Turing Pharmaceuticals Starts Hunt for Ex-CEO Martin Shkreli Replacement
Turing Pharmaceuticals announced that the company is looking for new CEO after Martin Shkreli vacated his post on Friday, a day following his arrest for fraud. The drug manufacturer also divulged its plans to cut jobs as part of its restructuring scheme.
The 32-year-old executive was released on $5 million bail and pleaded not guilty for his involvement in the over-priced drug and alleged cheating of investors. He was also fired as CEO of California-based KaloBios Pharmaceuticals on Monday.
The charges hurled against him are related to his questionable actions before he started Turing in February. It was alleged that Shkreli kept losing money of investors and deliberately lied to them about it. FBI prosecutors said that the former executive swindled the company's investors by as much as $11 million. He was also accused of illegally drawing out assets from Retrophin Inc., his previous company, in order to settle debts with other businesses.
At a press conference, Brooklyn U.S. lawyer Robert Capers said, "Shkreli essentially ran his company like a Ponzi scheme where he used each subsequent company to pay off defrauded investors from the prior company."
Shkreli was first put on spotlight after he hiked up price of a drug called Daraprim in September. The life-saving medicine is the only approved prescription for parasitic infection which mostly affects pregnant women, toxoplasmosis, AIDS and cancer patients. He suddenly raised the price of this particular drug by 5,000 percent - from $13.50 to $750, Bloomberg reported.
The aftermath of Shkreli's arrest also negatively affected KaloBios shares. Additionally, it was said that University of California at Davis and Moffit Cancer Center halted its plans to test KaloBios' leukaemia drug KB003, "pending the outcome of the investigation of KaloBios' CEO."
The ex-CEO would be temporarily replaced by Turing Pharma's chairman Ron Tilles. The Swiss-based firm also disclosed its plans to reorganized its board by adding independent members.
In a statement, Tilles said, "We wish to thank Martin for helping us build Turing Pharmaceuticals into the dynamic research focused company it is today, and wish him the best in his future endeavors."
He added, "These staff changes put us in the best position to continue executing on our long-term plan. I am very excited about the opportunity to guide Turing Pharmaceuticals forward."
Meanwhile, after posting bail and being freed, Shkreli took to Twitter to deny the charges and air his side by stating that the accusations are "baseless and without merit."