Martin Shkreli-Linked KaloBios Emerges From Bankruptcy, Vows Better Drug Pricing

KaloBios Pharmaceuticals (KBIOQ) said Friday it has emerged from Chapter 11 bankruptcy and has also acquired the rights from Savant Neglected Diseases LLC to develop benznidazole for the treatment of Chagas disease. The developmental-stage biopharmaceutical company initially filed for bankruptcy in late December after ousting former CEO Martin Shkreli, perhaps best known for the alleged "price hiking" of Turing Pharmaceuticals' Daraprim.

Under its new agreement with Savant, KaloBios has made an upfront payment of $3M and issued warrants for 200,000 shares of its common stock. The deal includes milestones and royalties in connection with the development of benznidazole, which could receive an FDA priority review voucher. Separately, KaloBios said its reorganization plan was "overwhelmingly accepted" by creditors and other stakeholders, and was confirmed by the courts on June 16. The company secured exit equity financing of $11M alongside a $3M debtor-in-possession loan funded in May, both provided by investors Black Horse Capital, Cheval Holdings, and Nomis Bay.

Black Horse managing member Dale Chappell will also join the KaloBios board, effective immediately. "KaloBios will continue to move swiftly and apply itself to the real task of bringing patients crucial treatments they need, but to which they may not have access. We also see a unique opportunity to bring new ideas to address concerns, such as drug pricing, for all stakeholders in healthcare -- with our Responsible Pricing Model as just the beginning," commented chairman and CEO Cameron Durrant. In an interview with Fortune on Friday, Durrant added that "we are looking to price based on the principles of access, affordability, and a reasonable return on our investment." 

Disclosure: None.

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