same time he was ousted at KaloBios. Earlier today Turing interim CEO Ron Tilles announced plans to cut staff and start a search for a permanent replacement to Shkreli.
The FBI arrested the biotech exec on allegations that he had used a former company--Retrophin ($RTRX)--as a kind of personal piggy bank to pay personal expenses and claims against his defunct hedge fund. Shkreli has denied the charges, taking to Twitter to proclaim that he will prevail over federal prosecutors.
The charges, though, couldn't have come as a complete surprise to Shkreli. He met with members of the U.S. attorney's office in January, according to a report from USA Today, well before his big price hike for Daraprim that triggered a firestorm of controversy. And he gave testimony to the SEC, which filed suit against him, in 2013 and 2014.
The exchanges beg some big questions for Shkreli, including his reasons for provoking a furious reaction to his pricing strategy while he was under criminal investigation.