Shkreli's Turing Pharma banks $90M in a murky funding round

Martin Shkreli

Turing Pharmaceuticals, led by an outspoken former hedge fund manager, raised $90 million from its own CEO and some unnamed benefactors, at the same time buying a treatment for infectious disease to flesh out its pipeline.

The company, headquartered in New York and Switzerland, is the latest biotech play from Martin Shkreli, a stock picker turned biotech CEO whose first startup, Retrophin ($RTRX), forced him out last year. His latest venture, Turing, is similarly focused on buying up treatments for serious and underserved diseases, and the company says its $90 million raise will pave the way to executing its plan.

In an uncommon move, Shkreli himself led the Series A financing, and Turing isn't naming any of its other backers, calling them "preeminent institutional equity investors" and leaving it at that. In a filing with the SEC last week, Turing counted 34 individual participants in its funding round but reported raising just $62.7 million. A spokesman for the company declined to explain the $27.3 million difference, and further questions about the company's financials were met with a terse email from Shkreli asking FierceBiotech not to contact Turing again.

Meanwhile, Turing has already committed some of its new cash, this week paying Impax Laboratories ($IPXL) $55 million for the U.S. rights to Daraprim, an FDA-approved treatment for the parasitic disease toxoplasmosis. Turing says it plans to build out a pipeline of therapies for the infection, which the CDC sites as the second leading cause of death by foodborne illness.

Since founding Turing last year, Shkreli has taken a page from what made Retrophin a high-profile--and controversial--player among small biotech companies. Retrophin's stated goal was ferreting out value in biopharma by acquiring assets with potential in rare and neglected diseases, a process that can mean acquiring an underused drug and jacking up its cost to take advantage of rare disease pricing.

Shkreli's tenure at Retrophin came to an end in October when his board ousted him amid accusations of stock impropriety and concerns about his occasionally brash Twitter persona. But he managed to take three Retrophin assets with him on the way to founding Turing, picking up a hypertension drug his new company believes could treat autism, an intranasal formulation of oxytocin and a ketamine spray in development for depression. Moving forward, Turing will operate much like Retrophin, looking "to buy dollar bills for 50 cents," as Shkreli told Forbes in February.

And Turing's latest fundraise is "a great reflection on our business model," the CEO said in a statement Monday.

"We plan to accelerate clinical trials for several treatments and are pleased to announce an immediate addition to our portfolio," he said. "We look forward to the continued execution of our plan to bring new treatments for serious diseases to patients, helping us maximize shareholder value."

- read the statement
- here's Turing's filing