Being the most hated man in biotech might have stopped Martin Shkreli floating Turing Pharmaceuticals – but it has not stopped him buying a majority stake in a publicly traded shell company, possibly to reverse into.
KaloBios, which on Friday said it was winding down operations, saw its stock jump more than 400% in early trading after news that Mr Shkreli and his associates had bought over 50% of its shares. Although the market is obviously expecting a reverse takeover, there is also the chance that he could simply sell up and pocket a tidy profit. An initial outlay of around $4m has brought Mr Shkreli's consortium theoretical net proceeds of around $20m – for not much effort.
But this move would unleash another torrent of abuse, not long after he was roundly criticised for hiking the price of toxoplasmosis drug Daraprim (After Turing, the industry’s biggest price gougers, September 23, 2015).
Mr Shkreli, however, seems unconcerned about his pariah status – his latest stunt, live streaming his working day, comes after protests that he was only doing what everyone else in pharma was also doing, albeit more audaciously.
But unexpectedly, he hinted during the live stream that he might actually be interested in KaloBios's pipeline, potentially KB003, an anti-GM-CSF MAb that previously failed to show a benefit in severe asthma. KaloBios had been planning to start a phase I trial in chronic myelomonocytic leukaemia this year, before it announced that it was winding up.
KaloBios has had a torrid couple of years – after pulling the plug on KB003 in asthma its partner Sanofi walked away from KB001-A, an antibody against Pseudomonas aeruginosa (KaloBios's stumbles provide a lesson to enthusiastic IPO investors, July 29, 2014).
In January it confirmed the worst when KB001-A did not meet its primary endpoint in a phase II study in lung infections in cystic fibrosis; not long after this, the group's chief executive, David Pritchard, retired. The company's other main existing asset is KB004, a MAb targeting EphA3 in phase II for haematologic malignancies.
It should soon become apparent whether Mr Shkreli intends to develop these assets, if he just needs a shell for Turing, or whether he is playing stock market games. If it is the last, we can expect the online onslaught to begin again.