Monday, 04 January, 2016

Turing Pharma close to replacing CEO Shkreli

Rx firm insolvent; arrest of exec cited
Dillon Hess | 01 January, 2016, 18:27

Martin Shkreli, Turing Pharma's CEO who bought Wu Tang's one-of-a-kind album for a reported $2 million earlier this month, was taken into FBI custody early Thursday amid a federal investigation related to his former companies.

Drug prices rose about 13 percent a year ago, driven in part by large increases in the price tags of older generic drugs such as Daraprim.

Earlier this year after buying a 60-year-old drug called Daraprim, Turing raised the price overnight to $750 a tablet from $13.50.

Shkreli has now resigned as CEO of Turing Pharmaceuticals, the company where he gained notoriety by jacking up the price of HIV medication. Drug makers that have been criticized, such as Valeant Pharmaceuticals Inc, have begun to roll back prices.

Alleging that the Pharma-douche had misappropriated up to $US11 million ($15.5 million) in a twisted web of various schemes and plots both at Retrophin and during his time as a hedge fund manager, Robert Capers - US Attorney for the Eastern District of NY - commented that: "his plots were matched only by efforts to hide the fraud".

The company said in a statement that these compounds, which combine the active ingredient of Daraprim, pyrimethamine, with a vitamin leucovorin, has not undergone the same FDA review process as Daraprim.

The charges against Shkreli, 32, center on his behavior at several ventures he founded before he founded Turing: two hedge funds, and a biopharmaceutical company that filed a lawsuit against him this summer.

He was charged with securities fraud, securities fraud conspiracy and wire fraud conspiracy, with a maximum sentence for the top count of 20 years in prison. He has denied those charges.

He said prosecutors and the Securities and Exchange Commission failed to understand the accounting. The company named Mr. Shkreli CEO in late November.

The third was Walter Blum, who is based in Switzerland where the company also has offices, according to the website. Following his arrest, the company's stock price has plummeted 53.24 per cent to $US11.03 before trading was suspended.

Mind you, authorities would want to keep an eye on him - and his finances - because with his history of high finance fraud and deceit, a bond for $5 million may not not be a huge deterrent to him making a run for the border.