|Turing Pharmaceuticals CEO Martin Shkreli|
Controversial biotech entrepreneur Martin Shkreli is hoping to resurrect the nearly-out-of-business biotech KaloBios ($KBIO), taking over as CEO after leading a group of investors to acquire a controlling stake.
Last week KaloBios, dragged down by years of clinical failure, disclosed its plans to close shop and liquidate its assets. But Shkreli, touting the promise of KaloBios' once-failed lead drug, intervened on Wednesday and rounded up some unnamed investors to buy a majority stake in the company. Now that group has upped its ownership to 70%, KaloBios said, and Shkreli, who remains CEO of Turing Pharmaceuticals, is taking the top job.
KaloBios' top prospect is lenzilumab, an antibody that failed a Phase II trial in severe asthma last year. Before resorting to liquidation, KaloBios shifted its focus to the rare chronic myelomonocytic leukemia, or CMML, convinced lenzilumab might make a difference in the deadly disease. Shkreli believes that idea has merit, and his KaloBios is now planning to enroll a 31-patient Phase I/II trial in CMML by the end of the year, the company said.
Shkreli's escalating interest in KaloBios has sent its share price soaring nearly 10-fold since he first disclosed his investment. His history as a hedge fund manager and present penchant for shorting biotech stocks spurred some initial skepticism among investors, worried that his bet on KaloBios had more to do with temporarily inflating its share value than pressing forward with lenzilumab. But the news of Shkreli's appointment as CEO, released late Thursday night, seemed to allay those concerns on Wall Street, sending KaloBios' share value up another 85%.
Shkreli said his new role won't affect operations at Turing, the privately held drug company that sparked international controversy earlier this year when it acquired an old, little-used drug and raised its price by about 5,000%. Shkreli has said that he has no intention of taking Turing public and dismissed the idea of merging the company with KaloBios.
KaloBios reported $5 million in cash on hand, and Shkreli and company have committed to investing about $13 million to support the company's clinical endeavor.
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